Conduct of Business Prior to the Closing. (a) Parent covenants and agrees that, except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to the Reorganization, between the date of this Agreement and the Closing, Parent shall cause each Company (x) to conduct its business in the ordinary course in all material respects, (y) to use commercially reasonable efforts to preserve intact in all material respects the business organization of the Companies and (z) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, without the prior written consent of the Purchaser (which consent will not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will not: (i) (A) issue, sell or redeem any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company; (ii) amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be; (iii) grant or announce any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, in the ordinary course of business consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may be; (iv) amend, adopt or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companies; (v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv)); (vi) except in the ordinary course of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company); (vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregate; (viii) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing; (ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company; (x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, other than such changes required by GAAP or by Law; (xi) enter into or terminate any Lease; (xii) purchase, sell or enter into any contract to purchase or sell any real property; (xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan; (xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property; (xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date; (xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement; (xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage; (xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof; (xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged; (xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies; (xxi) enter into, amend, modify, or terminate a Material Contract, other than in the ordinary course of business, or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of the date hereof; (xxii) settle any Action, other than any settlement providing for the payment of monetary damages in an amount not to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following the Closing; or (xxiii) agree to take any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operations. (b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Emdeon Corp), Agreement and Plan of Merger (Emdeon Inc.)
Conduct of Business Prior to the Closing. (a) Parent covenants and agrees that, except as described in Exhibit 5.01 or Except as otherwise expressly contemplated by this AgreementAgreement and the Ancillary Agreements and except for matters identified in Section 5.01 of the Disclosure Schedule, including pursuant to the Reorganization, between from the date of this Agreement and through the Closing, Parent unless the Buyer otherwise consents in advance in writing (which consent shall not be unreasonably withheld, delayed or conditioned), the Sellers will, and will cause each Company the other GE Entities and their respective Affiliates to, (xa) to conduct its business the Business in the ordinary course in all material respectsconsistent with past practice, (yb) to use commercially reasonable efforts to preserve intact in all material respects their business organizations, keep available the business organization services of managers and other key employees of the Companies Business and preserve the relationships with the customers, distributors, resellers, independent sales agents and others having significant business relationships with the Business and (zc) to comply in all material respects with all Laws applicable not do any of the following (except to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant extent not Related to the Reorganization, Parent covenants Business for all GE Entities and agrees that, between the date of this Agreement and the Closing, without the prior written consent of the Purchaser (which consent will not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will not:their Affiliates other than Altair U.S.):
(i) (A) issue, sell or redeem permit any capital stock or other ownership interests Lien (other than as contemplated in connection with consummation of the ViPS Distributiona Permitted Lien) on any Altair U.S. Asset or Transferred Asset (whether tangible or intangible), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company;
(ii) amend or restate the certificate acquire assets outside of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be;
(iii) grant or announce any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, in the ordinary course of business consistent with past practice, including the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may be;
(iv) amend, adopt or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv));
(vi) except in the ordinary course of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition (whether by merger, consolidation, or acquisition of stock equity interests or assetsassets or otherwise) of any business or any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregatedivision;
(viiiiii) except incur, assume or guarantee any Debt, or make any loans, advances or capital contributions to, or investments in, any other Person, in each case, other than pursuant to (A) intercompany borrowing arrangements that will be repaid in full and terminated at Closing in accordance with the terms of this Agreement, or (B) currency hedging transactions entered into in the ordinary course of business consistent with past practice;
(iv) (A) amend the organizational documents of Altair U.S. or (B) issue or sell any additional shares of, or other equity or ownership interests in, Altair U.S., or securities convertible into or exchangeable for such shares or equity interests, or issue or grant any options, warrants, calls, subscription rights or other rights of any kind to acquire shares of, or other equity or ownership interests or securities in Altair U.S.;
(v) sell, transfer, lease, sublease or otherwise dispose of any Altair U.S. Assets or Transferred Assets other than in the ordinary course of business consistent with past practice; provided, however, that in no event will Seller and its Affiliates be permitted to dispose of (whether or not in the ordinary course of business, create any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing;
(ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such non-current assets having an aggregate value of less than at least $2,000,000 and except for transfers to another Company250,000 (excluding dispositions of obsolete equipment consistent with past practice);
(xvi) in any material respect, (A) grant any increase, or announce any increase, in the wages, salaries, compensation, bonuses, incentives, pension, severance pay or other benefits payable to any employee of Altair U.S. or the Business, including any increase or change pursuant to any Employee Plan or (B) establish, accelerate, or increase or promise to accelerate or increase any benefits under any Employee Plan or employment agreement, in either case except as required by Law or any contract or involving ordinary course increases, including any changes to pension or other benefits that are applicable to the other covered employees of the Business and GE generally;
(vii) make any material change in any method of accounting or accounting practice practice, policy or policy procedure used by such Company, the Business except as the case may be, other than such changes required by GAAP applicable Law or by LawGAAP;
(viii) cancel, compromise, waive or release any right or claim (or series of related rights and claims) either involving more than $250,000 or outside of the ordinary course of business consistent with past practice;
(ix) commence, compromise or settle any Action, except for any compromise or settlement of any such Action that constitutes Excluded Litigation;
(x) make any change in any material respect with respect to the accounts payable or accounts receivable terms, systems or policies in connection with the Business; or
(xi) enter into any legally binding commitment, whether oral or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, exceptwritten, to the extent that do any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract, other than in the ordinary course of business, or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of the date hereof;
(xxii) settle any Action, other than any settlement providing for the payment of monetary damages in an amount not to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following the Closing; or
(xxiii) agree to take any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operationsforegoing.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Clarcor Inc.)
Conduct of Business Prior to the Closing. (a) Parent The Company covenants and agrees that, except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to Section 6.01 of the ReorganizationCompany Disclosure Schedule, between the date of this Agreement hereof and the Closing, Parent (i) the Company shall, and shall cause each Company (x) to Subsidiary to, conduct its business in the ordinary course in all material respects, (y) to respects and use commercially its reasonable efforts to preserve intact in all material respects the its business organization of the Companies organization, including without limitation its relationships with customers, suppliers and employees, and (zii) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, without the prior written consent of the Purchaser (which consent will Purchaser, the Company shall not, and shall not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for permit any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will notSubsidiary to:
(ia) (A) issue, issue or sell or redeem any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution)stock, notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) or effect any recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;
(Bb) redeem any of the capital stock or declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, dividends and distributions and redemptions declared, made or paid solely in cash by any Subsidiary to the Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock Subsidiary and except for the distribution of any CompanyTravel Main contemplated by Section 6.08);
(iic) incur any indebtedness for borrowed money other than borrowings under a Material Contract disclosed in Section 4.18(a) of the Company Disclosure Schedule;
(d) amend or restate the certificate of incorporation its charter or bylaws (or similar organizational documents) of such Company, as the case may be);
(iiie) grant or announce any increase in, or acceleration of payment or vesting of, in the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (Ai) modifications of the terms of, or participants in, the Participation Plan that are disclosed to the Purchaser, provided that no such modification may adversely affect the Purchaser without the Purchaser’s consent, such consent not to be unreasonably withheld, (ii) as required by Law, (B) pursuant to the terms of the Plansany plans, programs or agreements existing on the date of this Agreement hereof or (Ciii) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, in the ordinary course of business increases consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may bepractices;
(ivf) amend, adopt or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv));
(vi) except in the ordinary course of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregate;
(viii) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing;
(ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may bepolicy, other than such changes required by GAAP or by Law;GAAP; or
(xig) enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim claims or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing DateActions;
(xvih) engage in effect or become a party to any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or transaction to acquire any other applicable federal Law Person (including any Internal Revenue Service rulingby way of merger, procedureasset purchase, notice business combination or other pronouncementotherwise);
(xviii) agree pledge or hypothecate any assets or otherwise permit any assets to terminate, cancel or lapse become subject to any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract, Encumbrance other than in the ordinary course of business, or ;
(j) enter into any contract related party transactions that would be a Material Contract required to be disclosed under Section 3.17(a)(iv) had it been entered into as GAAP or increase amounts being paid pursuant to an existing agreement or make any additional payment to any Stockholder or an Affiliate of the date hereof;
(xxii) settle any Action, other than any settlement providing for the payment of monetary damages in an amount not to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following the ClosingStockholder; or
(xxiiik) agree to take any of the actions specified in Sections 5.01(a)(i)-(xxiithe foregoing clauses (a) through (j), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operations.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Reliance Steel & Aluminum Co), Stock Purchase Agreement (PNA Group, Inc.)
Conduct of Business Prior to the Closing. (a) Parent covenants and agrees thatExcept as otherwise contemplated by or necessary to effectuate the Transaction Agreements, except as described for transfers of employees from the Company, and except for matters identified in Exhibit 5.01 or as otherwise expressly contemplated by this AgreementSchedule 5.01, including pursuant to the Reorganization, between from the date of this Agreement and through the Closing, Parent unless the Acquiror otherwise consents in advance in writing (which consent shall not be unreasonably withheld, conditioned or delayed), Seller will, and will cause each the Company to, (xa) to conduct its the business and operations of the Company in the ordinary course consistent with past practice and maintain its books, accounts and records in all material respectsthe ordinary course consistent with past practice, (yb) to use commercially reasonable efforts to preserve intact in all material respects the Company's business organization and to preserve the current significant business relationships with the customers of the Companies Company and (zc) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, without the prior written consent not do any of the Purchaser (which consent will not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will notfollowing:
(i) (A) issueexcept to evidence Liens created by or under this Agreement or by or through Acquiror or any of its Affiliates, sell or redeem grant any capital stock or other ownership interests Lien (other than as contemplated in connection with consummation granting a Permitted Lien) on any Asset of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company;
(ii) amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be;
(iii) grant or announce any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, in the ordinary course of business consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may be;
(iv) amend, adopt or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv));
(vi) except in the ordinary course of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition acquire (by merger, consolidation, or acquisition of stock or assetsassets or otherwise) of any corporation, partnership or other business organization or Person division;
(iii) incur any Debt, issue any debt securities or division thereof make any loans or advances;
(iv) issue or sell any additional shares of, or other equity interests in, the Company, or securities convertible into or exchangeable for consideration such shares or equity interests, or issue or grant any options, warrants, calls, subscription rights or other rights of any kind to acquire such additional shares, such other equity interests or such securities;
(v) redeem, repurchase or acquire any of the Capital Stock of the Company;
(vi) declare, set aside or pay any dividend or other distribution in excess respect of $2,000,000 in shares of Capital Stock of the aggregateCompany;
(vii) amend the articles of incorporation or by-laws of the Company;
(viii) except in the ordinary course of business, create make or authorize or commit to make any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not capital expenditures in excess of an aggregate of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing200,000;
(ix) sell, assign transfer, lease, sublease or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, other than such changes required by GAAP or by Law;
(xi) enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse otherwise dispose of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver Assets of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract, Company other than in the ordinary course of businessbusiness consistent with past practice;
(x) enter into any commutation of or recapture of any risks under any Retroceded Reinsurance Agreement or Assumed Reinsurance Agreement, except to the extent required by the other party thereto in accordance with the terms of such agreement;
(xi) make or change any election concerning any Taxes, change an annual accounting period or adopt or change any accounting method, enter into any Closing Agreement with respect to Taxes, settle any Tax Claim or assessment or surrender any right to claim a refund of any Taxes or obtain or enter into any contract that Tax Ruling, in each case, to the extent such action would be a Material Contract under Section 3.17(a)(ivaffect the Taxes of Company in any Tax period (or portion thereof) had it been entered into as of following the date hereofClosing Date;
(xxiixii) settle enter into any Actionnew Reinsurance Agreements (other than the binding of new risks under the terms of existing life reinsurance treaties);
(xiii) make any change in any of the policies, practices, principles or standards other than in the ordinary course of business consistent with past practice or any material change in any of the procedures or systems of the Company, in each case with respect to the Company's accounting, reserving, actuarial determinations, underwriting or retrocession, other than such changes as are required by SAP or applicable Law;
(xiv) enter into any settlement providing for material transaction, commitment or Contract between the payment Company and any of monetary damages its Affiliates, other than reinsurance transactions in an amount not to exceed $2,000,000 which does not otherwise impair the operation ordinary course of the business of the Companies following consistent with past practice;
(xv) from October 14, 2003 through the Closing, purchase or sell any Investments except in accordance with the Company's investment guidelines in effect as of October 14, 2003 and in the ordinary course of business consistent with past practice; or
(xxiiixvi) agree enter into any legally binding commitment with respect to take any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operationsforegoing.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 1 contract
Conduct of Business Prior to the Closing. (a) Parent From the date hereof through the Closing Date, the Seller covenants and agrees that, except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to the Reorganization, between the date of this Agreement and the Closing, Parent that it shall cause each the Company (x) to conduct its business in the ordinary course in all material respects, (y) to consistent with past practice and shall use commercially reasonable its best efforts to preserve intact in all material respects its business organizations and relationships with third parties and to keep available the business organization services of the Companies its present officers and (z) to comply in all material respects with all Laws applicable to the Companiesemployees. Without limiting the generality of the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between from the date of this Agreement and hereof until the ClosingClosing Date, the Seller will ensure that the Company will not, without notice to and the prior written consent of of, the Purchaser (which consent will not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will not:
(i) (A) issue, sell or redeem issue any capital stock or other ownership interests (other than as contemplated in connection with consummation shares of the ViPS Distribution)stock, noteswarrants or stock equivalents or declare or make any payment on account of the purchase, bonds redemption, retirement or other securities acquisition of such Company any Shares, (or any option, warrant or other right to acquire the sameii) (B) declare, make or pay declare any dividends or make any distributions to the holders of capital stock or other equity securities of any Company (other than dividendsSeller, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company;
(ii) amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be;
(iii) grant or announce incur any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, indebtedness from borrowed money except in the ordinary course of business consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases)practice, as the case may be;
(iv) amendloan or advance any funds to, or incur any liabilities on behalf of, the Seller or any of its Affiliates, (v) subject the assets of the Company to any additional liens or encumbrances, (vi) adopt or enter into propose any employment change in its articles of incorporation or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligationbylaws, (Bvii) merge or consolidate with any other person or entity, acquire a material amount of assets of any other person or entity or, except as required by Lawlisted on Schedule 4.1 attached, make any additional capital expenditure or acquire any additional fixed assets, (Cviii) sell, lease, license or otherwise dispose of any material assets or property except (1) pursuant to any Plans, programs existing contracts or agreements existing on the date of this Agreement, or commitments and (D2) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with past practice; provided, however, that in no event will the past practices Company sell, lease, license or otherwise dispose of any asset or assets having a value greater than $50,000 singly or $100,000 in the aggregate without the prior written consent of Purchaser; (ix) enter into any contract that, if entered into prior to the date hereof, would be a Material Contract, or renew (whether by exercise of option or otherwise) or amend in any respect any Material Contract or any Lease (as defined in Section 2.27), (x) increase compensation or benefits to any officer, director or employee of the business Company or pay any bonus, severance or termination pay to such officer, director or employee of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on (xi) fail to maintain the date of this AgreementCompany's properties and other assets in good working order, or any such plans or programs which may be hereafter adopted, (xii) fail to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more make all of the transactions contemplated by this Agreement (Company's scheduled capital expenditures necessary and appropriate for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv));
(vi) except in the ordinary course of businessits continued operations, (Axiii) incur take or agree or commit to take any Indebtedness for borrowed money (other than Indebtedness to Parent action that would make any representation or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid warranty of the Seller inaccurate in any respect at or prior to the ClosingClosing Date (including, without limitation, the representation and warranty set forth in Section 2.8 (Absence of Certain Changes, Events and Conditions) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheetabove) or accounts receivable cycle, (C) issue any debt securities, omit or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregate;
(viii) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing;
(ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, other than such changes required by GAAP or by Law;
(xi) enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur agree or commit to omit to take any capital expenditures other than capital expenditures incurred action necessary to prevent any such representation or committed to warranty from being inaccurate in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
any respect at any such time or (xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership to agree or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than commit to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that do any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract, other than in the ordinary course of business, or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of the date hereof;
(xxii) settle any Action, other than any settlement providing for the payment of monetary damages in an amount not to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following the Closing; or
(xxiii) agree to take any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operationsforegoing.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 1 contract
Conduct of Business Prior to the Closing. (a) Parent covenants and agrees that, except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to the Reorganization, between the date of this Agreement and the Closing, Parent shall cause each Company (x) to conduct its business in the ordinary course in all material respects, (y) to use commercially reasonable efforts to preserve intact in all material respects the business organization of the Companies and (z) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent Seller covenants and agrees that, between the date of this Agreement and the ClosingClosing Date, without the prior written consent except as set forth in Section 5.01 of the Purchaser (which consent will not be unreasonably withheld Disclosure Letter or delayed, provided the Purchaser may withhold or delay consent for as contemplated by any purpose under other provision of this Agreement, including unless Purchaser shall otherwise agree in writing:
(a) Seller shall cause the Grafts Business to be conducted in the ordinary course in a manner substantially consistent with past practice and to use all reasonable efforts to preserve the Grafts Business substantially intact and to preserve current relationships with customers and suppliers of, and other Persons whose significant business relationships with, the Grafts Business; provided, however, that no action by any Selling Entity or any Target Company with respect to matters specifically addressed by any provision of Section 5.17, if 5.01(b) or Section 5.01(c) shall be deemed a Lender has denied breach of this Section 5.01(a) unless such action would constitute a breach of any such provision of Section 5.01(b) or delayed the granting of such consent request made by the PurchaserSection 5.01(c), each as applicable;
(b) Seller shall not permit, and Seller shall ensure that no Selling Entity permits, any Target Company will notto:
(i) (A) issueamend its Charter or Bylaws or permit it to merge or consolidate, sell or redeem obligate itself to do so, with or into any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Companyentity;
(ii) amend issue or restate sell any shares of capital stock of, or other equity interests in such Target Company or securities convertible into or exchangeable for such shares or equity interests or permit the certificate sale or transfer of incorporation any property or bylaws (or similar organizational documents) assets of such Target Company, as the case may be;
(iii) grant or announce any increase in, or acceleration except for sales of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, assets in the ordinary course of business consistent in all material respects with the past practices of such Company practice and other asset sales for consideration aggregating not more than $500,000;
(which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increasesiii) declare, set aside, make or pay any dividend or other distribution, payable in stock, property or otherwise (other than in cash), as with respect to any of its capital stock except in the case may beordinary course of business and consistent in all material respects with past practice;
(iv) amendestablish or materially increase any bonus, adopt insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan, or otherwise increase the compensation payable or to become payable to any officers or key employees of any Target Company, except in the ordinary course of business or as may be required by Law or by existing contractual arrangements;
(v) enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors employees of such Target Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to adopt or enter into any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not collective bargaining agreement covering employees of any Company with current annual salaries Target Company, except in excess the ordinary course of business or as may be required by Law or by existing contractual arrangements;
(vi) acquire (including, without limitation, by merger, consolidation or acquisition of stock or assets) any corporation, partnership, limited liability company, other business organization or any division thereof for consideration aggregating more than $125,000 1,000,000;
(vii) assume, guarantee or are not former employees endorse, or otherwise as an accommodation become responsible for, the obligations of any Company with annual salaries as of their termination date in excess of $125,000Person, or make any loans or advances, except in the ordinary course of business consistent in all material respects with the past practices of the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision practice in subsections (iii) or (iv));
(vi) except in the ordinary course of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration an amount in excess of $2,000,000 in the aggregate500,000;
(viii) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible make a purchase commitment inconsistent with past practice or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000the normal, ordinary and (C) Encumbrances that will be released at or prior to the Closingusual requirements;
(ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, any Target Company other than such changes that are required by U.K. GAAP or by Lawthe generally accepted accounting principles in effect in the country in which such Target Company is based;
(x) incur any Indebtedness in excess of $250,000 in the aggregate, except Indebtedness to Seller or any Affiliate of Seller; or
(xi) enter into or terminate amend any Lease;contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.01(b).
(xiic) purchase, sell or enter into any contract to purchase or sell any real property;Seller shall ensure that no Selling Entity:
(xiiii) incur sells or commit to transfers any capital expenditures other than capital expenditures incurred or committed to Related Assets and Liabilities, except for sales in the ordinary course of business which do not exceed $6,000,000 consistent in the aggregate and is in accordance all material respects with the Companies’ capital expenditure planpast practice;
(xivii) establishes or materially increases any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the granting of stock option, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan, or otherwise increases the compensation payable or to become payable to any Continued Grafts Employee, except in the ordinary course of business, allow the lapse of any Company’s rights of ownership business or use of any material Intellectual Property;as may be required by Law or by existing contractual arrangements; or
(xviii) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter enters into any closing agreement, settle employment or severance agreements with any material claim or material assessment in respect of TaxesContinued Grafts Employee, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any collective bargaining agreement or arrangement with any Related Personcovering Continued Grafts Employees, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract, other than except in the ordinary course of business, or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of the date hereof;
(xxii) settle any Action, other than any settlement providing for the payment of monetary damages in an amount not to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following the Closing; or
(xxiii) agree to take any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operations.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated may be required by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt FinancingLaw.
Appears in 1 contract
Sources: Share and Asset Purchase Agreement (Centerpulse LTD)
Conduct of Business Prior to the Closing. (a) Parent covenants and agrees that, except Except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant as set forth in Section 5.1 of the Disclosure Schedule or with the prior written consent of Buyer (not to be unreasonably withheld or delayed), during the Reorganization, between period from the date of this Agreement and to the Closing, Parent shall Sellers will cause each Company (x) of the Target Companies to conduct its business and operations according to its ordinary and usual course of business and will use all reasonable efforts consistent therewith to preserve intact and, as applicable, maintain in good repair its properties, assets and business organizations, to keep available the services of its officers, agents and employees and to maintain satisfactory relationships with policyholders, agents and regulators, in each case in the ordinary course in all material respects, (y) to use commercially reasonable efforts to preserve intact in all material respects the business organization of the Companies and (z) to comply in all material respects with all Laws applicable to the Companiesbusiness. Without limiting the generality of the foregoing, and except as described otherwise provided in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and as set forth in Section 5.1 of the Disclosure Schedule, prior to the Closing, Sellers will not permit any of the Target Companies to, without the prior written consent of the Purchaser Buyer (which consent will not to be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will not:):
(i) (Aa) issue, sell or redeem any capital stock pledge, or other ownership interests (other than as contemplated in connection with consummation authorize or propose the issuance, sale or pledge of the ViPS Distribution), notes, bonds or other securities additional shares of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Companyclass, or securities convertible into any such shares, or any rights, warrants or options to acquire any such shares or other convertible securities;
(iib) amend redeem, purchase or restate the certificate otherwise acquire any outstanding shares of incorporation or bylaws (or similar organizational documents) of such Company, as the case may beits capital stock;
(iiic) grant propose or announce adopt any increase in, amendment to its Certificate or acceleration Articles of payment Incorporation or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, in the ordinary course of business consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may beBylaws;
(iv) amend, adopt or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv));
(vid) except in the ordinary course of business, (A) and consistent with past practice incur any Indebtedness indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse the obligations of any other Person;
(e) increase in any manner the rate or terms of compensation of any of its directors, officers or other than Indebtedness to Parent or to another Companyemployees, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend except such increases as are granted in the ordinary course accounts payable cycle (including of business consistent with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securitiespast practice, or (D) assume enter into any employment, severance or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company)collective bargaining agreement;
(vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregate;
(viiif) except in the ordinary course of business, create any Encumbrances on and consistent with past practice (i) sell, transfer or otherwise dispose of any of their its property or assets or (ii) mortgage or encumber any of its property or assets;
(g) enter into, tangible materially modify or intangibleamend, or terminate any material agreements, commitments or contracts, except as provided by this Agreement or in the ordinary course of business and consistent with past practice (provided, however, that any such modification, amendment or termination of an agreement, commitment or contract involving CyberLink must be approved by Buyer, such approval not to be unreasonably withheld);
(h) declare, set aside or pay any dividend or other distribution in respect of its capital stock, other than (Athe projected dividends set forth in Section 5.1(h) Permitted Encumbrances, (Bof the Disclosure Schedule and except as provided in Section 5.15 hereof and Section 3.22(a) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the ClosingDisclosure Schedule;
(ixi) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for consistent with past practice or with respect to capital projects approved prior to the date hereof and disclosed in Section 5.1(i) of the Disclosure Schedule, enter into any such assets having agreement or commitment involving an aggregate value of less than capital expenditure or commitment exceeding $2,000,000 and except for transfers to another Company25,000;
(xj) amend, adopt or terminate any of its Benefit Plans with respect to Target Employees, except as required by law and except as contemplated by this Agreement;
(k) make any material change in any method of accounting methods, principles or accounting practice or policy used by such Companypractices, except as the case may be, other than such changes be required by a change in SAP or GAAP or by Lawapplicable law;
(xil) enter into or terminate take any Leaseaction (other than actions specifically contemplated by this Agreement) that would intentionally result in a breach of the representations and warranties contained in Article III of this Agreement;
(xiim) purchase, sell change its tax accounting or enter into reporting principles or practices or settle or compromise (or have settled or compromised on its behalf) any contract liability with respect to purchase or sell any real propertyTaxes;
(xiiin) incur settle or commit to compromise any capital expenditures Existing Litigation for other than capital expenditures incurred monetary damages or committed to settle or compromise any other claim (including arbitration, but excluding claims settled in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure planunder insurance policies issued by United Life);
(xivo) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than fail to effect the Reorganization), settle or compromise any material Tax Contest, change comply in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period with applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Datelaws;
(xvip) engage in make any “reportable transaction,” including payment to any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service rulingaffiliate, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than except pursuant to existing agreements disclosed in the Disclosure Schedule or as otherwise permitted by this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract, other than in the ordinary course of business, or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of the date hereof;
(xxii) settle any Action, other than any settlement providing for the payment of monetary damages in an amount not to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following the Closing; or
(xxiiiq) agree in writing to take any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operationsforegoing actions.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 1 contract
Sources: Purchase Agreement (Penncorp Financial Group Inc /De/)
Conduct of Business Prior to the Closing. (a) Parent covenants Between the Effective Date and agrees that, except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to the Reorganization, between earlier of the date of termination of this Agreement and the ClosingClosing Date, Parent unless Buyer shall cause each Company otherwise consent to in writing (x) such consent not to conduct its business in the ordinary course in all material respectsbe unreasonably withheld, (y) to use commercially reasonable efforts to preserve intact in all material respects delayed or conditioned), the business organization of the Acquired Companies and (z) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, without the prior written consent of the Purchaser (which consent will not shall be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will not:
(i) (A) issue, sell or redeem any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company;
(ii) amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be;
(iii) grant or announce any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, conducted only in the ordinary course of business consistent with past practice. By way of amplification and not limitation, between the past practices Effective Date and the earlier of the date of termination of this Agreement and the Closing Date, none of the Acquired Companies shall, except as set forth in Section 7.1 of the Disclosure Schedules, do, or propose to do, directly or indirectly, any of the following without the prior written consent of Buyer (such Company consent not to be unreasonably withheld, delayed or conditioned):
(which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may bea) amend or otherwise change its certificate of incorporation or bylaws or other applicable organizational documents;
(ivb) amendauthorize for issuance, adopt issue, sell, pledge, grant, dispose of or enter into any employment or severance agreement with or applicable otherwise subject to any Encumbrance (other than any Permitted Encumbrance) (i) any shares of capital stock of the current or former employees, officers, consultants or directors of such Company, or any options, warrants, convertible securities or other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant rights of any kind to acquire any Plans, programs or agreements existing on the date of this Agreementsuch shares, or any other ownership interest in the Company, except for the issuance of shares upon the exercise of options or warrants outstanding as of the Effective Date or (Dii) solely with respect to consultants and employees who are not employees any properties or assets of any Company with current annual salaries the Acquired Companies having a value in excess of $125,000 100,000, other than in connection with the incurrence of Indebtedness otherwise permitted hereunder or are not former employees in connection with sales or transfers of any Company with annual salaries as of their termination date in excess of $125,000, inventory or accounts receivable in the ordinary course of business consistent with the past practices of the business of the Companiespractice;
(vc) with respect to any employees of a Companyreclassify, provide any additional benefits under a Plan combine, split, subdivide or program existing on the date of this Agreementredeem, or any such plans purchase or programs which may be hereafter adoptedotherwise acquire, to the extent any such benefit is conditioned directly or indirectly on the consummation indirectly, any of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv))its capital stock;
(vid) except declare, set aside or pay any dividend or other distribution (whether in the ordinary course cash, shares or property or any combination thereof) in respect of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company)its capital stock;
(viie) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of acquire any corporation, partnership partnership, limited liability company or other business organization or Person or division thereof for consideration assets having a value in excess of $2,000,000 in the aggregate100,000;
(viiif) except in for the ordinary course of businessMerger, create any Encumbrances on any of their assets, tangible adopt or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing;
(ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, other than such changes required by GAAP or by Law;
(xi) enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxesapprove a plan of, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxeseffect any, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, or adopt resolutions providing for or authorizing such liquidation, or adopt a plan of or effect any dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereofCompany;
(xixg) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
incur any Indebtedness (xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract, other than in the ordinary course of business and consistent with past practice) or otherwise cause any of its assets or properties to become subject to a material Encumbrance that is not a Permitted Encumbrance;
(h) make any loans or advances to any Person (other than advancement of expenses and commissions to employees in the ordinary course of business);
(i) cancel any debts, or waive or compromise any claims or waive any material rights, in each case other than write offs of receivables not to exceed $50,000 individually or $250,000 in the aggregate;
(j) authorize, or make any commitment with respect to, any single capital expenditure that is in excess of $100,000 or capital expenditures that are, in the aggregate, in excess of $250,000 for the Acquired Companies, or enter into any contract that would be lease of real or personal property or any renewals thereof involving a Material Contract under Section 3.17(a)(iv) had it been entered into as term of the date hereofmore than one year or rental obligation exceeding $250,000 per year in any single case;
(xxiik) settle any Actionincrease the compensation payable or to become payable or the benefits provided to its directors, other than any settlement providing officers or employees, except for the payment of monetary damages in an amount (i) ordinary course bonuses to non-officer employees, not to exceed $2,000,000 which does 50,000 in the aggregate and (ii) retention, performance or similar bonuses not otherwise impair to exceed $500,000 in the operation aggregate, or establish, adopt, enter into or amend any Company Employee Plan, other than as may be required by any Governmental Authority or to comply with any applicable Laws;
(l) hire any employee with a base salary in excess of $100,000, materially increase the number of persons employed by the Acquired Companies or terminate the employment of any of the business employees of the Acquired Companies following (other than for cause or in the Closingordinary course of business);
(m) make, change or revoke any Tax election or settle or compromise any federal, provincial, state, local or foreign Tax liability, surrender any right to claim a Tax refund, enter into a Tax sharing agreement, obtain any Tax ruling or file any amended Tax Return or waive or extend the statute of limitations in respect of such Taxes;
(n) commence or settle any material Action other than Actions relating to the collection of uncollected accounts receivable;
(o) pay any material amount or agree to pay any material amount or perform any material obligation in settlement or compromise of any Actions or claims of liability against the Company or any of its directors, officers, employees or agents;
(p) change the Company’s methods of accounting, except as required by GAAP, applicable Law or official interpretations thereof;
(q) enter into, authorize or permit any Contract or transaction that would be required to be disclosed pursuant to Sections 4.14(a) and 4.17 of the Disclosure Schedules if entered into prior to the Effective Date;
(r) make any material modification or amendment to any existing Material Contract;
(s) assign, transfer, convey, sell or delegate (or purport to do any of the foregoing) to any Person any cause of action, chose in action or part thereof arising out of or in any way related to the Specified Litigation;
(t) assign, transfer, convey or sell the Portfolio Management System Patent; or
(xxiiiu) agree enter into any agreement, or otherwise make a commitment to take do any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operationsforegoing.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 1 contract
Sources: Acquisition Agreement and Plan of Merger (Envestnet, Inc.)
Conduct of Business Prior to the Closing. (a) Parent covenants and agrees that, except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to the Reorganization, between the date of this Agreement and the Closing, Parent shall cause each Company (x) to conduct its business in the ordinary course in all material respects, (y) to use commercially reasonable efforts to preserve intact in all material respects the business organization of the Companies and (z) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, without the prior written consent of the Purchaser (which consent will not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will not:
(i) (A) issue, sell or redeem any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company;
(ii) amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be;
(iii) grant or announce any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, in the ordinary course of business consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may be;
(iv) amend, adopt or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv));
(vi) except in the ordinary course of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregate;
(viii) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing;
(ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, other than such changes required by GAAP or by Law;
(xi) enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract, other than in the ordinary course of business, or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of the date hereof;
(xxii) settle any Action, other than any settlement providing for the payment of monetary damages in an amount not to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following the Closing; or
(xxiii) agree to take any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operations.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 1 contract
Sources: Merger Agreement (Emdeon Corp)
Conduct of Business Prior to the Closing. Except as required by applicable Law or as otherwise contemplated by or necessary to effectuate the Transaction Agreements, and except for matters identified in Schedule 5.01, from the date hereof through the Closing, unless Acquiror otherwise consents in advance (which consent shall not be unreasonably withheld, delayed or conditioned), Sellers will use their commercially reasonable efforts to cause the Companies to (a) Parent covenants and agrees that, except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to operate the Reorganization, between the date of this Agreement Companies and the Closing, Parent shall cause each Company (x) to conduct its business Transferred Business in the ordinary course in all material respects, respects and (yb) to use commercially reasonable efforts to preserve intact in all material respects the business organization refrain from taking any of the Companies and (z) to comply in all material respects following actions with all Laws applicable respect to the Companies. Without limiting Companies or the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, without the prior written consent of the Purchaser (which consent will not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will notTransferred Business:
(i) (A) issuedeclare, sell or redeem any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declareset aside, make or pay any dividends or distributions to the holders of capital stock dividend or other equity securities distribution in respect of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock the Capital Stock of any Company;
(ii) amend repurchase, redeem, repay or restate the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be;
(iii) grant or announce otherwise acquire any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees outstanding Capital Stock of any Company with current annual salaries in excess of $125,000, in the ordinary course of business consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may be;
(iv) amend, adopt or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companies;
(viii) transfer, issue, sell or dispose of any Capital Stock or other securities of any of the Companies or grant options, warrants, calls or other rights to purchase or otherwise acquire Capital Stock or other securities of any of the Companies or merge any of the Companies with respect to or into or consolidate any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this AgreementCompanies with, or agree to merge any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for Companies with or into or consolidate any of the avoidance of doubtCompanies with, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv))other Person;
(viiv) except effect any recapitalization, reclassification, stock split or like change in the ordinary course capitalization of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregate;
(viii) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing;
(ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, other than such changes required by GAAP or by Law;
(xi) enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually Companies or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization restructuring or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereofCompanies;
(xixv) subject amend the Companies following the Closing to an agreement that prohibits certificate of incorporation or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into by-laws of any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxivi) enter intomake any material change in the underwriting, amendclaims administration, modifyreserving or financial accounting policies, practices or terminate a Material Contractprinciples of any Insurance Company in effect on the date hereof (other than any change required or advised in writing by the RMA, applicable Law or SAP or, in respect of underwriting or claims administration, in the ordinary course of business);
(vii) other than in the ordinary course of business, (A) purchase, sell, lease, exchange, or otherwise dispose of or acquire any property or assets, (B) grant or take any other action that will result in the imposition of any Lien on any property or assets of any of the Companies (other than Permitted Liens or any Lien incurred under the escrow agreement filed in connection with the plans of operations filed by PAIC with the RMA) or (C) enter into any lease of real property except any renewals of existing leases in the ordinary course of business;
(viii) incur any financial indebtedness for borrowed money from third party lending sources or assume, grant, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances (in each case, other than (A) in the ordinary course of business (including advance commissions to Insurance Agents in the ordinary course of business), (B) pursuant to intercompany borrowing arrangements (other than the CMFG Life Facility)
(I) that will be repaid in full and terminated at the Closing or (II) solely between or among the Companies) or (C) pursuant to the CMFG Life Facility or the JPMorgan Facility;
(ix) make or incur any capital expenditure in excess of $250,000 individually or $500,000 in the aggregate;
(x) other than in the ordinary course of business enter into, amend (in any material respect) or terminate any reinsurance or other similar contract entered into in connection with the Transferred Business;
(xi) other than in the ordinary course of business, modify, amend (in any material respect) or terminate (other than at its stated expiry) any of the Material Contracts or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been which would, if entered into as of prior to the date hereof, have been a Material Contract;
(xxiixii) settle any Action, other than any settlement providing for in the payment ordinary course of monetary damages in an amount not to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following the Closing; or
(xxiii) agree to take any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operations.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated required by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between or of any Company Benefit Plan or other contract as in existence on the date hereof, (A) grant any material increase in the wages, salaries or bonuses to any Employee or other service provider or (B) establish, adopt, terminate, amend or otherwise become liable with respect to any Company Benefit Plan (or promise to take any such action(s)) in a manner that would materially increase the costs or liabilities of this Agreement and the Companies;
(xiii) terminate the employment of any employee of any Company other than in the ordinary course of business or for cause or transfer the employment of any employee of any Company to an Affiliate thereof;
(xiv) enter into any transactions, contracts or understandings with Affiliates that would be binding on the Companies after the Closing;
(xv) pay, Master LLC settle or compromise any Action or threatened Action involving any Company (except for claims arising under or in connection with Crop Hail Policies and EBS LLC shall FCIC Policies (A) comprising the CUMIS Retained Business or (B) within applicable policy limits or otherwise in the ordinary course of business), other than any settlement or compromise (x) that involves solely cash payments not conduct in the aggregate for any business and all such settled or activities compromised Actions in excess of $1,000,000 or incur (y) to the extent reserved against in the Statutory Statements or guarantee the payment or performance Business Financial Statements; or
(xvi) enter into any legally binding commitment with respect to any of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financingforegoing.
Appears in 1 contract
Sources: Stock Purchase Agreement (HCC Insurance Holdings Inc/De/)
Conduct of Business Prior to the Closing. (a) Parent covenants and agrees that, except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to the Reorganization, between From the date of this Agreement and hereof to the Closing, Parent the Shareholders shall cause the business of the Company and each Company (x) of its Subsidiaries to conduct its business be conducted in the ordinary course in all material respects, (y) and shall cause the Company and each of its Subsidiaries to use commercially their reasonable efforts to preserve intact in all material respects the current business organization and existing business relationships including with customers and suppliers. In addition, the Shareholders shall not cause or permit the Company or any of its Subsidiaries to do any of the Companies and (z) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, following without the prior written consent of the Purchaser Purchaser:
(which consent will not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under a) except as contemplated by this Agreement, including Section 5.17, if a Lender has denied amend its Certificate of Incorporation or delayed the granting of such consent request made by the Purchaser), each Company will not:By-Laws;
(ib) (A) issue, sell or redeem any capital stock or other ownership interests (other than except as contemplated set forth in connection with consummation Section 5.10 of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declareDisclosure Schedule, make or grant any increase in compensation or employee benefits or in severance or termination pay to any dividends officer, executive officer, employee, member of the Board of Directors, agent or distributions to the holders of capital stock consultant, or enter into any employment agreement with any executive officer or other equity securities of any Company (other than dividendsindividual, distributions and redemptions declaredin each case except as may be required under employment, made collective bargaining or paid solely termination agreements in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company;
(ii) amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be;
(iii) grant or announce any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing effect on the date of this Agreement or (C) hereof or, solely with respect to employees who are not employees other than officers and members of any Company with current annual salaries in excess the Board of $125,000Directors, in the ordinary course of business consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may bebusiness;
(ivc) amend, adopt or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) except as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision or as set forth in subsections (iii) or (iv));
(vi) except in the ordinary course of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregate;
(viii) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing;
(ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, other than such changes required by GAAP or by Law;
(xi) enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver Section 5.10 of the limitation period applicable to any claim or assessment in respect of TaxesDisclosure Schedule, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing thereof or otherwise acquire or agree to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contractacquire, other than in the ordinary course of business, any assets which are material, individually or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of in the date hereofaggregate, to the Company;
(xxiid) settle except as set forth in Section 5.10 of the Disclosure Schedule, sell, pledge, mortgage, assign, lease, give a security interest in or otherwise encumber or dispose of, or agree to do any Actionof the foregoing with respect to, any of its assets, except in the ordinary course of business;
(e) except in the ordinary course of business, enter into or amend any other than any settlement providing commitment, contractual obligation or transaction which calls for the payment aggregate payments in excess of monetary damages in an amount not to exceed $2,000,000 100,000 and which does not otherwise impair expire or is not terminable without cost or penalty at the operation Company’s option within a 180 day period;
(f) except in the ordinary course of business, accelerate the receipt of amounts due with respect to the Company’s trade accounts receivable or any other accounts receivable;
(g) except in the ordinary course of business, lengthen the period for payment of the business Company’s accounts payable;
(i) except for the distribution of the Companies following the Closing; Special Distribution Amount pursuant to Section 5.23, declare, set aside, pay or make any dividend or other distribution or payment (whether in cash, stock or property) with respect to, or
(xxiii) agree to take any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, purchase or redeem, any shares of capital stock, or (ii) except as set forth in Section 5.10 of the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01Disclosure Schedule, prior make any other payments or benefits to the ClosingShareholders or Affiliates of the Shareholders, Parent shall exercise, consistent with the terms and conditions of other than payments contemplated by this Agreement, complete control of and supervision over the Companies and their respective operations.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.;
Appears in 1 contract
Sources: Stock Purchase Agreement and Plan of Merger (Equinox Group Inc)
Conduct of Business Prior to the Closing. Except for the steps taken as part of the Pre-Closing Reorganization (a) Parent covenants as defined in the Definitive Agreement), the sale process for the PRV and agrees that[***], except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to the Reorganization, between the date of this Agreement and the Closing, Parent Seller shall cause each Company (x) of the Ryplazim Targets to conduct its business operate their respective businesses in the ordinary course in all material respects, (y) consistent with past practice and to use their respective commercially reasonable efforts to preserve intact in all material respects the Ryplazim Targets’s business organization of the Companies organization, relationships with customers and (z) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement suppliers and the Closingvalue of its business and the asserts thereof, and not, without the prior written consent of the Purchaser (Kedrion, which consent will shall not be unreasonably withheld withheld, delayed or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will notconditioned:
(i) (A) issue, sell amend its charter or redeem any capital stock by-laws or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Companysimilar organizational documents;
(ii) amend (A) split or restate reclassify any shares of capital stock; (B) issue, pledge, transfer, encumber or sell any additional shares of capital stock of any class or series, or any securities convertible into or exchangeable for, or options or rights to acquire, shares of capital stock of any class or series; or (C) repurchase, redeem or otherwise acquire any shares of the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may becapital stock;
(iii) grant enter into, amend or announce terminate or waive any increase inmaterial right under any material contract, except material contracts entered into, amended or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, terminated in the ordinary course of business consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may bepractice or [***];
(iv) amendacquire any business, adopt material assets or person, whether by merger, consolidation, purchase of assets or equity interests, in a single transaction or a series of related transactions or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course new line of business consistent with the past practices of the or materially change or terminate any business of the Companiespractice;
(v) with respect make any capital expenditure outside of the normal course of business or except as authorized by [***] or forecasted capex of the Ryplazim Targets previously delivered to any employees of a Company, provide any additional benefits under a Plan Kedrion or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, uploaded to the extent any such benefit is conditioned directly or indirectly on Data Room (as defined in the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv)SPA);
(vi) (A) sell, lease, license or otherwise dispose of, or incur any encumbrances on, any material assets, material intellectual property; (B) engage in any liquidation, dissolution, restructuring or other reorganization or any merger, recapitalization, business combination or similar material transaction other than the Pre-Closing Reorganization; or (C) or dispose of or disclose to any Person, other than representatives of Kedrion, any material proprietary intellectual property; other than in the normal course of business or as practised by the Ryplazim Targets in the last twenty-four (24) months;
(vii) (A) incur any material indebtedness other than in favor of an Affiliate and which shall be satisfied in full prior to the Closing or (B) make any loans or advances to, or capital contributions or investments in, any person other than Affiliates except loans or advances to customers in the form of trade credit or deferred purchase price arrangements in the ordinary course of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregate;
(viii) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrancesadopt or amend in any material respect, or accelerate the payment or vesting of benefits or amounts payable under, any benefit plan; or (B) Encumbrances on assets having an aggregate value not increase or adjust the compensation or fringe benefits or terms of employment of, or enter into any new employment, bonus or incentive arrangement with, any director, officer or employee of the Ryplazim Targets other than in excess the normal course of $2,000,000, and (C) Encumbrances that will be released at business or prior to as practised by Seller in the Closinglast year;
(ix) sellimplement or effect any, assign new early retirement program, severance program or transfer any other program with respect to the employees of their tangible assets except the Ryplazim Targets other than in the ordinary normal course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Companyor as practised by Seller in the last twenty-four (24) months;
(x) make (A) change any material tax accounting principles, methods or practices with respect to Taxes; or (B) change in any method of accounting or accounting practice or policy used by such Company, practices in any material respect except as the case may be, other than such changes required by GAAP or by Law;IFRS; provided that nothing in this paragraph (x) shall be interpreted as limiting the ability of the Seller to give effect to the Pre-Closing Reorganization in a tax efficient manner, which could reduce the tax balances and tax attributes of the Ryplazim Targets in a significant manner.
(xi) enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim legal proceeding or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, investigation pertaining to the extent that any of the foregoing actions have, individually Ryplazim Targets or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate their respective Business or enter into any agreement consent decree, injunction or arrangement with similar restraint or form of equitable relief in settlement of any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract, other than in the ordinary course of business, or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of the date hereof;
(xxii) settle any Action, other than any settlement providing for the payment of monetary damages in an amount not to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following the Closingproceeding; or
(xxiiixii) agree enter into any commitment or agreement to take any of the actions specified described in Sections 5.01(a)(i)-(xxiiclauses “(i)” through “(xi)” of this Section 6(c), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operationsexpressly permitted thereunder.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 1 contract
Sources: Share Purchase Agreement (Liminal BioSciences Inc.)
Conduct of Business Prior to the Closing. (a) Parent covenants and agrees that, except Except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to during the Reorganization, between period from the date of this Agreement to the earlier of the Closing Date and the Closingtermination of this Agreement in accordance with Article 9, Parent the Company shall, and shall cause each the Company Subsidiaries to, (xi) to conduct operate its business in the ordinary course in all material respects, (y) to use commercially reasonable efforts to preserve intact in all material respects the business organization of the Companies and (z) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, without the prior written consent of the Purchaser (which consent will not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will not:
(i) (A) issue, sell or redeem any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company;
(ii) amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be;
(iii) grant or announce any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, in the ordinary course of business consistent with past practice, and (ii) not undertake any of the past practices following actions without the prior written consent of such Company the Buyer (which consent shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases)not be unreasonably withheld, as the case may beconditioned or delayed):
(a) amend or otherwise change its certificate of incorporation or bylaws or equivalent Organizational Documents;
(ivb) amend(i) issue or sell, adopt or enter into any employment or severance agreement with or applicable to any at a price less than the price of the current or former employeesoffering of Company Series A Preferred Stock consummated on June 27, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation2024, (Bii) as required by Lawtransfer, (C) pursuant to any Plans, programs dispose of or agreements existing on the date of this Agreementencumber its Equity Interests, or (Diii) solely with respect redeem, purchase or otherwise acquire any of its Equity Interests, other than, issuances pursuant to consultants and employees who are not employees the SIM LTIP;
(c) sell, transfer, lease, license, sublicense, or otherwise dispose of any Company with current annual salaries property or assets having a value in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv));
(vi) except in the ordinary course of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregate;
(viii) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing;
(ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, other than such changes required by GAAP or by Law;
(xi) enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract100,000, other than in the ordinary course of business, or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of the date hereof;
(xxiid) settle (i) incur, forgive, guarantee or modify any ActionIndebtedness, other than or (ii) make any settlement providing for the payment of monetary damages loans or advances, in each case in an amount not greater than $250,000 other than in the ordinary course of business;
(e) hire any new employee, except (i) for any such new employee having an annual base salary of less than $300,000, (ii) employees who are terminable at will, or (iii) to exceed $2,000,000 which does not otherwise impair replace any terminated or departed employee with substantially similar compensation;
(f) adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the operation filing of the business of the Companies following the Closingany bankruptcy petition against it under any similar Law;
(g) make any material change to its accounting (including Tax accounting) methods, principles or practices, except as required by Law or GAAP; or
(xxiiih) agree any agreement to take do any of the actions specified foregoing, or any action or omission that would result in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, any of the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operationsforegoing.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 1 contract
Conduct of Business Prior to the Closing. (a) Parent covenants Between the date of this Agreement and agrees thatthe Closing Date, except as described unless Acquiror shall otherwise agree in Exhibit 5.01 or as otherwise expressly contemplated by this Agreementwriting, including pursuant to the Reorganizationbusiness of the Company shall be conducted only in the ordinary course of business consistent with past practice; and the Company shall, preserve substantially intact the business organization and assets of the Company, keep available the services of the current officers, employees and consultants of the Company and preserve the current relationships of the Company with customers, suppliers and other persons with which the Company has significant business relations. Without limiting the foregoing, between the date of this Agreement and the ClosingClosing Date, Parent shall cause each Company (x) to conduct its business in other than the ordinary course in all material respects, (y) to use commercially reasonable efforts to preserve intact in all material respects cancellation of Debt contemplated by the business organization issuance of the Companies Loan Conversion Shares and (z) repayment of other Debt of the Company in exchange for a full release for all obligations relating thereto, the Company shall not do, or propose to comply in all material respects with all Laws applicable to do, directly or indirectly, any of the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, following without the prior written consent of the Purchaser (which consent will not be unreasonably withheld Acquiror or delayed, provided the Purchaser may withhold or delay consent for any purpose under as explicitly contemplated by this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will not:
(i) (A) issue, sell or redeem any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company;
(iia) amend or restate the otherwise change its certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may bebylaws;
(iiib) grant issue, sell, pledge, dispose of or announce otherwise subject to any increase inEncumbrance (i) any shares of capital stock of the Company, or acceleration of payment or vesting ofany options, the salarieswarrants, bonuses convertible securities or other compensation rights of any kind to acquire any such shares, or benefits payable by such Company, as any other ownership interest in the case may be, to Company or (ii) any properties or assets of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms sales or transfers of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, inventory in the ordinary course of business consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may bepractice;
(ivc) amenddeclare, adopt set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, or make any other payment on or with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock or make any other change with respect to its capital structure (other than a change related to the authorization and issuance of the Loan Conversion Shares);
(e) acquire any Person, other business organization or division thereof or any material amount of assets, or enter into any employment joint venture, strategic alliance, exclusive dealing, noncompetition or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companiessimilar Contract;
(vf) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (except for the avoidance of doubtMerger, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv));
(vi) except in the ordinary course of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregate;
(viii) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing;
(ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, other than such changes required by GAAP or by Law;
(xi) enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets ofCompany, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereofotherwise alter the Company’s corporate structure;
(xixg) subject incur any Debt or assume, guarantee or endorse, or otherwise become responsible for, the Companies following the Closing to an agreement that prohibits obligations of any Person, or materially restricts the Companies from engaging in the business in which the Companies are currently engagedmake any loans or advances;
(xxh) except as contemplated on Schedule 6.1, amend, modifywaive, terminate modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company’s rights thereunder, or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract, Contract other than in the ordinary course of businessbusiness consistent with past practice;
(i) authorize, or make any commitment with respect to capital expenditures that are individually or in the aggregate, in excess of $15,000 for the Company;
(j) enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as lease of the date hereofreal or personal property or any renewals thereof;
(xxiik) increase the compensation payable or the benefits provided to its directors, officers or employees, or grant any severance or termination payment to, or loan or advance any amount to, any director or employee of the Company, or establish, adopt, enter into or amend any Plan;
(l) other than any agreement relating to the repayment of Debt or the issuance of the Loan Conversion Shares in connection with the conversion of Debt, enter into any Contract with any Related Party of the Company;
(m) make any change in any method of accounting or accounting practice or policy, except as required by GAAP;
(n) make, revoke or modify any Tax election, settle or compromise any ActionTax liability or file any Return other than on a basis consistent with past practice;
(o) pay, discharge or satisfy any claim, liability or obligation, other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice, of liabilities reflected or reserved against on the Balance Sheet or subsequently incurred in the ordinary course of business consistent with past practice;
(p) cancel, compromise, waive or release any settlement providing for right or claim other than in the payment ordinary course of monetary damages business consistent with past practice;
(q) permit the lapse of any existing policy of insurance relating to the business or assets of the Company;
(r) permit the lapse of any right relating to Intellectual Property or any other intangible asset used in an amount not to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following Company;
(s) accelerate the Closingcollection of or discount any accounts receivable, delay the payment of accounts payable or defer expenses, reduce inventories or otherwise increase cash on hand, except in the ordinary course of business consistent with past practice;
(t) other than any agreement relating to the repayment of Debt or the issuance of the Loan Conversion Shares in connection with the conversion of Debt, enter into any contracts of the nature described in Section 3.25;
(u) commence or settle any Action;
(v) take any action, or intentionally fail to take any action, that would cause any representation or warranty made by the Company or Stockholder in this Agreement or any Ancillary Agreement to be untrue or result in a breach of any covenant made by the Company or Stockholder in this Agreement or any Ancillary Agreement, or that has or would reasonably be expected to have a Company Material Adverse Effect; or
(xxiiiw) agree announce an intention, enter into any formal or informal agreement, or otherwise make a commitment to take do any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operationsforegoing.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 1 contract
Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) Parent covenants and agrees that, except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to the Reorganization, between the date of this Agreement and the Closing, Parent Goldcorp USA shall cause each Company (x) Marigold to conduct its business and Homestake shall cooperate with Goldcorp USA in the ordinary course in all material respects, (y) to use commercially reasonable efforts to preserve intact in all material respects the business organization of the Companies and (z) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, without the prior written consent of the Purchaser (which consent will not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will notcausing Marigold to:
(i) (A) issue, sell or redeem any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company;
(ii) amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be;
(iii) grant or announce any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, in the ordinary course of business consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may be;
(iv) amend, adopt or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of conduct the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv));
(vi) except Venture in the ordinary course of business; and
(ii) use commercially reasonable efforts to maintain and preserve intact the current organization, (A) incur any Indebtedness for borrowed money (other than Indebtedness business and franchise of the Venture and to Parent or to another Companypreserve the rights, trade credit franchises, goodwill and accounts payablerelationships of the Employees and the customers, lenders, suppliers, regulators and Indebtedness that will be repaid at or prior to others having business relationships with the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company)Venture;
(viib) make any acquisition Goldcorp USA and Homestake shall not permit Marigold to directly or indirectly:
(by mergeri) sell, consolidationtransfer, assign, lease or acquisition of stock or assets) otherwise dispose of any corporation, partnership or other business organization or Person or division thereof for consideration capital assets having a fair market value in excess of $2,000,000 in the aggregate;
(viiiii) except give or agree to give or become a party to or bound by any guarantee, surety or indemnity in respect of the ordinary course liabilities or indebtedness of business, create any Encumbrances on any of their assets, tangible or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the ClosingPerson;
(ixiii) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, other than such changes required by GAAP or by Law;
(xi) enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) otherwise acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or securities of any other asset of the CompaniesPerson;
(xxiiv) enter intointo any transaction, amend, modifycontract or agreement, or terminate a Material Contractmodification or cancellation of any contract or agreement, other than in the ordinary course of business, except as provided in the Pre-Closing Reorganization;
(v) except as set forth in Schedule 7.1(b), make or authorize any payment to or for the benefit of any director, officer or employee on account of salary, pay, fringe benefits, commissions or other compensation, pension, bonus, share of profits or any Benefit Plan, except in the ordinary course of business and at rates consistent with previous years, or increased or agreed to increase the salary, pay, fringe benefits, commissions or other compensation, pension, bonus, share of profits or any Benefit Plan of any director, officer or employee, except in the ordinary course of business;
(vi) make or incur capital expenditures or enter into any contract that would be leases with a Material Contract under Section 3.17(a)(iv) had it been entered into capitalized value in amounts that, in the aggregate are more than $2,000,000 above the aggregate amount of capital expenditures for the applicable time period set forth in the 2014 budget, as attached as Schedule 2.6(e). For the purpose of the date hereofforegoing sentence, for any period less than a whole month, the capital expenditures for that month set forth in Schedule 2.6(e) shall be prorated on a daily basis;
(xxiivii) settle amend or change or take any Action, other than any settlement providing for the payment of monetary damages in an amount not action to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following the Closingamend or change its constating or charter documents; or
(xxiiiviii) agree to take do any of the actions specified in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, foregoing.
(c) From the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to date hereof until the Closing, Parent Goldcorp USA shall exercise, consistent with not (and shall cause its affiliated corporations to not) take any action which would jeopardize the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operations.
(bSection 338(h)(10) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as election contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt FinancingSection 10.8.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Silver Standard Resources Inc)
Conduct of Business Prior to the Closing. (a) Parent covenants and agrees that, except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to the Reorganization, between the date of this Agreement and the Closing, Parent shall cause each Company (x) to conduct its business in the ordinary course in all material respects, (y) to use commercially reasonable efforts to preserve intact in all material respects the business organization of the Companies and (z) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent Seller covenants and agrees that, between the date of this Agreement and the ClosingClosing Date, without the prior written consent except as set forth in Section 5.01 of the Purchaser (which consent will not be unreasonably withheld Disclosure Schedule or delayed, as provided the Purchaser may withhold or delay consent for in any purpose under other provision of this Agreement, unless Purchaser shall have otherwise previously agreed in writing:
(a) Seller shall cause the Valves Business to be conducted in the ordinary course of business in a manner substantially consistent with past practice and to use all reasonable efforts to preserve its business substantially intact and to preserve current relationships with customers and suppliers of, and other Persons (including employees) having business relationships with the Valves Business; provided, however, that no action by any Selling Entity or any Target Company with respect to matters specifically addressed by any provision of Section 5.17, if 5.01(b) or Section 5.01(c) shall be deemed a Lender has denied breach of this Section 5.01(a) unless such action would constitute a breach of any such provision of Section 5.01(b) or delayed the granting of such consent request made by the PurchaserSection 5.01(c), each as applicable.
(b) Seller shall not permit, and Seller shall ensure that no Selling Entity permits, any Target Company will notto directly or indirectly:
(i) (A) issueamend its Charter or Bylaws or permit it to merge or consolidate, sell or redeem obligate itself to do so, with or into any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Companyentity;
(ii) amend issue or restate sell any shares of capital stock of, or other equity interests in such Target Company or securities convertible into or exchangeable for such shares or equity interests or permit the certificate sale or transfer of, or create or permit any Encumbrance other than Permitted Encumbrances or Encumbrances that will be removed at or prior to the Closing on, any property or assets of incorporation or bylaws (or similar organizational documents) of such any Target Company, as the case may be;
(iii) grant or announce any increase in, or acceleration except for sales of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, assets in the ordinary course of business consistent in all material respects with the past practices of such Company practice and other current asset sales for consideration aggregating to not more than $100,000;
(which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increasesiii) declare, set aside, make or pay any dividend or other distribution, payable in stock, property or otherwise (other than in cash), as with respect to any of its capital stock except stock dividends in the case may beordinary course of business and consistent in all material respects with past practice;
(iv) amendestablish or materially increase any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan, or otherwise increase the compensation payable or to become payable to any officers or key employees of any Target Company, except in the ordinary course of business or as may be required by Law or by existing contractual arrangements previously furnished to Purchaser;
(v) enter into any employment, retention or severance agreement with any employees of such Target Company, or adopt or enter into any employment or severance collective bargaining agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not covering employees of any Company with current annual salaries Target Company, except in excess the ordinary course of $125,000 business or are as may be required by Law or by existing contractual arrangements;
(vi) acquire (including, without limitation, by merger, consolidation or acquisition of stock or assets (it not former employees being applicable to the acquisition of assets in the ordinary course)) any corporation, partnership, limited liability company, other business organization or any division thereof;
(vii) assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Company with annual salaries as of their termination date in excess of $125,000Person, or make any loans or advances, except in the ordinary course of business consistent in all material respects with the past practices of the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision practice in subsections (iii) or (iv));
(vi) except in the ordinary course of business, (A) incur any Indebtedness for borrowed money (other than Indebtedness to Parent or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securities, or (D) assume or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company);
(vii) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership or other business organization or Person or division thereof for consideration an amount not in excess of $2,000,000 100,000 in the aggregate;
(viii) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible make a purchase commitment inconsistent with past practice or intangible, other than (A) Permitted Encumbrances, (B) Encumbrances on assets having an aggregate value not in excess of $2,000,000the normal, ordinary and (C) Encumbrances that will be released at or prior to usual requirements of the ClosingValves Business;
(ix) sell, assign or transfer any of their tangible assets except in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Company;
(x) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, any Target Company other than such changes that are required by GAAP AAP (including the generally accepted accounting principles) in effect in the country in which such Target Company is based;
(x) incur any Indebtedness or incur any non-current liability (whether or not same constitutes Indebtedness) in excess of $250,000 in the aggregate except Indebtedness to Seller or any Affiliate of Seller) provided that all of same that is so incurred is paid in full on or prior to the Closing Date or is assumed by LawPurchaser, at Purchaser's election, and the Base Cash Purchase Price is reduced in an amount equal to such Indebtedness;
(xi) enter into into, amend or terminate renew or exercise any Leaseoptions under any Material Contract or any contract specified in Section 3.08(b)(i)-(v) or materially modify the customary payment cycles for any of its payables or receivables;
(xii) purchase, sell take any action that would cause the representation in Section 3.03 to be untrue or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change incorrect in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after on the Closing Date;
(xvixiii) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) Seller shall immediately notify Purchaser if (A) adopt a plan of complete Seller (or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization any Target Company) becomes aware of any design defect or defect in the manufacturing process with respect to any inventory of the Companies (other than pursuant to this Agreement); Valves Business or (B) acquire Seller becomes aware of any facts or agree to acquire by purchasing any equity interest in circumstances from which one may reasonably conclude that a design defect or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging defect in the business manufacturing process exists with respect to products in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contract, other than in the ordinary course of business, or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of the date hereof;
(xxii) settle any Action, other than any settlement providing for the payment of monetary damages in an amount not to exceed $2,000,000 which does not otherwise impair the operation of the business of the Companies following the Closinginventory; or
(xxiiixiv) agree to take Seller shall not (and shall cause each Target Company not to) modify the design of or the manufacturing process (other than any immaterial modification) for any of its products except to the actions specified extent a defect exists in Sections 5.01(a)(i)-(xxii), except as contemplated by this Agreement, the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01such design or manufacturing process; provided that, prior to modifying any such design or manufacturing process, Seller shall notify Purchaser of any such proposed modification in the Closingdesign or manufacturing process (which notice shall contain a detailed proposal of the nature and implementation of such modification) and Purchaser shall approve the same, Parent which approval shall exercisenot be unreasonably withheld or delayed.
(c) Seller shall cause each Target Company to not terminate or reduce benefits under any of its retention plans or agreements.
(d) Seller and the other Selling Entities shall cause each Target Company to maintain all licenses, consistent permits, and other approvals specified in Section 3.12(i) and Section 3.13(b) that are material to the Valves Business.
(e) At Purchaser's request, Seller shall take all reasonable steps to assess and, if appropriate, extend the average remaining shelf life of the inventory of the Valves Business, by reprocessing same, in full compliance with Seller's quality control practices and procedures and applicable Law. Purchaser and Seller shall bear equally the terms and conditions cost of the foregoing with respect to out-of-pocket costs.
(f) After the date of this Agreement, complete Purchaser may designate two persons, as observers at the facilities of the Target Companies for quality control of and supervision over human resources functions. Each such observer shall be reasonably acceptable to the Companies and their respective operations.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement Seller and the Closingparties shall arrange, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee as soon as practicable after such designation (and approval), to introduce such individuals to the payment or performance relevant employees of any Liabilities, except as contemplated the Target Companies by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business Seller or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financingits nominee.
Appears in 1 contract
Conduct of Business Prior to the Closing. (a) Parent The Seller covenants and agrees that, except as described in Exhibit Section 5.01 of the Disclosure Schedule or as otherwise expressly contemplated by this Agreement, including pursuant to the Reorganization, between the date of this Agreement and the Closing, Parent the Seller shall cause each Company of the Companies to (xi) to conduct its business in the ordinary course in all material respects, (yii) to use commercially reasonable efforts to preserve intact in all material respects the its business organization of the Companies and (ziii) to comply in all material respects with all Laws applicable to the CompaniesLaws. Without limiting the foregoing, except Except as described in Exhibit Section 5.01 of the Disclosure Schedule or as contemplated under by this Agreement, including pursuant to the Reorganization, Parent Seller covenants and agrees that, between the date of this Agreement and the Closing, without the prior written consent of the a Purchaser (which consent will not be unreasonably withheld withheld, conditioned or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will notthe Seller shall not permit or cause any of the Companies to:
(ia) (Ai) issue, sell or redeem any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution)interests, notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) or repay any paid in share capital, (Bii) declare, make or pay any dividends or distributions (including repayments of paid in share capital) to the holders of capital stock or other equity securities of any Company (of the Companies other than cash dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent another Company or another Company) by Porex to the Seller and other than dividends permissible under applicable Law or distributions paid solely in cash, or (Ciii) split, combine or reclassify any capital stock of any Companyof the Companies;
(iib) amend or restate the its respective certificate of incorporation incorporation, articles of association or bylaws (or similar organizational documents) of such Company, as the case may beapplicable);
(iiic) grant or announce any increase in, or acceleration of payment or vesting of, the salaries, bonuses or bonuses, or, on an aggregate basis, other compensation or benefits payable by such Company, as the case may be, to any employees of any of the employees of such Company, as the case may beCompanies, other than (Ai) as required by applicable Law, (Bii) pursuant to the terms of the Plansany plans, programs or agreements existing (including bonus programs) as in effect on the date of this Agreement Agreement, or (Ciii) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, other increases in the ordinary course of business consistent with the past practices of such Company (which shall include including increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may be;
(iv) amend, adopt or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv));
(vid) except in the ordinary course of business, (Ai) incur any Indebtedness for borrowed money (other than Indebtedness to Parent a member of the Seller Group or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle), (Cii) issue any debt securities, or (Diii) assume or guarantee or otherwise become responsible for any indebtedness Indebtedness of any Person (other than Indebtedness of another Company), in the case of (i), (ii) and (iii) above, in an aggregate amount exceeding $1,000,000;
(viie) make any acquisition (by merger, consolidation, or acquisition of stock or assets) of any corporation, partnership Person or other business organization or Person or division thereof or enter into any written Contract to acquire (i) an equity interest in any legal entity or (ii) an interest in any joint venture, excluding any Contract for consideration in excess the provision of $2,000,000 in the aggregategoods or services;
(viiif) except in the ordinary course of business, create any Encumbrances on any of their assets, tangible or intangible, other than (Ai) Permitted Encumbrances, (Bii) Encumbrances on assets having an aggregate value not in excess of $2,000,000, 1,000,000 and (Ciii) Encumbrances that will be released at or prior to the Closing;
(ixg) sell, assign assign, lease or transfer any assets or Intellectual Property Rights of their tangible assets any Company, except (i) sales of inventory in the ordinary course of business and except for any such (ii) sales of other tangible assets in the ordinary course and having an aggregate a fair market value of less not more than $2,000,000 and except for transfers to another Company100,000 in the aggregate;
(xh) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may be, other than such changes required by GAAP or by applicable Law;
(xii) adopt, enter into or terminate any Lease;
(xii) purchase, sell or enter into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change in any material respect any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xixj) subject the Companies following the Closing make or commit to an agreement that prohibits or materially restricts the Companies from engaging make capital expenditures in excess of $500,000 in the business in which the Companies are currently engagedaggregate;
(xxk) amendmake or revoke any material Tax election, modify, terminate settle or compromise any material Tax claim or liability or enter into any closing agreement or arrangement with any Related PersonGovernmental Authority in respect of a material amount of Taxes, including any Intercompany Agreementin each case, or that would result which could adversely affect a period after the Closing in any Related Person having any interest in any contract, property, right or other asset of the Companiesa material manner;
(xxil) enter intoaccelerate the collection of or discount any accounts receivable, amenddelay the payment of accounts payable, modifydefer expenses or other accrued liabilities, reduce inventories or terminate a Material Contractotherwise increase cash on hand, other than except, in each such case, in the ordinary course of business, or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of the date hereofbusiness consistent with past practices;
(xxiim) settle knowingly permit the lapse through the failure to pay any Action, other than required fees of any settlement providing for the payment of monetary damages Intellectual Property Rights set forth in an amount not to exceed $2,000,000 which does not otherwise impair the operation Section 3.12(a) of the business of the Companies following the ClosingDisclosure Schedule; or
(xxiiin) agree to take any of the actions specified in Sections 5.01(a)(i)-(xxii)5.01(a)-(m) or announce any intention to do so, except as contemplated by this Agreement, Agreement or the Transition Services Agreement and the LLC Agreement. Subject to this Section 5.01, prior to the Closing, Parent the Seller shall exercise, consistent with the terms and conditions of this Agreement, complete control of and supervision over the Companies and their respective operations.
(b) The Purchaser, Merger LLC and Merger Co covenant and agree that, between the date of this Agreement and the Closing, neither Merger LLC nor Merger Co shall conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing.
Appears in 1 contract
Sources: Stock Purchase Agreement (HLTH Corp)
Conduct of Business Prior to the Closing. (a) Parent covenants and agrees that, except as described in Exhibit 5.01 or Except as otherwise expressly contemplated by this Agreementor necessary to effectuate the Transaction Agreements and except for matters identified in Section 5.01(a) of the Disclosure Schedule, including pursuant to the Reorganization, between from the date of this Agreement and through the Closing, Parent unless the Acquiror otherwise consents in advance (which consent shall not be unreasonably withheld or delayed), GE will, and will cause each Company the other Asset Sellers and the Business Subsidiaries to, (xa) to conduct its business the Business in the ordinary course in all material respectsconsistent with past practice, (yb) to use commercially reasonable efforts to preserve intact in all material respects their business organizations, to keep available the business organization services of executive officers and key employees of the Companies Business and to preserve the current significant business relationships with the customers of the Business, (c) maintain all of the insurance in effect as of the date hereof, and (zd) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, without the prior written consent not do any of the Purchaser (which consent will not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will notfollowing:
(i) (A) issue, sell or redeem any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company;
(ii) amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be;
(iii) grant or announce any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, in the ordinary course of business consistent with the past practices of such Company (which shall include increases due to promotions and normal periodic performance reviews and related compensation and benefit increases), as the case may be;
(iv) amend, adopt or enter into any employment or severance agreement with or applicable to any of the current or former employees, officers, consultants or directors of such Company, other than (A) an offer letter for at-will employment with no severance obligation, (B) as required by Law, (C) pursuant to any Plans, programs or agreements existing on the date of this Agreement, or (D) solely with respect to consultants and employees who are not employees of any Company with current annual salaries in excess of $125,000 or are not former employees of any Company with annual salaries as of their termination date in excess of $125,000, in the ordinary course of business consistent with the past practices of the business of the Companies;
(v) with respect to any employees of a Company, provide any additional benefits under a Plan or program existing on the date of this Agreement, or any such plans or programs which may be hereafter adopted, to the extent any such benefit is conditioned directly or indirectly on the consummation of one or more of the transactions contemplated by this Agreement (for the avoidance of doubt, this subsection (v) shall supersede any contrary provision in subsections (iii) or (iv));
(vi) except in the ordinary course of businessbusiness or to evidence Liens referred to in Sections 3.03 and 3.11(b), (A) incur grant any Indebtedness for borrowed money Lien (other than Indebtedness granting or suffering to Parent exist a Permitted Lien) on any Asset, Transferred Asset (whether tangible or to another Company, trade credit and accounts payable, and Indebtedness that will be repaid at or prior to the Closing) (B) extend the ordinary course accounts payable cycle (including with respect to the Accounts Payable and Accrued Medical Expenses that are specific to the Companies and recorded on Parent’s balance sheet) or accounts receivable cycle, (C) issue any debt securitiesintangible), or (D) assume the Equity Interests or guarantee or otherwise become responsible for any indebtedness of any Person (other than Indebtedness of another Company)the Supplier Membership Interests;
(viiii) make any acquisition acquire (by merger, consolidation, or acquisition of stock or assetsassets or otherwise) of any corporation, partnership or other business organization or Person or division thereof for consideration in excess of $2,000,000 in the aggregatedivision;
(viiiiii) except with respect to the Business or the Business Subsidiaries incur any Debt, issue any debt securities or assume, grant, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances (other than in the ordinary course of business);
(iv) issue or sell any additional shares of, create any Encumbrances on or other equity interests in, the Business Subsidiaries or any of their assetsSubsidiaries, tangible or intangiblesecurities convertible into or exchangeable for such shares or equity interests, or issue or grant any options, warrants, calls, subscription rights or other than rights of any kind to acquire additional shares, such other equity interests or such securities;
(Av) Permitted Encumbrancessell, (B) Encumbrances on assets transfer, lease, sublease or otherwise dispose of any Assets or Transferred Assets having an aggregate a value not in excess of $2,000,000, and (C) Encumbrances that will be released at or prior to the Closing;
(ix) sell, assign or transfer any of their tangible assets except 10,000 other than in the ordinary course of business and except for any such assets having an aggregate value of less than $2,000,000 and except for transfers to another Companyconsistent with past practice;
(xvi) in any respect, (A) grant any increase, or announce any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable to any Transferred Employee, including any increase or change pursuant to any Employee Plan or (B) establish or increase or promise to increase any benefits under any Employee Plan, in either case except as required by Law or any contract or involving ordinary increases consistent with the past practice of the Business, including any changes to pension or other benefits that are applicable to the employees of the Business and GE generally;
(vii) make any material change in any method of accounting or accounting practice or policy used by such Company, as the case may beBusiness in the preparation of its financial statements, other than such changes as are required by U.S. GAAP or by Lawother than changes that are applicable to GE generally;
(xiviii) willfully breach any Material Contract or knowingly do or knowingly omit to do any act that is reasonably expected to cause a breach of any Material Contract or result in a Material Adverse Effect;
(ix) enter into or terminate any Lease;
(xii) purchaseMaterial Contracts, sell or enter except for Material Contracts that are entered into any contract to purchase or sell any real property;
(xiii) incur or commit to any capital expenditures other than capital expenditures incurred or committed to in the ordinary course of business which do not exceed $6,000,000 in the aggregate and is in accordance consistent with the Companies’ capital expenditure plan;
(xiv) except in the ordinary course of business, allow the lapse of any Company’s rights of ownership past practice or use of any material Intellectual Property;
(xv) make or change any material Tax election (other than to effect the Reorganization), settle or compromise any material Tax Contest, change amend in any material respect any accounting method in respect of Taxesor terminate Material Contracts, enter into any closing agreement, settle or waive any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, to the extent that any of the foregoing actions have, individually or in the aggregate adversely affected the Tax liability of Master LLC, EBS LLC, the Companies, Parent or any of its Affiliates for taxable periods (or portions thereof) beginning after the Closing Date;
(xvi) engage in any “reportable transaction,” including any “listed transaction,” within the meaning of Section 6011 of the Code or any other applicable federal Law including any Internal Revenue Service ruling, procedure, notice or other pronouncement;
(xvii) agree or permit to terminate, cancel or lapse any Material Insurance Policy that names it as a beneficiary or a loss payee unless such policy is replaced with another policy with substantially similar coverage;
(xviii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Companies (other than pursuant to this Agreement); or (B) acquire or agree to acquire by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(xix) subject the Companies following the Closing to an agreement that prohibits or materially restricts the Companies from engaging in the business in which the Companies are currently engaged;
(xx) amend, modify, terminate or enter into any agreement or arrangement with any Related Person, including any Intercompany Agreement, or that would result in any Related Person having any interest in any contract, property, right or other asset of the Companies;
(xxi) enter into, amend, modify, or terminate a Material Contractrights thereunder, other than in the ordinary course of business, or enter into any contract that would be a Material Contract under Section 3.17(a)(iv) had it been entered into as of the date hereof;
(xxiix) settle make any Actioncapital expenditure, other than nor commit to make any settlement providing for capital expenditure, in excess of $10,000, except (A) pursuant to the payment of monetary damages Assumed Contract Rights disclosed in an amount not to exceed $2,000,000 which does not otherwise impair the operation Section 2.02(a)(iii) of the business Disclosure Schedule or (B) in accordance with the Business’ capital expenditure plan for 2004 as set forth in Section 5.01(a)(x) of the Companies following the ClosingDisclosure Schedule; or
(xxiiixi) agree enter into any legally binding commitment with respect to take any of the actions specified in Sections 5.01(a)(i)-(xxii)foregoing.
(b) Conduct of the Acquiror Prior to the Closing. The Acquiror agrees that from the date hereof until the Closing, except as set forth in Section 5.01(b) of the Acquiror Disclosure Schedule or as otherwise expressly contemplated by this Agreement, the Transition Services Agreement and Acquiror will not, without the LLC Agreement. Subject to this Section 5.01, prior written consent of GE (which consent shall not be unreasonably withheld or delayed):
(i) adopt or propose any change in its articles of incorporation or bylaws or equivalent documents which would be adverse to the Closinginterests of holders of Equity Shares of the Acquiror;
(ii) amend any material term of any outstanding security or class of securities of the Acquiror or any of its Subsidiaries in a manner which would be adverse to the interests of holders of Equity Shares of the Acquiror;
(iii) take any action which is reasonably likely to adversely affect the corporate existence of the Acquiror or any of its Subsidiaries;
(iv) declare, Parent shall exerciseset aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its Capital Stock (except for dividends paid to holders of shares of the Acquiror Common Stock in the ordinary course and consistent with past practice and except for dividends paid by any direct or indirect wholly owned Subsidiary of the terms Acquiror to the Acquiror or to any other direct or indirect wholly owned Subsidiary of the Acquiror in the ordinary course and conditions of this Agreement, complete control of and supervision over the Companies and their respective operations.consistent with past practice);
(bv) The Purchasertake any action that would, Merger LLC individually or in the aggregate, reasonably be expected to make any representation and Merger Co covenant and agree thatwarranty of the Acquiror hereunder untrue in any material respect at, between the date or as of this Agreement and any time prior to, the Closing, neither Merger LLC nor Merger Co shall conduct ; or enter into any business or activities or incur or guarantee legally binding commitment with respect to any of the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financing. Parent hereby covenants and agrees that, between the date of this Agreement and the Closing, Master LLC and EBS LLC shall not conduct any business or activities or incur or guarantee the payment or performance of any Liabilities, except as contemplated by the terms of this Agreement and the Debt Financingforegoing.
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