Covenants Relating to Conduct of Business. 5. 1Conduct of Business Prior to the Effective Time. During the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause its Subsidiaries to, conduct its business in the ordinary course in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organization, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5SECTION 5.01. 1Conduct Conduct of Business Prior to of the Effective TimeCompany. During Except as expressly contemplated by this Agreement or Section 5.01 of the Company Disclosure Schedule, required by applicable law or as may be agreed in writing by Parent (which consent shall not be unreasonably withheld), during the period from the date of this Agreement to the Effective Time or earlier termination of this AgreementTime, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedulewill conduct and will cause each of its Subsidiaries to conduct its operations according to its ordinary and usual course of business and consistent with past practice, will maintain and will cause each of its Subsidiaries to maintain insurance in such amounts and of such kinds comparable to that in effect on the date hereof (with insurers of substantially the same or better financial condition), required by law or as consented to in writing by Purchaser (or, in and the case Company will use and will cause each of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause its Subsidiaries to, conduct to use its business in the ordinary course in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organization, to keep available the services of its current officers and employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having business relationships with the Company and its advantageous business relationships, Subsidiaries. Without limiting the generality of the foregoing and (b) except as otherwise expressly required provided in or contemplated by this Agreement (including as set forth in or Section 5.01 of the Company Disclosure Schedule or required by applicable law, during the Purchaser Disclosure Scheduleperiod specified in the preceding sentence, without the prior written consent of Parent (which consent shall not be unreasonably withheld), the Company will not and will not permit any of its Subsidiaries to:
(a) issue, sell or grant options or rights (including any options or rights under the Employee Stock Purchase Plan) to purchase, pledge or receive, or authorize or propose the issuance, sale or grant of options or rights to purchase, pledge or receive any Company Securities or Subsidiary Securities, other than the issuance of Shares upon exercise of Existing Stock Options or the settlement of Stock Units or purchase of Shares under the Employee Stock Purchase Plan with respect to the Offering pending as of the date of this Agreement;
(b) acquire or redeem, directly or indirectly, or amend any Company Securities (including the Rights) or Subsidiary Securities;
(c) split, combine or reclassify its capital stock or declare, set aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of its capital stock (other than (i) cash dividends paid to the Company by its wholly-owned Subsidiaries with regard to their capital stock and (ii) regular quarterly cash dividends paid by the Company with respect to the Shares, not in excess of $ 0.09 per Share, with usual declaration, record and payment dates in accordance with past practice);
(d) (i) make or offer to make any acquisition, by means of a merger or otherwise, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities, in each case involving the payment or receipt of consideration of $10,000,000 or more (inclusive of assumed debt), except for purchases or sales of inventory made in the ordinary course of business and consistent with past practice or (ii) enter into a Material Contract or amend or extend any Material Contract or grant any release or relinquishment of any rights under any Material Contract (for purposes of this Section 5.01 (d) (ii) only, the term Material Contract shall include any contract or agreement that involves or is anticipated to involve aggregate payments of more than $ 7,500,000 in any year or more than $20,000,000 over the life of the contract);
(e) incur or assume any debt except for short-term debt incurred in the ordinary course of business consistent with past practice;
(f) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to the Company or wholly-owned Subsidiaries of the Company;
(g) make any capital expenditures other than in accordance with the Company’s annual budget as previously disclosed to Parent or expenditures that do not, individually or in the aggregate, exceed $5,000,000;
(h) make any loans, advances or capital contributions to, or investments in, any other Person (other than wholly-owned Subsidiaries of the Company);
(i) change any of the accounting methods, principles or practices used by it except as required by law U.S. GAAP;
(j) make any material Tax election or settle or compromise any material federal, state or local income Tax liability;
(k) propose or adopt any amendments to its Certificate of Incorporation or Bylaws (or similar documents);
(l) grant or pay any stock related performance or similar awards or bonuses other than any awards or bonuses payable for fiscal year 2003 in cash and in the ordinary course of business consistent with past practice pursuant to Company Plans in effect on the date hereof;
(m) forgive or extend any loans to employees, officers or directors or any of their respective Affiliates or Associates (as consented defined in Section 9.11);
(n) enter into or adopt any new, or amend any existing Plan, or grant any increases in the compensation or benefits to in writing by the officers, directors and employees (other party, each than normal increases to individuals who are not executive officers or directors of the Company in the ordinary course of business consistent with past practices and Purchaser shall notthat, in the aggregate, do not result in a material increase in benefits or compensation expense of the Company);
(o) terminate without “Cause” any of the Management Contract Parties or cause or knowingly allow any event or condition to occur or exist that would give any such Management Contract Party “Good Reason” to terminate his or her employment (as such terms are defined in the Change of Control Agreement in effect as of the date of this Agreement between the Company and shall cause their respective Subsidiaries not tosuch Management Contract Party);
(p) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under any Plan, knowingly except as required by the Company Plans currently in effect;
(q) except as required by applicable law or pursuant to any collective bargaining or other labor agreement currently in effect, enter into, amend, or extend any collective bargaining or other labor agreement;
(r) adopt, amend or terminate any Plan or any other bonus, severance, insurance, pension or other employee benefit plan or arrangement;
(s) settle or agree to settle any suit, action, claim, proceeding or investigation that is material to the Company (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby) or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise) other than the payment, discharge or satisfaction of liabilities to the extent reflected or reserved against in the financial statements as at September 27, 2003, payable with insurance or incurred in the ordinary course of business subsequent to that date;
(t) except as specifically permitted by Section 6.02, take, or agree to commit to take, or fail to take any action that would result or is reasonably be expected likely to adversely affect result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the parties to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(u) convene any regular or special meeting (or any adjournment thereof) of the ability to obtain any necessary approvals stockholders of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (Company other than Sections 5.2(bthe Company Stockholder Meeting; or
(v) and 5.2(f), agree in writing or otherwise to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2foregoing actions.
Appears in 1 contract
Sources: Merger Agreement (Dial Corp /New/)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as set forth in Section 5.2 of Business Prior to the Effective Time. During Seller Disclosure Schedules or as required by applicable Law or as otherwise required or expressly contemplated by the period terms of this Agreement or as expressly set forth on the Step Plan, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, and except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to Purchaser may otherwise consent in writing by Purchaser (or, in the case of clause (b), the Company) to (such consent not to be unreasonably withheld, conditioned or delayed), Seller shall (aand shall cause its Subsidiaries to)
(i) conduct the Business in all material respects in the ordinary course and consistent with past practice, (ii) use commercially reasonable efforts to preserve substantially intact the Business, (iii) use commercially reasonable efforts to maintain in effect all Transferred Permits and (iv) use commercially reasonable efforts to maintain satisfactory relationships with the customers, lenders, suppliers and others having material business relationships with the Business, and to not fail to maintain or renew insurance coverage in the ordinary course of business consistent with past practice; provided, that no action by Seller or any of its Subsidiaries specifically permitted by any other provision of this Section 5.2 shall be deemed a breach of this Section 5.2(a).
(b) Except as set forth in Section 5.2 of the Seller Disclosure Schedules or as required by applicable Law or as otherwise required or expressly contemplated by the terms of this Agreement or as expressly set forth on the Step Plan, and solely with respect to the Business, the Purchased Assets, the Assumed Liabilities or the Purchased Companies, Seller shall not, and shall cause each of its Subsidiaries not to, do any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed), it being understood and agreed that Seller’s obligations with respect to the following, to the extent pertaining to the Purchased Non-Consolidated Ventures, shall be limited solely to its obligation not to, and to cause its Subsidiaries not to, permit, authorize or consent to any of the following actions to be taken by any of the Purchased Non-Consolidated Ventures to the extent that Seller or such Subsidiary has the right to permit, authorize or consent to such action:
(i) except as required under any Benefit Plan or applicable Law or in connection with any action under a broad-based employee benefit plan or arrangement that applies uniformly to Business Employees and other similarly situated employees of Seller and its Affiliates and that does not result in a material increase in Liability to Purchaser, any Purchased Company or any of their respective Affiliates, (A) grant or announce any increase in the wages, salaries, compensation, bonuses, equity or equity-based awards or incentives payable to any current or former Business Employees (other than increases in annual base salary or wages to any Business Employee who is not a Key Employee in the ordinary course of business consistent with past practice), (B) adopt, establish, enter into, materially amend, or increase or promise to increase any benefits, other than in the ordinary course of business, under, a broad-based employee benefit plan or arrangement that applies substantially uniformly to Business Employees and other similarly situated employees of Seller and its Affiliates, (C) grant any severance, retention, change in control, transaction bonus or termination pay to, or enter into or amend any agreement or arrangement providing for the payment of such amounts with, any current or former Business Employee, (D) amend or enter into any Collective Bargaining Agreement, (E) hire any Key Employee or terminate the employment of any Key Employee (other than for cause), (F) transfer the employment or employment duties of any Business Employee to a business unit of Seller or any of its Affiliates that is not a Purchased Company, or (G) transfer the employment of any individual who is not a Business Employee to any Purchased Company or otherwise into the Business, other than to fill a vacancy (x) in existence as of the date hereof for a position that, prior to the date hereof, was devoted primarily to the Business, or (y) caused by a departure of a Business Employee after the date hereof, in each instance in the ordinary course of business consistent with past practice (other than a Business Employee who is a Key Employee), provided that, in each instance, such employee is given a substantially similar appointment and receives a commensurate base salary;
(ii) authorize or effect any amendment to or change the organizational documents of any Purchased Entity or authorize, effect or consent to any amendment of the organizational documents of any Purchased Venture;
(iii) (A) issue, authorize the issuance of, grant, sell, or dispose of any Purchased Entity Securities (other than or by to another Purchased Entity), (B) issue, authorize the issuance of, grant, sell, or dispose of any Purchased Venture Securities (other than to or by a Purchased Entity) or (C) split, combine or reclassify any Purchased Entity Securities or Purchased Venture Securities or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Purchased Entity Securities or any Purchased Venture Securities (other than pursuant to any binding contractual obligation in effect as of the date hereof), or (D) amend any term of any Purchased Entity Security or any Purchased Venture Security (in each case, whether by merger, consolidation or otherwise);
(iv) (A) except for transactions among the Seller Entities, Seller, the Purchased Entities and their respective Affiliates (including intercompany debt arrangements and intercompany pledge arrangements for cash management purposes, and transactions pursuant to the cash pooling arrangement with Bank Mendes ▇▇▇▇), incur any Indebtedness of any Purchased Subsidiary other than (x) borrowings under Seller’s and its Affiliates’ current revolving credit facilities in the ordinary course of business or (y) for amounts not exceeding $50,000,000, (B) except for transactions among the Seller Entities, Seller, the Purchased Entities and their respective Affiliates (provided that such transactions are consistent with Section 5.13), make any acquisition (by merger, consolidation, acquisition of stock or assets or otherwise) of any assets or businesses in excess of $10,000,000 individually or $25,000,000 in the aggregate other than acquisitions of supplies, inventory and similar assets in the ordinary course of business consistent with past practice or of assets pursuant to a definitive agreement in effect as of the date hereof, (C) except for transactions among the Seller Entities, Seller, the Purchased Entities and their respective Affiliates (provided that such transactions are consistent with Section 5.13), sell, pledge (other than any intercompany pledge arrangements described in clause (A)), transfer, abandon, let lapse, dispose of or encumber or create any Lien on any assets (excluding Owned Intellectual Property) or businesses in excess of $5,000,000 in the aggregate (including pursuant to Section 5.13(c)), other than (x) sales of inventory or disposals of obsolete inventory, in each case in the ordinary course of business consistent with past practice, or (y) sales or dispositions of businesses or assets pursuant to a definitive agreement in effect as of the date hereof, or (D) except for transactions among the Seller Entities, Seller, the Purchased Entities and their respective Affiliates (provided that such transactions described in clauses (B) or (C) above are consistent with Section 5.13), enter into any binding Contract with respect to any of the foregoing;
(v) enter into any Contract in relation to the Business for the purchase of real property in excess of $10,000,000 or lease (as lessee) of real property or exercise any option to extend or otherwise amend or modify any Transferred Leases providing for annual payments in excess of $2,500,000 individually or $10,000,000 in the aggregate;
(vi) settle or offer to settle (A) any Proceeding or material Action (in each case, other than with respect to Taxes) other than in the ordinary course of business consistent with past practice involving solely money damages that are paid in full prior to the Closing and not in excess of $5,000,000 individually or $10,000,000 in the aggregate or (B) any Action (other than with respect to Taxes) that relates to the transactions contemplated hereby;
(vii) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law or are consistent with the Transaction Accounting Principles;
(viii) (A) terminate or materially modify, amend or waive any right under any Material Contract, except in the ordinary course of business consistent with past practice with respect to any Contract (or series of related Contracts) involving payments to or by the Business of less than $10,000,000 in the aggregate; or (B) except in each case in the ordinary course of business consistent with past practice, cancel, compromise or settle any material claim, or intentionally waive or release any material right with respect to any Material Contract or the Business;
(ix) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or file for bankruptcy with respect to any Purchased Company;
(x) terminate, suspend, amend or modify in any material respect, any Business Permit, except (A) as required by applicable Law or a Governmental Entity or (B) in the ordinary course of business consistent with past practice;
(xi) make or change any material Tax election, change any Tax accounting period, adopt or change any Tax accounting method, settle or compromise any Proceeding or assessment with respect to material Taxes (other than in the ordinary course of business consistent with past practice involving solely Taxes that are paid in full prior to the Closing (but not in excess of $2,500,000 individually or $10,000,000 in the aggregate), if such settlement or compromise is not reasonably expected to adversely impact Purchaser or any of its Affiliates (including the Purchased Companies) in a Post-Closing Period), or consent to any extension or waiver of the limitations period applicable to any material Tax Claim or assessment, in each case, with respect to the Business, the Purchased Assets or any Purchased Company;
(xii) sell, license or sublicense (other than non-exclusive licenses and sublicenses in the ordinary course of business consistent with past practice), abandon or permit to lapse, transfer or dispose of, create or incur any Lien (other than any Permitted Lien) on, or otherwise fail to take any action necessary to maintain, enforce or protect any material Owned Intellectual Property;
(xiii) incur any capital expenditures or any Liabilities in respect thereof in excess of $10,000,000 on an annual basis or $25,000,000 in the aggregate payable by any Purchased Company, other than in accordance with the capital expenditure budget relating to the Business;
(xiv) except for transactions among the Seller Entities, Seller, the Purchased Entities and their respective Affiliates (including intercompany debt arrangements and intercompany pledge arrangements for cash management purposes, and transactions pursuant to the cash pooling arrangement with Bank Mendes ▇▇▇▇), make any loans, advances or capital contributions to, or investment in, any other Person with respect to the Business in excess of $5,000,000 individually or $10,000,000 in the aggregate, other than pursuant to any binding contractual obligation in effect as of the date hereof or advances to employees for business expenses in the ordinary course of business consistent with past practice; or
(xv) (A) enter into any Contract that limits or otherwise restricts in any material respect the conduct of the Business or any Purchased Company or any of their respective Affiliates or any successor thereto or that could, after the Closing Date, limit or restrict in any material respect the Business, any Purchased Company, Purchaser or any of their respective Affiliates, from engaging or competing in any line of business, in any location or with any Person, excluding any distribution Contract that provides for a third party to be the exclusive distributor of products supplied by the Business in a specified territory during the term of such Contract, or (B) enter into any Contract (or series of Contracts) that would have been a Material Contract (including any such series taken as a whole) if entered into prior to the date hereof, except with respect to any Contract (or series of Contracts) involving payments to or by the Business of less than $10,000,000 in the aggregate that is entered into in the ordinary course of business consistent with past practice; or
(xvi) authorize any of, or commit or agree to take, whether in writing or otherwise, or do any of, the foregoing actions.
(c) Anything to the contrary in this Agreement notwithstanding, the parties hereto acknowledge and agree that nothing in this Section 5.2 shall be deemed to (i) limit the transfer of Excluded Assets prior to the Closing so long as such transfer would not create any Assumed Liability that would not have existed absent such transfer or (ii) affect, restrict or limit the ability of Seller, the other Seller Entities or their respective Affiliates to engage in certain harmonization and integration activities to be implemented in connection with the merger between ▇▇▇▇▇▇▇ Controls, Inc. and Tyco International plc (including harmonization of cash management systems and other treasury functions; employee benefit plans and other employee related matters; and corporate policies and procedures) so long as such activities are not adverse to the Business in any material respect and would not create any Assumed Liability that would not have existed absent such action.
(d) Anything to the contrary in this Agreement notwithstanding, nothing in this Section 5.2 shall prohibit or otherwise restrict in any way the operation of the business of Seller, the other Seller Entities or their respective Affiliates, except solely with respect to the conduct of the Business by Seller and its Subsidiaries, the Purchased Assets, the Assumed Liabilities and the Purchased Companies.
(e) As soon as reasonably practicable after the date hereof, each of Seller and Purchaser shall, and shall cause its Subsidiaries respective Affiliates to, conduct its business in the ordinary course in all material respects and use commercially reasonable best efforts to maintain and preserve intact its business organization, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult negotiate in good faith with the other party and enter into prior to the extent such actions would otherwise require consent Closing long-term leases, subleases, licenses or other suitable arrangements reasonably acceptable to Purchaser and Seller for the properties described in Section 5.2(e) of the other party under Seller Disclosure Schedules on arms’-length market terms.
(f) Promptly after the date of this Agreement, Seller shall use reasonable best efforts to cause the transactions described in Item 2 of Section 5.1 2.4(a)(iii)(B) of the Seller Disclosure Schedules to occur on or Section 5.2prior to March 31, 2019. Seller shall use reasonable best efforts to keep Purchaser reasonably apprised of the status of such efforts described in the preceding sentence and any material discussions with or material correspondence or communications to or from the third parties involved in such transactions.
(g) Prior to the Closing, Seller shall use reasonable best efforts to complete the establishment (including systems, processes and procedures) of, and recruitment of substantially all personnel necessary to conduct, the stand-alone treasury, tax, internal audit, finance and reporting functions for the Business and the Purchased Subsidiaries.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (Johnson Controls International PLC)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as set forth in Section 5.2 of Business Prior to the Effective Time. During Seller Disclosure Schedules or as required by applicable Law or as otherwise contemplated or required by the period terms of this Agreement, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, and except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), Seller shall (a) Company shall, and shall cause its Subsidiaries controlled Affiliates to, ) use reasonable best efforts to (i) conduct its business the Business in all material respects in the ordinary course in all material respects consistent with past practice and use commercially reasonable efforts (ii) preserve substantially intact the Business, including relationships with suppliers, customers, distributors, employees, consultants and Governmental Entities with respect to maintain and preserve intact the Business; provided, however, that no action by Seller or its business organization, the services controlled Affiliates expressly permitted under Section 5.2(b) shall be deemed a breach of its employees and its advantageous business relationships, and this Section 5.2(a) unless such action would constitute a breach of such other provision.
(b) except as expressly required by this Agreement (including Except as set forth in Section 5.2 of the Company Seller Disclosure Schedule Schedules or the Purchaser Disclosure Schedule), as required by law applicable Law (in which case Seller shall give Purchaser prior written notice of such action required to be taken by applicable Law as soon as reasonably practicable) or as consented to in writing otherwise contemplated or required by the other partyterms of this Agreement, each of and solely with respect to the Company and Purchaser Business, Seller shall not, and shall cause their respective Subsidiaries each Seller Entity and each Target Entity not to, knowingly take do any action that would reasonably of the following, from the date of this Agreement to the Closing, without the prior consent of Purchaser (such consent not to be expected to adversely affect unreasonably withheld, conditioned or materially delay the ability to obtain delayed):
(i) except as may be required under any necessary approvals Collective Bargaining Agreement (or in connection with renewals of any Regulatory Agency Collective Bargaining Agreement) or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth any Benefit Plan, in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party each case solely to the extent such actions Collective Bargaining Agreement or Benefit Plan is disclosed in the Seller Disclosure Schedules, (A) grant to any Business Employee any increase in compensation or benefits, other than in the ordinary course of business consistent with past practice, (B) enter into any new bonus, incentive, employee benefits, severance or termination agreement or arrangement with any Business Employee, (C) adopt, enter into or amend any Transferred Benefit Plan (except for amendments that do not increase the annual cost of such Transferred Benefit Plan for Purchaser or its Affiliates by more than a de minimis amount), (D) amend the Transferred Business Independent Contractor Agreement, other than in the ordinary course of business consistent with past practice, (E) hire any new employees who would be Business Employees (except to replace Business Employees who are not Material Employees who terminate employment with the Seller Entities after the date of this Agreement), or (F) terminate the employment of any Business Employee (except for cause, as determined by the Seller in good faith and in accordance with past practice and applicable Law);
(ii) enter into or amend any Collective Bargaining Agreement or, through negotiation or otherwise, make any binding commitment to any labor organization with respect to any Business Employees, except as required by applicable Law or in connection with renewals of Collective Bargaining Agreements that (A) are consistent with past practice or (B) do not increase aggregate costs to the Business by an amount materially greater than prevailing market practice in the applicable jurisdiction;
(iii) authorize or effect any amendment to or change the Organizational Documents of any Target Entity;
(iv) issue or authorize the issuance of any equity interests or grant any options, warrants, or other rights to purchase or obtain any of its equity securities or issue, sell or otherwise require consent dispose of any of its equity securities or redeem, repurchase or otherwise acquire any securities of any Target Entity (other than to another Target Entity);
(v) except for transactions among the Seller Entities, Seller, the Target Entities and their respective Affiliates in the ordinary course, not (A) incur any Indebtedness other than in the ordinary course of business or for amounts not exceeding $2,500,000 in the aggregate, (B) make any acquisition of any assets or businesses in excess of $2,500,000 individually or $5,000,000 in the aggregate, other than acquisitions of assets in the ordinary course or any acquisitions of inventory, raw materials or similar assets in good faith, or (C) sell, pledge, dispose of or encumber any material assets or businesses other than (I) the granting of Liens to the extent required by the Seller Credit Agreement, (II) disposition of obsolete equipment in the ordinary course of business, (III) sales of immaterial assets in the ordinary course of business or (IV) sales of inventory in good faith;
(vi) enter into any Contract in relation to the Business for the purchase of real property or lease (as lessee) of real property or exercise any option to extend any leases related to the Transferred Leased Property except for extensions of any such leases that terminate in accordance with their terms prior to, or within one (1) year after, the Closing, so long as such extensions provide for annual rental payments of no more than 110% of the current annual rent with respect to such Lease;
(vii) settle any Proceedings other party than in the ordinary course of business consistent with past practice involving solely money damages of not more than $1,000,000 in the aggregate;
(viii) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law or are consistent with the Working Capital Accounting Principles or otherwise apply generally to Seller;
(ix) except in each case (i) as expressly set forth in the Pre-Closing Restructuring Plan or (ii) with respect to any Combined Tax Return as would not materially and adversely affect the Target Entities, the Purchased Assets, the Assumed Liabilities or the Business, (A) make, change or revoke any material Tax election, (B) settle or compromise any material Tax liability for an amount materially in excess of the amount reserved or accrued on the Business Financial Information, (C) change any annual Tax accounting period, (D) adopt or change any material method of Tax accounting, (E) file any amended income or other material Tax Return, (F) enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement relating to any material Tax or (G) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(x) except in each case in the ordinary course of business, (A) materially modify, amend or waive any right under any Material Contract, (B) enter into a new Contract that would have been a Material Contract if in effect on the date hereof; (C) cancel, compromise or settle any material claim, or intentionally waive or release any material right with respect to any Material Contract; or (D) terminate any Material Contract, other than any termination in accordance with the terms of any Material Contract that occurs without any action by Seller or its Affiliates;
(xi) remove, transfer or relocate any material Tangible Personal Property (or any interest therein) included in the Purchased Assets that is currently located at, on or in the Owned Real Property or the Transferred Leased Property, other than sales of Inventory in the ordinary course of business or as otherwise permitted by clause (v) of this Section 5.1 5.2(b);
(xii) accelerate, delay or alter in any material respect practices and policies relating to the rate of collection of accounts receivable or payment of accounts payable; or
(xiii) authorize any of, or commit or agree to take, whether in writing or otherwise, or do any of, the foregoing actions.
(c) Anything to the contrary in this Agreement notwithstanding, the Parties acknowledge and agree that nothing in this Section 5.25.2 shall be deemed to limit the transfer of any Excluded Assets prior to or at the Closing, or any action taken or to be taken in accordance with or pursuant to the Pre-Closing Restructuring.
(d) Anything to the contrary in this Agreement notwithstanding, nothing in this Section 5.2 shall prohibit or otherwise restrict in any way the operation of the Retained Seller Business by Seller, the other Seller Entities or their respective Affiliates.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (GCP Applied Technologies Inc.)
Covenants Relating to Conduct of Business. 5Section 6.1 [Reserved]
Section 6.2 Conduct of Union Drilling's Business Pending the Closing. 1Conduct Except as set forth in Section 6.2 of Business Prior to the Effective Time. During Disclosure Schedule, Union Drilling covenants and agrees that, during the period from the date hereof to the Closing (except as otherwise contemplated by the terms of this Agreement Agreement), unless the Investors shall otherwise agree in writing in advance, the businesses of Union Drilling and its Subsidiaries shall be conducted only in the ordinary course of business in substantially the same manner as heretofore conducted and in compliance with applicable laws, and Union Drilling and its Subsidiaries shall each use all commercially reasonable efforts consistent with the foregoing to preserve substantially intact the Effective Time business organization of Union Drilling and its Subsidiaries, to keep available the services of the present officers and employees of Union Drilling and its Subsidiaries (subject to prudent management of workforce needs and ongoing programs currently in force), to preserve the present relationships of Union Drilling and its Subsidiaries with customers, suppliers, distributors and other Persons with which Union Drilling or earlier termination any of the Subsidiaries has significant business relations, to maintain and keep its material assets in good repair and condition (subject to ordinary wear and tear), and to maintain supplies and inventories in quantities consistent with past practice. By way of amplification and not limitation, neither Union Drilling nor any of its Subsidiaries shall, except as set forth in Section 6.2 of the Disclosure Schedule and as otherwise contemplated by the terms of this Agreement, between the date of this Agreement and the Closing, directly or indirectly do, or propose or commit to do, any of the following without the prior written consent of the Investors or except as expressly contemplated herein:
(a) (i) amend its Articles of Incorporation or permitted by Bylaws or the charter or bylaws of any of its Subsidiaries; (ii) split, combine or reclassify the outstanding shares of its capital stock or declare, set aside or pay any dividend payable in cash; (ii) split, combine or reclassify the outstanding shares of its capital stock or declare, set aside or pay any dividend payable in cash, stock or property or make any other distribution with respect to such shares of capital stock or other ownership interests; (iii) redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or other ownership interests; or (iv) sell or pledge any stock of any of its Subsidiaries; and
(b) take any action which would or is reasonably likely to result in: (i) a material breach of any provision of this Agreement Agreement, (including as ii) any of the representations and warranties of Union Drilling set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause its Subsidiaries to, conduct its business in the ordinary course in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organization, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement becoming untrue in any material respect, or (including as iii) any of the conditions set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause their respective Subsidiaries Article VIII not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2being satisfied.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except for matters set forth in Section 6.1(a) of Business Prior to the Effective Time. During Disclosure Schedules or otherwise expressly permitted by the period terms of this Agreement, from the date of this Agreement to the Effective Time or earlier termination Closing, Seller shall cause the businesses of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth Company and its Subsidiary to be conducted in the Company Disclosure Schedule)usual, required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, regular and shall cause its Subsidiaries to, conduct its business in the ordinary course in all material respects and substantially the same manner as previously conducted and, to the extent consistent therewith, use commercially reasonable best efforts to maintain and preserve keep intact its business organizationtheir respective businesses, keep available the services of its their current employees and preserve their relationships with customers, suppliers, licensors, licensees, distributors and others with whom they deal to the end that their respective businesses shall be unimpaired at the Closing; provided that Seller shall not be obligated to, directly or indirectly, provide any funds to Company or its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser Subsidiary. Seller shall not, and shall cause their respective Subsidiaries not permit Company or its Subsidiary to, knowingly take any action that would, or that could reasonably be expected to, result in any of the conditions set forth in Article 9 not being satisfied. In addition (and without limiting the generality of the foregoing), except as set forth in Section 6.1(a) of the Disclosure Schedules or otherwise expressly permitted or required by the terms of this Agreement, Seller shall not permit Company or its Subsidiary to:
(i) amend its articles of incorporation or bylaws;
(ii) redeem or otherwise acquire any shares of its capital stock or issue any capital stock or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of capital stock;
(iii) adopt or amend in any material respect any Employee Plan (or any plan that would be an Employee Plan if adopted) or enter into, adopt, extend (beyond the Closing Date), renew or amend any collective bargaining agreement or other Contract with any labor organization, union or association, except in each case as required by applicable Law after providing written notice to Purchaser;
(iv) grant to any director, executive officer or employee any increase in compensation or benefits, except (A) as may be required under existing agreements, (B) for any increases for which Seller shall be solely obligated and (C) for increases to employees (other than officers) in the ordinary course of business consistent with past practice;
(v) hire, or terminate the employment of, any employees except in the ordinary course of business consistent with past practice;
(vi) incur or assume any liabilities, obligations or Indebtedness or Guarantee any such liabilities, obligations or Indebtedness, other than in the ordinary course of business consistent with past practice;
(vii) other than in the ordinary course of business consistent with past practice, permit, allow or suffer any of its assets to become subjected to any Lien or Encumbrance of any nature whatsoever;
(viii) cancel any material Indebtedness (individually or in the aggregate) or waive any claims or rights of substantial value;
(ix) pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, Seller or any of its Affiliates, except for (A) transactions among Company and its Subsidiary, (B) dividends and distributions permitted under clause (ii) above and (C) intercompany transactions in the ordinary course of business consistent with past practice;
(x) settle or compromise (A) any pending or threatened Proceeding or claim related to alleged health effects from use of tobacco products or the regulation of the production, sale or distribution of tobacco products or (B) any other pending or threatened Proceeding or claim (1) in which the amount involved is greater than U.S.$250,000, (2) that is material to Company and its Subsidiary or (3) that relates to the Transactions;
(xi) make any change in any method of accounting or accounting practice or policy other than those required by GAAP;
(xii) make, change or rescind any material Tax election not required by Law, file any amended Tax Return not required by Law, enter into any closing agreement relating to Taxes, waive or extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business), or settle or compromise any material Tax liability other than in the ordinary course of business consistent with past practice, or surrender any right or claim for a Tax refund;
(xiii) acquire by merging or consolidating with, or by purchasing 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 or otherwise acquire any assets (other than inventory) that are material;
(xiv) make or incur any capital expenditure that is not currently approved in writing or budgeted and that, individually, is in excess of U.S.$500,000 or make or incur any such expenditures that, in the aggregate, are in excess of U.S.$1,000,000;
(xv) sell, lease, license or otherwise dispose of any of its material assets, except inventory and obsolete or excess equipment sold in the ordinary course of business consistent with past practice;
(xvi) enter into any lease of real property, except any renewals of existing property in the ordinary course of business consistent with past practice;
(xvii) modify, amend, terminate, renew or permit the lapse of any lease of, or reciprocal easement agreement, operating agreement or other material agreement relating to, Owned Real Property or Leased Real Property (except modifications or amendments associated with renewals of existing leases); or
(xviii) authorize any of, or commit or agree, whether in writing or otherwise, to take or to do any of the foregoing actions.
(b) Seller shall promptly advise Purchaser in writing of the occurrence of any matter or event that has had or could reasonably be expected to adversely affect or materially delay have a Material Adverse Effect.
(c) In connection with the ability to obtain any necessary approvals continuing operation of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform businesses of Company and its respective covenants and agreements under Subsidiary between the date of this Agreement or and the Closing, Seller shall use its reasonable best efforts to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith on a regular and frequent basis with the other party representatives of Purchaser to report all material operational developments and the general status of ongoing operations pursuant to procedures requested by Purchaser or such representatives. Seller acknowledges that any such consultation shall not constitute a waiver by Purchaser of any rights it may have under this Agreement and that Purchaser shall not have any liability or responsibility for any actions of Seller or any of its officers or directors with respect to matters that are the subject of such consultations.
(d) Seller shall keep, or cause to be kept, in full force and effect through the close of business on the Closing Date, all insurance policies listed in Section 4.15 of the Disclosure Schedules. As of the Closing, Seller shall assign to Purchaser any and all assignable rights that Seller may have under such insurance policies covering claims relating to the extent such actions would otherwise require consent of period on or prior to the other party under this Section 5.1 or Section 5.2Closing Date.
Appears in 1 contract
Sources: Stock Purchase Agreement (Imperial Tobacco Group PLC)
Covenants Relating to Conduct of Business. 5Section 5.1. 1Conduct Conduct of Business Prior to by the Effective TimeCompany Pending the Merger. During Except as expressly permitted by clauses (i) through (xvii) of this Section 5.1, during the period from the date of this Agreement through the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent therewith, use reasonable best efforts to preserve intact its current business organizations, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time or earlier termination Time. Without limiting the generality of this Agreementthe foregoing, and except as otherwise expressly contemplated or permitted by this Agreement (including or as set forth in the Company Disclosure ScheduleLetter (with specific reference to the applicable subsection below but with it being agreed that a reference to one subsection shall be deemed to be a reference to other subsections but only if the level of particularity or manner of disclosure of the fact or item expressly disclosed in one subsection of the Company Letter permits a reasonable person to find such disclosure relevant to another subsection), the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Parent (which in any event shall not be unreasonably withheld):
(i) (A) other than dividends paid by wholly-owned Subsidiaries, dividends which holders of Preferred Shares are entitled to receive under the Company Charter and payments with respect to the Preferred Shares required to be made under the Deposit Agreement, declare, set aside or pay any dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its capital stock, or otherwise make any payments to its stockholders in their capacity as such, (B) other than in the case of any Subsidiary, split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company (other than Preferred Shares upon the conversion thereof and other than repurchases of Common Shares pursuant to agreements with holders of options who, in accordance with the terms thereof, exercised such options prior to the normal vesting date subject to a repurchase option in favor of the Company) or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge, dispose of or otherwise encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into, or any rights, warrants or options (including options under the Company Stock Option Plans) to acquire any such shares, voting securities, equity equivalent or convertible securities, other than (A) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their current terms, (B) the issuance of shares of Company Common Stock upon exercise of the Hiway Warrants or conversion of Series A Preferred Stock, and (C) the grant of purchase rights or issuance of Shares pursuant to the Company Stock Purchase Plan in accordance with Section 6.5;
(iii) amend its charter or by-laws;
(iv) acquire or agree to acquire by law merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, limited liability company, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets, other than acquisitions in which the aggregate amount of consideration to be paid in connection with an individual acquisition does not exceed $5 million, and provided that, if the aggregate consideration to be paid in connection with an individual acquisition would exceed $5 million, the Company will submit to Parent, through its representative on the Company's Board of Directors, materials describing the proposed acquisition in the form provided generally to the Company's Board of Directors for consideration of the acquisition and Parent shall respond with its decision with respect to the approval of the acquisition within the same time period provided to the Board for its consideration and approval;
(v) except as consented set forth in Section 5.1(v) of the Company Letter, sell, lease or otherwise dispose of, or agree to sell, lease or otherwise dispose of, any of its assets with a fair market value in writing by Purchaser excess of $500,000, other than sales of inventory, products and services that are in the ordinary course of business consistent with past practice and other than the sale or disposition of property or equipment that has become worn out, obsolete or damaged or otherwise unsuitable for use in connection with the business of the Company or its Subsidiaries;
(orvi) incur any indebtedness for borrowed money, guarantee any such indebtedness or make any loans, advances or capital contributions to, or other investments in, any other person, other than (A) in the ordinary course of business consistent with past practices and, in the case of clause (b)indebtedness and guarantees, the Company) (such consent in an amount not to be unreasonably withheld, conditioned or delayed)exceed $2.5 million, (aB) indebtedness, loans, advances, capital contributions and investments between the Company shalland any of its wholly-owned Subsidiaries or between any of such wholly-owned Subsidiaries, and shall cause its Subsidiaries to, conduct its business in each case in the ordinary course of business consistent with past practices and (C) investments in any other person which, if such investments were treated as an acquisition, would be permitted under clause (iv) of this Section 5.1;
(vii) alter in any material respect (through merger, liquidation, reorganization, restructuring or in any other fashion) the corporate structure or ownership of the Company or any Subsidiary;
(viii) except as provided in Section 5.1(viii) of the Company Letter and Section 6.5, enter into or adopt any, or amend any existing, severance plan, agreement or arrangement or enter into or amend any Company Benefit Plan or employment or, except in the ordinary course of business consistent with past practice, consulting agreement;
(ix) except as provided in Section 5.1(ix) of the Company Letter and Section 6.5, increase the compensation payable or to become payable to its directors, officers or employees (except for increases in the ordinary course of business consistent with past practice in salaries or wages, other than the salaries and wages of the officers of the Company identified in Section 5.1(ix) of the Company Letter) or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director or officer of the Company or any of its Subsidiaries, or establish, adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or take action to enhance in any material respect or accelerate any rights or benefits under, any labor, collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(x) knowingly violate or knowingly fail to perform any material obligation or duty imposed upon it or any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than actions required to be taken by GAAP or applicable law);
(xii) except as required by applicable law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(xiii) settle or compromise any Tax liability in excess of $500,000;
(xiv) except as set forth in Section 5.1(xiv) of the Company Letter, settle or compromise any claims or litigation in excess of $1 million or commence any litigation or proceedings;
(xv) except for matters that have been previously authorized or approved by the Board of Directors of the Company, either expressly or as part of the overall operating plan and capital and operating budgets for the Company (including the data center expansion project previously approved by the Board and publicly announced) and for any individual agreements or contracts consistent with such approved budgets, (1) enter into or amend any agreement or contract having a term in excess of 12 months and which is not terminable by the Company or a Subsidiary without penalty or premium of less than $500,000 by notice of 180 days or less, but not including individual customer agreements, reseller agreements, or "Powered by Verio" or similar distribution agreements or other standard supplier agreements entered into in the ordinary course of business consistent with past practice; (2) enter into or amend any agreement or contract which, in the case of any individual agreement or contract or series of related agreements or contracts, involves or is expected to involve payments of $3 million or more by the Company and its Subsidiaries during the term thereof (provided that in the case of agreements or contracts with any customer, the margins anticipated from any such agreement or contract shall be consistent in all material respects and use commercially reasonable efforts with historical margins); (3) enter into or amend any agreement or contract material to maintain and preserve intact its business organization, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser shall notits Subsidiaries, taken as a whole, and shall cause their respective Subsidiaries not tootherwise permitted by clause (1) or (2) above; or (4) purchase any real property, knowingly take or make or agree to make any action that would reasonably be expected to adversely affect new capital expenditure or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 expenditures (other than Sections 5.2(bthe purchase of real property) and 5.2(fwhich in the aggregate are in excess of $1 million;
(xvi) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with their terms or as permitted by this Section 5.1; or
(xvii) authorize, recommend, propose or announce an intention to which this sentence shall not apply), a party and its Subsidiaries may take do any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 foregoing, or Section 5.2enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Nippon Telegraph & Telephone Corp)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except for matters (x) set forth in Schedule 5.01(a), (y) expressly agreed to by Purchaser or (z) otherwise contemplated by the terms of Business Prior to the Effective Time. During the period this Agreement, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing Date, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and Seller shall cause its Subsidiaries to, the Acquired Companies and their respective subsidiaries to conduct its business their respective businesses in the ordinary course in all material respects and a manner consistent with past practice and, to the extent consistent therewith, use commercially reasonable efforts to maintain preserve their material business relationships with customers, suppliers, distributors and preserve intact its business organizationothers with whom they deal in the ordinary course of business. In addition, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in Schedule 5.01(a) or otherwise contemplated by the terms of this Agreement, Seller shall not cause any of the Acquired Companies or any of their respective subsidiaries to do any of the following without the prior written consent of Purchaser (which consent shall not be unreasonably withheld or delayed):
(i) amend its articles of association or other comparable Organizational Documents;
(ii) declare or pay any dividend or make any other distribution to its shareholders whether or not upon or in respect of any shares of its capital stock; provided, however, that (A) at any time prior to the close of business on the Closing Date, Seller will be allowed to withdraw or cause to be withdrawn any cash balances of the Acquired Companies and their respective subsidiaries, (B) dividends and distributions may continue to be made by the subsidiaries of each Acquired Company Disclosure Schedule to such Acquired Company or to other wholly owned subsidiaries of such Acquired Company and (C) dividends and distributions of cash and cash equivalents may continue to be made by (x) the Purchaser Disclosure ScheduleAcquired Companies to Seller and (y) Widia India to its shareholders;
(iii) redeem or otherwise acquire any shares of its capital stock or issue any capital stock (except upon the exercise of outstanding options) or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of capital stock;
(iv) adopt or amend in any material respect any Acquired Companies Benefit Plan maintained or contributed to, or required to be maintained or contributed to, by an Acquired Company or a subsidiary of an Acquired Company in respect of any Affected Employee (as defined in Section 5.06(a)) or Former Employee (as defined in Section 5.06(d)), except as required by law Applicable Law;
(v) grant to any executive officer or other key employee of an Acquired Company or a subsidiary of an Acquired Company any increase in compensation or benefits, except in the ordinary course of business consistent with past practice or as consented to may be required under existing agreements and except for any increases or bonuses for which Seller shall be solely obligated;
(vi) incur or assume any liabilities, obligations or indebtedness for borrowed money or guarantee any such liabilities, obligations or indebtedness, other than in writing by the other party, each ordinary course of business consistent with past practice;
(vii) subject any of the assets owned by an Acquired Company or a subsidiary of an Acquired Company as of the date of this Agreement to any Lien of any nature whatsoever that would have been required to be set forth in Schedule 2.06 or 2.07 if existing on the date of this Agreement;
(viii) waive any claims or rights of material value;
(ix) make any change in any method of accounting or accounting practice or policy other than those required or permitted by GAAP or required by Applicable Law;
(x) acquire by merging or consolidating with, or by purchasing all 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 or otherwise acquire any assets (other than inventory) that are material to the Acquired Companies and Purchaser shall not, and shall cause their respective Subsidiaries subsidiaries, taken as a whole;
(xi) make or incur any capital expenditure, other than capital expenditures (A) set forth in Schedule 5.01(a)(xi) or (B) which, individually, is not toin excess of €50,000;
(xii) sell, knowingly take lease, license or otherwise dispose of any action asset that is material to the Acquired Companies and their respective subsidiaries, taken as a whole, except (A) inventory and obsolete or excess equipment or machinery sold or disposed of in the ordinary course of business, (B) leases set forth in Schedule 5.01(a)(xii) and (C) sales, leases, licenses or other disposals of assets to an Acquired Company or a subsidiary of an Acquired Company;
(xiii) enter into any lease, or renew any existing lease, of real property, except (A) any lease or renewal of lease set forth in Schedule 5.01(a)(xiii) and (B) any lease, or renewal of lease, which, individually, provides for rental payments not in excess of €50,000 for the term of such lease or renewal;
(xiv) (A) terminate the Receivables Agreement dated as of December 27, 2001 (the "Receivables Agreement") among Widia India, ICICI Bank of India and HDFC Bank or (B) amend or otherwise modify the Receivables Agreement in a way that would reasonably be expected to adversely affect have a material adverse effect on the financial condition of Widia India;
(xv) settle or materially delay compromise any suit, other than the ability to obtain any necessary approvals of any Regulatory Agency WIS Litigation (as defined in Schedule 2.12) in accordance with the Settlement Agreement (as defined below), or other Governmental Entity required for litigation matter or matter constituting the transactions contemplated hereby subject matter of an arbitration proceeding on terms which would require Purchaser to take any action, assume any liability or to perform its respective covenants and agreements under this forego any right;
(xvi) terminate, amend or otherwise modify any of the Separation Agreements;
(xvii) terminate, amend or otherwise modify the Settlement Agreement or the Share Purchase Agreement (as defined below), in each case, on terms which would require Purchaser to consummate take any action, assume any liability or forego any right; or
(xviii) agree, whether in writing or otherwise, to do any of the transactions contemplated hereby on a timely basis. Notwithstanding anything foregoing.
(b) Parent and Seller shall keep all insurance policies currently maintained by Seller or Parent, as applicable, with respect to the contrary set forth Acquired Companies and their respective subsidiaries and their respective assets and properties (the "Group Insurance Policies"), or suitable replacements therefor, in Section 5.1 or Section 5.2 full force and effect through the close of business on the Closing Date; it being understood that any and all Group Insurance Policies are owned and maintained by Parent, Seller and their respective affiliates (other than Sections 5.2(bthe Acquired Companies and their respective subsidiaries) and 5.2(fnone of Purchaser, the Acquired Companies or their respective subsidiaries will have any rights under such insurance policies from and after the Closing Date. Seller shall cause to be kept all insurance policies currently maintained by the Acquired Companies and their respective subsidiaries with respect to themselves and their respective assets and properties (the "Acquired Companies Insurance Policies" and, together with the Group Insurance Policies, the "Insurance Policies"), to which this sentence shall not apply)or suitable replacements therefor, a party in full force and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response effect through the close of business on the Closing Date. Purchaser acknowledges that, subsequent to the Pandemic Closing, neither Seller nor Parent shall have any responsibility to maintain, or the Pandemic Measures; providedcause to be maintained, that such party shall provide prior notice to in full force and consult in good faith with the other party to the extent such actions would otherwise require consent effect any of the other party under this Section 5.1 Insurance Policies or Section 5.2obtain any suitable replacement therefor covering any loss, liability, claim, damage or expense of the Acquired Companies or any of their respective subsidiaries.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct Section 7.1 Conduct of Business Prior by the Company Pending the Merger. Except as (v) required by applicable Law or by a Governmental Entity, (w) expressly permitted or required by this Agreement, (x) for any action expressly required by the Marketed Portfolio Purchase and Sale Agreement (including the retirement of any Indebtedness in connection therewith), (y) otherwise set forth in the Company Letter or (z) consented to the Effective Time. During by Parent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), during the period from the date of this Agreement to until the Effective Time (or such earlier termination of this Agreement, except as expressly contemplated or permitted by date on which this Agreement (including as set forth may be terminated in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (baccordance with its terms), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause each of its Subsidiaries to, conduct in all material respects carry on its business in the ordinary course consistent with past practice and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts to preserve substantially intact their business organizations and Intellectual Property and maintain in all material respects respects, existing relations and use commercially reasonable efforts to maintain goodwill with tenants, management companies, customers, suppliers, officers and preserve intact its employees and others having business organizationdealings with them and, except as provided in clauses (v)-(z) above, during such period, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause their respective not permit any of its Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay without the ability to obtain any necessary approvals prior written consent of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 Parent (other than Sections 5.2(b) and 5.2(f), to which this sentence consent shall not apply)be unreasonably withheld, delayed or conditioned; provided, that, for purposes of this Section 7.1, a party and failure of Parent to respond to a request for consent from the Company within five (5) Business Days from the receipt of such request shall be deemed to constitute consent to such request):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary stock or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party equity interests (except to the extent necessary to maintain the Company’s status as a REIT or to eliminate any Taxes otherwise payable (provided that any such actions would otherwise dividend or distribution shall require consent prior consultation with Parent) and dividends paid by any direct or indirect Subsidiary to the Company or to any other direct or indirect Subsidiary of the other party under this Section 5.1 or Section 5.2.Company in the ordinary course of business consistent with past practice) or
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as set forth in Section 6.1 of Business Prior the Georgia Disclosure Schedules or as required by applicable Law, or as otherwise expressly required or permitted by the terms of this Agreement (including Section 6.10), or to the Effective Time. During extent related solely to the period Excluded Assets, the Retained Liabilities or the Retained Businesses, from the date of this Agreement to the Effective Time or earlier termination Closing, and except with the prior written consent of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) Florida (such consent not to be unreasonably withheld, conditioned or delayed), Georgia shall, and shall cause each other Georgia Entity and the Purchased Entity (aand any Subsidiary thereof) Company shallto, conduct the Business in all material respects in the ordinary course and use commercially reasonable efforts to preserve intact and maintain its current business organization and operations and relationships with customers and suppliers of, or others having material business dealings with, the Business; provided that no action by Georgia or its Subsidiaries that is specifically addressed by Section 6.1(b) shall be deemed a breach of this Section 6.1(a) unless such action would constitute a breach of Section 6.1(b).
(b) Except as set forth in Section 6.1 of the Georgia Disclosure Schedules or as required by applicable Law, or as otherwise expressly required or permitted by the terms of this Agreement (including Section 6.4, Section 6.10 or Article IX), or to the extent related solely to the Excluded Assets or Retained Liabilities, from the date of this Agreement to the Closing, Georgia shall not, and shall cause its Subsidiaries and the Purchased Entity (and each Subsidiary thereof) not to, conduct do any of the following with respect to the Business, the Transferred Assets, the Assumed Liabilities or the Purchased Entity (and each Subsidiary thereof) without the prior written consent of Florida (such consent not to be unreasonably withheld, conditioned or delayed):
(i) except (x) as may be required by a Georgia Benefit Plan as in effect on the date hereof or as may be established or amended not in contravention of this Agreement, (y) in connection with any action that generally applies to participating Business Employees and other similarly situated employees of Georgia and its business Affiliates or (z) for any grant, payment, award or arrangement for which Georgia or any of its Affiliates (other than the Purchased Entity or any of its Subsidiaries) shall retain all Liabilities, (A) grant or increase any compensation or benefit to any Key Business Employee, other than increases to base salary (and corresponding increases in incentive opportunities or other compensation or benefits calculated by reference to base salary) adopted in the ordinary course of business consistent with past practice, (B) accelerate the vesting, funding or payment of any compensation or benefits to any Key Business Employee, (C) adopt, establish, enter into, terminate, modify or materially amend any Purchased Entity Benefit Plan, other than in all material respects and use commercially reasonable efforts the ordinary course of business consistent with past practice, (D) hire, engage or promote (in each case other than to maintain and preserve intact its business organizationfill a vacancy) or terminate (other than for cause) the employment or engagement of any Key Business Employee, or (E) other than as required by applicable Law or deemed by Georgia in good faith as necessary to satisfy the Labor Process Obligations, enter into, modify, extend or terminate any Business Collective Bargaining Agreement or recognize or certify any labor union, works council, or other labor organization or group of employees as the bargaining representative for any Business Employees;
(ii) authorize or effect any amendment to, or change, or waiver under, the services organizational documents of the Purchased Entity (or any Subsidiary thereof) in any manner adverse to Florida;
(iii) (A) issue, sell, pledge, transfer, redeem or repurchase, or authorize or propose to issue, sell, pledge, transfer, redeem, repurchase or authorize, or reclassify, any equity interests of the Purchased Entity (or any of its Subsidiaries) or securities convertible into, or exchangeable or exercisable for, or options with respect to, or warrants to purchase, or rights to subscribe for, equity interests of the Purchased Entity (or any of its Subsidiaries) or (B) with respect to the Purchased Entity, declare, set aside or pay any non-cash dividend or non-cash distribution with respect to any equity interests thereof;
(iv) permit the Purchased Entity (or Subsidiary thereof) to incur, create or assume, or otherwise incur, create or assume with respect to the Business (and in the case of the following clauses (A) and (B), excluding Settlement Indebtedness and Settlement Liens (as such terms are defined in the Chicago Transaction Agreement)), (A) any indebtedness for borrowed money in excess of $50,000,000 in the aggregate, other than in the ordinary course of business (provided that such indebtedness for borrowed money constitutes Purchased Entity Funded Debt to the extent outstanding immediately prior to the Closing) or that will be settled at or prior to the Closing or (B) any Lien, other than Permitted Liens, with respect to any material asset of the Business other than those (1) in the ordinary course of business or (2) that will be discharged or released at or prior to the Closing;
(A) acquire any material assets, Person or business (whether by merger, consolidation or acquisition of stock or assets or otherwise), (B) enter into any joint venture with any Person or (C) make any loans, investments or advances to or in any Person (other than routine advances of business expenses to employees and its advantageous extensions of credit to customers in the ordinary course of business relationshipsand loans, and investments or advances solely between or among Georgia, a Georgia Entity, the Purchased Entity or any of their respective Subsidiaries);
(bvi) dispose of, lease, license, transfer or, abandon any material Transferred Assets or other material assets of the Business (including material Business Intellectual Property), in each case, other than disposals, leases, non-exclusive licenses, transfers or abandonment in the ordinary course of business;
(A) except as expressly contemplated by Section 6.11(e) with respect to Shared Contracts, amend, cancel, extend, renew or waive any material right under, or voluntarily terminate (other than upon expiration or automatic extension or renewal in accordance with its terms), any Business Permit or any Business Material Contract or the portion relating to the Business of any Shared Contract, except in each such case, for immaterial amendments or modifications in the ordinary course of business consistent with past practice, or (B) enter into any Contract that, if in effect on the date hereof, would be a Business Material Contract outside the ordinary course of business consistent with past practice;
(viii) make any material change in any method of financial accounting or financial accounting practice or working capital or cash management (including with respect to settlement liabilities, settlement receivables, settlement deposits, accounts receivable and accounts payable, but excluding the utilization of cash to repay outstanding indebtedness for borrowed money) practice or policy applicable to the Business, other than such changes as are required by this Agreement GAAP or applicable Law;
(including ix) other than as set forth in the Company Disclosure Schedule capital expenditure budget made available to Florida, make any capital expenditures or commitments for capital expenditures that have post-Closing obligations in excess of $5,000,000 individually, or $50,000,000 in the aggregate;
(x) settle, initiate or compromise any Proceeding, audit or investigation (other than any Proceeding, audit or investigation in respect of Taxes or Tax matters) if such settlement or compromise (A) requires payment to any other Person or involves a claim by Georgia (or any Subsidiary thereof) of amounts in excess of $5,000,000, (B) imposes ongoing restrictions on the operations of the Business or the Purchaser Disclosure SchedulePurchased Entity (or Subsidiary thereof) (other than customary confidentiality obligations), (C) is brought by a Governmental Entity or (D) involves criminal penalties;
(xi) other than with respect to any Georgia Combined Tax Return or any Georgia Tax Group, (A) make (other than consistent with past practice), revoke or change any material Tax election, (B) change any annual accounting period, (C) adopt, elect (other than consistent with past practice) or change any material method of accounting, (D) surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, (E) enter into any closing or similar agreement with any Taxing Authority in respect of any material Tax, (F) settle or abandon any material Tax claim, audit, or assessment or material Proceeding in respect of Taxes or Tax matters for an amount materially in excess of amounts reserved therefor, (G) amend any material Tax Return, or (H) consent to any extension or waiver of the limitations period applicable to any material Tax audit, claim, Proceeding or assessment, other than any such extension that is automatic or automatically granted (it being agreed and understood that none of clauses (i) through (x) nor clauses (xii) through (xviii) of this Section 6.1(b) shall apply with respect to Tax compliance matters (other than clause (xviii) insofar as it relates to this clause (xi));
(xii) make any material change to (A) the operation or security of, or any administrative, technical or physical safeguards related to, any Information Technology or privacy or data security or (B) any policies or procedures with respect to Personally Identifiable Information or confidential or other sensitive information (including customer data) or Business Data Security Requirements, except (x) as required by law applicable Law, any Governmental Entity or any Contract in effect as consented of the date hereof, (y) as would not be material and adverse to the Business, taken as a whole, or (z) as may be necessary or reasonable to contain or remediate a breach, cybersecurity incident, cybersecurity vulnerability, or other Security Incident, or any other occurrence that requires the Business to remediate its cybersecurity program;
(xiii) enter into any material new line of business or agree to or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization under applicable Law;
(xiv) enter into, amend or modify any Related Party Agreement, solely with respect to any such Contracts that will survive the Closing and not be terminated pursuant to Section 6.4;
(xv) (A) amend, cancel, extend, or renew any material term of, or waive any material right under, or voluntarily terminate (other than upon expiration or automatic extension or renewal in accordance with its terms), any lease governing a Business Leased Real Property, except in each such case, for immaterial amendments or modifications in the ordinary course of business consistent with past practice, or (B) grant any party the right to use or occupy any Business Owned Real Property, except in the ordinary course of business consistent with past practice;
(xvi) issue, sell, grant or pledge to any Business Employee, Former Business Employee or Business Independent Contractor (A) any equity interest in Georgia or any of its Subsidiaries or (B) any warrant, option, “phantom” stock right, stock appreciation right, stock-based performance unit or other right, agreement, arrangement, Contract or commitment pursuant to which Georgia or any of its Subsidiaries is or may become obligated to issue, sell, grant or pledge any equity interest in, or voting security of, Georgia or any of its Subsidiaries;
(xvii) transfer or reassign the duties of (A) a Business Employee such that he or she is no longer a Business Employee or (B) any other employee of Georgia or its Affiliates such that he or she would become a Business Employee, other than as expressly contemplated pursuant to Section 9.1 herein or with respect to any transfers of employment (including as a result of a written internal transfer request initiated by an employee) in the ordinary course and consistent with past practice (notice of which shall be promptly delivered to Florida); or
(xviii) authorize any of, or commit or agree to take, whether in writing by or otherwise, or do any of, the other partyforegoing actions.
(c) Nothing contained in this Agreement shall be construed to give to Florida, each directly or indirectly, rights to control or direct the Business’s operations prior to the Closing. Prior to the Closing, Georgia (and its Subsidiaries) shall exercise, subject to the terms and conditions of this Agreement, complete control and supervision of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay operations of the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basisBusiness. Notwithstanding anything in this Agreement to the contrary set forth contrary, the Parties acknowledge and agree that nothing in this Section 5.1 6.1 shall be deemed to limit the Georgia Entities’ ability to transfer the Excluded Assets or Section 5.2 the Retained Liabilities to Georgia or any of its Subsidiaries (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party the Purchased Entity and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary Subsidiaries) in accordance with this Agreement (including Section 6.10) or prudent for it to take the Transferred Assets or not take in response Assumed Liabilities to the Pandemic Purchased Entity and its Subsidiaries, in each case prior to, at or after the Pandemic Measures; provided, that such party shall provide prior notice to and consult Closing or prohibit Georgia from implementing the Georgia Pre-Closing Restructuring Steps in good faith accordance with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.26.10.
Appears in 1 contract
Sources: Transaction Agreement (Fidelity National Information Services, Inc.)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as set forth in Section 5.2 of Business Prior the Seller Disclosure Schedules or as required by applicable Law or any COVID-19 Measures and any action required to be taken, or omitted to be taken by Seller, any other Seller Entity, the Purchased Entity (or Subsidiary thereof) in response thereto (provided that Seller shall keep Purchaser reasonably informed as to the Effective Time. During actions taken or omitted to be taken in respect to any COVID-19 Measure and provide Purchaser with reasonable advance notice of any such action and consult in good faith with Purchaser prior to taking or omitting to take any such action), or as otherwise expressly required or permitted by the period terms of this Agreement (including Section 5.14), or to the extent related to the Excluded Assets, the Retained Liabilities or the Retained Business, from the date of this Agreement to the Effective Time or earlier termination Closing, and except with the prior written consent of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), Seller shall, and shall cause each other Seller Entity and the Purchased Entity (aand any Subsidiary thereof) Company shallto, use commercially reasonable efforts to conduct the Business in all material respects in the ordinary course and preserve intact its current business organization; provided that no action by Seller or its Subsidiaries that is specifically addressed by Section 5.2(b) shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of Section 5.2(b).
(b) Except as set forth in Section 5.2 of the Seller Disclosure Schedules or as required by applicable Law or any COVID-19 Measures and any action required to be taken, or omitted to be taken by Seller, any other Seller Entity, the Purchased Entity (or Subsidiary thereof) in response thereto (provided that Seller shall keep Purchaser reasonably informed as to the actions taken or omitted to be taken in respect to any COVID-19 Measure and provide Purchaser with reasonable advance notice of any such action and consult in good faith with Purchaser prior to taking or omitting to take any such action), or as otherwise expressly required or permitted by the terms of this Agreement (including Section 5.6, Section 5.14 or Article VI), or to the extent related to the Excluded Assets or Retained Liabilities, from the date of this Agreement to the Closing, Seller shall not, and shall cause its Subsidiaries and the Purchased Entity (and each Subsidiary thereof) not to, conduct do any of the following with respect to the Business, the Transferred Assets, the Assumed Liabilities or the Purchased Entity (and each Subsidiary thereof) without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) except (x) as may be required by a Seller Benefit Plan as in effect on the date hereof or as may be established or amended not in contravention of this Agreement or (y) in connection with any action that generally applies to participating Business Employees and other similarly situated employees of Seller and its business Affiliates or for any grant, payment, award or arrangement for which Seller or any of its Affiliates (other than the Purchased Entity or any of its Subsidiaries) shall retain all Liabilities, (A) grant or increase any compensation or benefit to any Key Business Employee, other than increases to base salary (and corresponding increases in incentive opportunities or other compensation or benefits calculated by reference to base salary) adopted in the ordinary course of business consistent with past practice, (B) accelerate the vesting, funding or payment of any compensation or benefits to any Key Business Employee, (C) adopt, establish enter into, terminate, modify or materially amend any Purchased Entity Benefit Plan, other than in all material respects and use commercially reasonable efforts the ordinary course of business consistent with past practice, (D) hire, engage or promote (in each case other than to maintain and preserve intact its business organizationfill a vacancy) or terminate (other than for cause) the employment or engagement of any Key Business Employee, or (E) other than as required by applicable Law or deemed by Seller in good faith as necessary to satisfy the Labor Process Obligations, enter into, modify, extend or terminate any Collective Bargaining Agreement or recognize or certify any labor union, works council, or other labor organization or group of employees as the bargaining representative for any Business Employees;
(ii) authorize or effect any amendment to, or change, the services organizational documents of the Purchased Entity (or any Subsidiary thereof), in a manner adverse to Purchaser;
(iii) (A) issue, sell, pledge, transfer, redeem or repurchase, or authorize or propose to issue, sell, pledge, transfer, redeem, repurchase or authorize, or reclassify, any equity interests of the Purchased Entity (or any of its employees Subsidiaries) or securities convertible into, or exchangeable or exercisable for, or options with respect to, or warrants to purchase, or rights to subscribe for, equity interests of the Purchased Entity (or any of its Subsidiaries) or (B) with respect to the Purchased Entity, declare, set aside or pay any non-cash dividend or non-cash distribution with respect to any equity interests thereof;
(A) permit the Purchased Entity (or Subsidiary thereof) to incur, create or assume (A) any indebtedness for borrowed money in excess of $500,000,000 in the aggregate, other than in the ordinary course of business or that will be settled at or prior to the Closing or (B) any Lien, other than Permitted Liens, with respect to any material asset of the Business other than (1) in the ordinary course of business or (2) those that will be discharged or released at or prior to the Closing;
(A) acquire any material assets, Person or business (whether by merger, consolidation or acquisition of stock or assets or otherwise), (B) enter into any joint venture with any Person or (C) make any loans, investments or advances to or in any Person (other than routine advances of business expenses to employees, extensions of credit to customers and its advantageous business relationshipsloans, and investments or advances solely between or among the Seller, a Seller Entity, the Purchased Entity or any of their respective Subsidiaries);
(bvi) dispose of, lease, license, transfer or, abandon any material Transferred Assets or other material assets of the Business (including material Business Intellectual Property), in each case, other than disposals, leases, non-exclusive licenses, transfers or abandonment in the ordinary course of business;
(vii) (A) except as expressly contemplated by Section 5.15(e) with respect to Shared Contracts, amend any material term of, or waive any material right under, or voluntarily terminate (other than upon expiration in accordance with its terms), any Business Permit or any Material Contract or the portion relating to the Business of any Shared Contract that is material to the Business, or (B) enter into any Contract that, if in effect on the date hereof, would be a Material Contract of the type described in (I) Section 3.12(a)(iv) or Section 3.12(a)(viii), other than the automatic renewal or extension of any such Material Contract pursuant to its terms, or (II) Section 3.12(a)(ii) if in connection therewith the Seller or its Affiliates (other than the Purchased Entity and its Subsidiaries) enters into or amends a commercial arrangement with such counterparty;
(viii) make any material change in any method of financial accounting or financial accounting practice or working capital or cash management (including with respect to settlement liabilities, settlement receivables, settlement deposits, accounts receivable and accounts payable) practice or policy applicable to the Business, other than such changes as are required by this Agreement GAAP or applicable Law;
(including ix) other than as set forth in the Company Disclosure Schedule capital expenditure budget made available to Purchaser, make any capital expenditures or commitments for capital expenditures that have post-Closing obligations in excess of $5,000,000 individually, or $50,000,000 in the aggregate; settle, initiate or compromise any Proceeding, audit or investigation (other than any Proceeding, audit or investigation in respect of Taxes or Tax matters) if such settlement or compromise (A) requires payment to any other Person or involves a claim by Seller (or any Subsidiary thereof) of amounts in excess of $10,000,000, (B) imposes ongoing restrictions on the operations of the Business or the Purchaser Disclosure SchedulePurchased Entity (or Subsidiary thereof) (other than customary confidentiality obligations), (C) is brought by a Governmental Entity or (D) involves criminal penalties;
(x) terminate or fail to renew the coverage of any material Business Insurance Policy;
(xi) other than with respect to any Seller Combined Tax Return or any Seller Tax Group (or any other Tax Return to the extent intended to conform to a Seller Combined Tax Return or a Tax Return of a Seller Tax Group), (A) make (other than consistent with past practice), revoke or change any material Tax election, (B) change any annual accounting period, (C) adopt, elect (other than consistent with past practice) or change any material method of accounting, (D) surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, (E) enter into any closing or similar agreement with any Taxing Authority in respect of any material Tax, (F) settle or abandon any material Tax claim, audit, or assessment or material Proceeding in respect of Taxes or Tax matters for an amount materially in excess of amounts reserved therefor, (G) amend any material Tax Return, or (H) consent to any extension or waiver of the limitations period applicable to any material Tax audit, claim, Proceeding or assessment, other than any such extension that is automatic or automatically granted, but, in each case, only to the extent such action would reasonably be expected to have a material and adverse continuing effect on the Tax liability of the Purchased Entity or its Subsidiaries for a Post-Closing Tax Period (it being agreed and understood that none of clauses (i) through (x) nor clause (xii) through (xvi) of this Section 5.2(b) shall apply with respect to Tax compliance matters (other than clause (xvi) insofar as it relates to this clause (xi)));
(xii) make any material change to (A) the operation or security of, or any administrative, technical or physical safeguards related to, any Information Technology or privacy or data security or (B) any policies or procedures with respect to Personally Identifiable Information or confidential or other sensitive information (including customer data) or Data Security Requirements, except as required by law applicable Law, any Governmental Entity or any Contract in effect as consented of the date hereof;
(xiii) enter into any material new line of business or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization under applicable Law;
(xiv) enter into, amend or modify any Contracts between Seller and its Affiliates (other than the Purchased Entity and its Subsidiaries), on the one hand, and the Purchased Entity and its Subsidiaries or otherwise involving the Business, on the other hand, in each case, solely with respect to any such Contracts that will survive the Closing and not be terminated pursuant to Section 5.6;
(xv) transfer or reassign the duties of (A) a Business Employee such that he or she is no longer a Business Employee or (B) any other employee of Seller or its Affiliates such that he or she would become a Business Employee, other than as expressly contemplated pursuant to Section 6.1 herein or with respect to any transfers of employment (including as a result of a written internal transfer request initiated by an employee) in the ordinary course and consistent with past practice (notice of which shall be promptly delivered to Purchaser); or
(xvi) authorize any of, or commit or agree to take, whether in writing by or otherwise, or do any of, the other partyforegoing actions.
(c) Nothing contained in this Agreement shall be construed to give to Purchaser, each directly or indirectly, rights to control or direct the Business’s operations prior to the Closing. Prior to the Closing, Seller (and its Subsidiaries) shall exercise, subject to the terms and conditions of this Agreement, complete control and supervision of the Company operations of the Business. Notwithstanding anything in this Agreement to the contrary, the Parties acknowledge and Purchaser agree that nothing in this Section 5.2 shall be deemed to limit the Seller Entities’ ability to transfer the Excluded Assets or the Retained Liabilities to Seller or any of its Subsidiaries (other than the Purchased Entity and its Subsidiaries) or the Transferred Assets or Assumed Liabilities to the Purchased Entity and its Subsidiaries, in each case prior to, at or after the Closing or prohibit Seller from implementing the Pre-Closing Restructuring Steps in accordance with Section 5.14.
(d) Except as contemplated by Article II, from 12:01 a.m. (Eastern Time) on the Closing Date through the Closing, Seller shall not, and shall cause their respective Subsidiaries each Seller Entity and the Purchased Entity (and each Subsidiary thereof) not to, knowingly take incur, create, guarantee or assume any action that indebtedness for borrowed money for which the Purchased Entity (or any Subsidiary thereof) would reasonably be expected to adversely affect an obligor or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2constitute an Assumed Liability.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Fidelity National Information Services, Inc.)
Covenants Relating to Conduct of Business. 5Section 6.1. 1Conduct Conduct of Business Prior to by the Effective TimeCompany Pending the Merger. During the period from the date of this Agreement to until the earlier of the Effective Time or earlier termination such time as Parent's and Sub's designees shall constitute a majority of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in Board of Directors of the case of clause (b)Company, the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause each of its Subsidiaries to, conduct in all material respects, except as contemplated by this Agreement, carry on its business in the ordinary course as currently conducted and, to the extent consistent therewith, with no less diligence and effort than would be applied in all material respects and use commercially reasonable efforts the absence of this Agreement, seek to maintain and preserve intact its their current business organizationorganizations, keep available the services of its their current officers and employees and its advantageous preserve their relationships with customers, suppliers and others having business relationshipsdealings with them to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and (b) except as expressly required otherwise contemplated by this Agreement (including as set forth in Agreement, during such period, the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause their respective not permit any of its Subsidiaries not to, knowingly take without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its Articles of Incorporation or By-laws (or comparable governing instruments) or change the number of directors constituting the entire Board of Directors of the Company or any action that would reasonably be expected of its Subsidiaries;
(b) authorize for issuance, issue, deliver, grant, sell, pledge, or otherwise dispose of or propose to adversely affect issue, deliver, grant, sell, pledge or materially delay the ability to obtain any necessary approvals otherwise dispose of any Regulatory Agency shares of, or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any shares of, the capital stock or other Governmental Entity required securities of the Company or any of its Subsidiaries including, but not limited to, stock appreciation rights, phantom stock, any securities convertible into or exchangeable for shares of stock of any class of the transactions contemplated hereby Company or to perform any of its respective covenants and agreements under this Agreement or to consummate Subsidiaries; provided, however, that the transactions contemplated hereby on a timely basis. Notwithstanding anything foregoing shall not prohibit the issuance of Shares upon the exercise of Company Options granted prior to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which date of this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2.Agreement;
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct of Business Prior to (a) Except as required by applicable Law (including any Covid-19 Measures) or as otherwise contemplated by the Effective Time. During the period from the date of this Agreement to the Effective Time or earlier termination terms of this Agreement, or to the extent related to the Retained Businesses, and except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), from the date of this Agreement up until the Closing or earlier termination of this Agreement, Seller shall cause each Seller Entity and each Purchased Entity to conduct the Business in all material respects in the ordinary course; provided, however, that no action by Seller or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 5.2 shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of such other provision.
(ab) Company shallExcept as set forth in Section 5.2 of the Seller Disclosure Schedules, as required by applicable Law (including any Covid-19 Measures) or as otherwise contemplated by the terms of this Agreement, or to the extent related to the Retained Businesses, from the date of this Agreement up until the Closing or earlier termination of this Agreement, Seller shall cause each Purchased Entity not to do any of the following without the prior consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) effect any amendment to, or change, the organizational documents or bylaws of any Purchased Entity;
(ii) (A) split, combine or reclassify the outstanding equity interests of any of the Purchased Entities or (B) declare, set aside or pay any cash dividend or distribution, non-cash dividend or non-cash distribution to any Person;
(iii) issue, sell, pledge or transfer or propose to issue, sell, pledge or transfer any equity interests of any of the Purchased Entities, or securities convertible into, or exchangeable or exercisable for, or options with respect to, or warrants to purchase, or rights to subscribe for, equity interests of any of the Purchased Entities, in each case other than the granting of Permitted Liens;
(iv) incur, create or assume (A) any indebtedness for borrowed money in excess of €500,000 in the aggregate, other than that will be settled at or prior to Closing, or (B) any Lien, other than Permitted Liens, with respect to any material asset of the Business;
(v) acquire any assets or dispose of any assets of the Business (other than Intellectual Property Rights, which are addressed in Section 5.2(b)(vi), and shall cause real property assets, which are addressed in Section 5.2(b)(xiv)), in each case, outside of the ordinary course of business, for consideration in excess of €200,000 in one single transaction or €500,000 in the aggregate;
(vi) assign, license exclusively, abandon or otherwise dispose of, or fail to maintain applications for any Business Registered IP or Permits, in each case, owned by the Purchased Entities and material to the Business, other than the abandonment of or decision not to maintain applications constituting Business Registered IP in the reasonable business judgment of an applicable Purchased Entity;
(vii) (A) amend any material term of, or waive any material right under, or voluntarily terminate (other than upon expiration in accordance with its Subsidiaries toterms), conduct any Material Contract, or (B) enter into any Contract that, if in effect on the date hereof, would be a Material Contract of the type set forth in clauses (a)(iv), (a)(v), (a)(viii)(A) and (a)(ix) of Section 12 of the Seller’s Representations and Warranties, other than, in each case of clauses (A) and (B), (x) as expressly permitted by another provision of this Section 5.2(b) or (y) for the automatic renewal or extension of any Material Contract pursuant to its business terms;
(viii) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Purchased Entities, other than such changes as are required by generally accepted accounting principles applicable in the jurisdiction of incorporation of the relevant Purchased Entity;
(ix) except as may be contemplated by any Seller Benefit Plan or Collective Bargaining Agreement, in the ordinary course in all material respects of business (A) amend the terms and use commercially reasonable efforts to maintain and preserve intact its business organizationconditions of employment or engagement or any benefits for any Business Employees, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party unless to the extent that such actions would otherwise require consent amendments and benefits (in aggregate) do not entail a cost increase in excess of four percent (4%) of the current annual aggregate personnel costs attributable to the Business Employees at the date of this Agreement; (B) employ or terminate any director, officer, manager or employee of a Purchased Entity who received an annual base salary exceeding €100,000, (C) carry out any collective lay-off of employees, or (D) adopt, enter into or materially amend any Purchased Entity Benefit Plan;
(x) commit or authorize any commitment to make any capital expenditures in excess of €200,000 in the aggregate;
(xi) merge or consolidate with any other Person or adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, spin-off, demerger or other reorganization, or file any application for insolvency or liquidation, unless required by applicable Laws;
(xii) with respect to the Purchased Entities (including the Portuguese Branch), (A) make (except in the ordinary course of business), change or revoke any material Tax election, (B) change any Tax accounting period, (C) change any material method of Tax accounting, or (D) file any Tax Return amending any Tax Returns previously filed, or (E) settle any claim or assessment in a Tax Proceeding, in each case, if such action would result in an increase in the Tax liability of the Purchased Entities for a Post-Closing Tax Period in excess of €50,000 in aggregate;
(xiii) settle or compromise any Proceeding, or enter into any consent decree or settlement agreement with any Governmental Entity, against the Business other than settlements or compromises of any Proceeding (A) where the amount paid in settlement or compromise does not exceed €100,000 individually or €500,000 in the aggregate or (B) with respect to Tax matters, which shall be exclusively governed by Section 5.2(b)(xii);
(xiv) (A) enter into a lease agreement in relation to real estate property between a Purchased Entity as a lessor and a third party under as a lessee or (B) acquire or dispose of any real property assets of the Business;
(xv) (A) enter into a formalized loan, facility or other intra-group financing (except as for any Qualifying Intragroup Loan), or (B) carry out any cash and/or cash equivalent contribution or contribution of receivables, including any waiver of receivables; or
(xvi) authorize any of, or commit or agree to take, whether in writing or otherwise, or do any of, the foregoing actions.
(c) Nothing contained in this Section 5.1 Agreement shall be construed to give to Purchaser, directly or Section 5.2indirectly, rights to control or direct the Business’s operations prior to the Closing. Prior to the Closing, Seller (and its Subsidiaries) shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of the operations of the Business.
Appears in 1 contract
Covenants Relating to Conduct of Business. 54.1. 1Conduct Conduct of Business Prior to of Company Pending the Effective TimeMerger. During Company covenants and agrees that, during the period from the date of this Agreement hereof to the Effective Time and except as otherwise agreed to in writing by Purchaser or earlier termination of as expressly contemplated by this Agreement, the businesses of Company and its Subsidiaries shall be conducted only in, and Company and its Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance with applicable laws; and Company and its Subsidiaries, except as expressly contemplated or permitted by this Agreement, shall each use its commercially reasonable efforts to preserve substantially intact the business organization of Company and its Subsidiaries, to keep available the services of the present officers, employees and consultants of Company and its Subsidiaries and to preserve the present relationships of Company and its Subsidiaries with such of the customers, suppliers, licensors, licensees, or distributors with which Company or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, without the prior written consent of Purchaser (which shall not be unreasonably withheld or delayed) neither Company nor any of its Subsidiaries shall, between the date of this Agreement (including and the Effective Time, except as set forth in Section 4.1 of the Company Disclosure Schedule), required by law directly or as consented indirectly do, or propose or commit to in writing by Purchaser (ordo, in any of the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), following:
(a) Amend its articles of incorporation or by-laws or equivalent organizational documents;
(b) Issue, deliver, sell, pledge, dispose of or encumber, or authorize or commit to the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including but not limited to stock appreciation rights or phantom stock), of Company shallor any of its Subsidiaries, except for (i) the issuance of securities issuable pursuant to options outstanding as of the date hereof under the Option Agreement or any Benefit Plans of Company (including the Company Employee Stock Purchase Plan ("Company ESPP")) and shall cause (ii) grants of equity or equity-based awards in accordance with Section 4.1(b) of the Company Disclosure Schedule.
(c) Declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its Subsidiaries tocapital stock, conduct other than dividends payable by a directly or indirectly wholly-owned Subsidiary of Company to Company or another directly or indirectly wholly-owned Subsidiary of Company;
(d) Reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, stock options or debt securities;
(e) Acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division or line of business;
(f) Modify its current investment policies or investment practices in any material respect except to accommodate changes in applicable law;
(g) Transfer, lease, mortgage, or otherwise dispose of or subject to any Lien any of its assets, including capital stock of Subsidiaries, with a fair market value in excess of $10 million individually or $25 million in the aggregate (except (i) by incurring Permitted Liens; (ii) in the ordinary course of business consistent with past practice; and (iii) equipment and property no longer used in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organizationthe operation of Company's or any Subsidiaries' business);
(I) Repay or retire any indebtedness for borrowed money or repurchase or redeem any debt securities, except (x) upon the maturity date of such indebtedness or as otherwise required by the terms of such indebtedness or securities or (y) as permitted by Section 5.16, (II) incur any indebtedness for borrowed money or issue any debt securities or (III) assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the services obligations of its employees any person, or make any loans, advances or capital contributions to, or investments in, any other person in excess of $5 million individually or $10 million in the aggregate (it being understood that trade payables, ordinary course business funding mechanisms between Company and its advantageous customers and providers and guarantees of indebtedness by the Company and its Subsidiaries to the Company and its Subsidiaries shall not be considered indebtedness for purposes of this provision);
(i) Enter into or amend any Material Contract, any other contract or agreement (with "other contract or agreement" being defined for purposes of this subsection as a contract or agreement which involves Company incurring a liability in excess of $10 million individually or $25 million in the aggregate and which is not terminable by Company without penalty upon one year or less notice (other than (x) contracts or amendments issued or entered into in the ordinary course of business relationshipswith customers or providers of Company or its Subsidiaries, and (by) except customer agreements that are not terminable within one year solely as expressly a result of HIPAA or other statutory or regulatory requirements or (z) as required by law)) or, except for any agreement in the ordinary course of business and that is not inconsistent with Section 5.16, agreement with an affiliate of Company;
(j) Except (A) to the extent required under this Agreement (including or as set forth in on Section 4.1(j) of the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by (B) pursuant to applicable law or as consented (C) pursuant to in writing by the other party, each of existing obligations under the Company Plans or collective bargaining agreements, increase the compensation or fringe benefits of any of its directors, officers or employees, except for increases in salary or wages of officers and Purchaser shall notemployees of Company or its Subsidiaries in the ordinary course of business in accordance with past practice, or grant any severance or termination pay not currently required to be paid under existing severance plans or enter into, or amend, any employment, change-in-control or similar arrangement, consulting or severance agreement or arrangement (except, other than with respect to the sixteen Company executives with executive continuity agreements, pursuant to separation agreements and shall cause their respective severance agreements entered into in the ordinary course of business consistent with past practice) with any present or former director, officer or other employee of Company or any of its Subsidiaries, or establish, adopt, enter into or amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, welfare, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees;
(k) Except as may be required as a result of a change in law or in generally accepted accounting or actuarial principles, make any material change to the accounting practices or principles or reserving or underwriting practices or principles used by it;
(l) Knowingly take, or knowingly permit any of its Subsidiaries not toto take, knowingly take any action that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(m) Settle or compromise any pending or threatened suit, action or claim involving a payment by Company or its Subsidiaries in excess of $1,000,0000 or agree to any settlement or compromise in respect thereof, if such settlement or compromise would be reasonably likely to be expected (i) a settlement or compromise which is the first settlement or compromise effected by the Company or its Subsidiaries with regards to adversely affect any particular type of conduct or materially delay complaint or (ii) a settlement or compromise which would be substantially different than prior settlements of the ability Company or its Subsidiaries with regards to obtain any necessary approvals particular type of any Regulatory Agency conduct or complaint, which in either the case of (i) or (ii) would create an adverse precedent for claims, actions or proceedings that would be material to Company and its Subsidiaries, taken as whole;
(n) Adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other Governmental Entity required for the transactions contemplated hereby reorganization of Company or to perform any of its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2.Subsidiaries;
Appears in 1 contract
Sources: Merger Agreement (Anthem Inc)
Covenants Relating to Conduct of Business. 5. 1Conduct Except for matters (i) expressly agreed to in writing by Purchaser or (ii) otherwise expressly permitted or required by the terms of Business Prior to the Effective Time. During the period this Agreement, from the date of this Agreement to the Effective Time Closing, the Seller and the Seller Subsidiaries shall cause the Business to be conducted in the ordinary course in substantially the same manner as previously conducted and, to the extent consistent therewith, use their reasonable best efforts to preserve their relationships with customers, suppliers, distributors and others with whom they deal in the ordinary course of business. In addition (and without limiting the generality of the foregoing), except as otherwise expressly permitted or earlier termination required by the terms of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in Seller and the Company Disclosure Schedule), required by law or as consented to in writing by Seller Subsidiaries shall not do any of the following without the prior written consent of Purchaser (or, in the case of clause (b), the Company) (such which consent shall not to be unreasonably withheld, conditioned or delayed), ) in connection with the Business:
(a) Company shallincur or assume any liabilities, and shall cause its Subsidiaries toobligations or indebtedness for borrowed money or guarantee any such liabilities, conduct its business obligations or indebtedness, other than in the ordinary course in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organization, the services of its employees and its advantageous business relationships, and business;
(b) except as expressly permit any of the Transferred Assets to become subjected to any Lien of any nature whatsoever, other than Permitted Liens;
(c) cancel any material indebtedness (individually or in the aggregate) or waive any claims or rights of material value;
(d) make any material change in any method of accounting or accounting practice or policy other than those required by this Agreement GAAP or by Applicable Law (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party solely to the extent such actions change would otherwise require consent be binding on Purchaser, it being understood that no such change shall affect any calculation under Section 2.01);
(e) acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other party manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets (other than inventory) that are material to the Business, taken as a whole;
(f) make or incur any capital expenditures (of a non-emergency nature)(to the extent such capital expenditure would constitute an Assumed Liability) that exceed $250,000 in the aggregate, except for any such capital expenditures for which Seller, the Seller Subsidiaries and their affiliates shall be solely obligated;
(g) sell, lease, license or otherwise dispose of any material Transferred Assets, except for the sale of Inventory in the ordinary course of business and obsolete or excess equipment sold or disposed of in the ordinary course of business;
(h) enter into or amend any lease of real property that constitutes a Transferred Asset, except any renewals of existing leasehold interests that constitute Leased Property in the ordinary course of business consistent with past practice;
(i) enter into any employment contract or collective bargaining agreement, written or oral, or modify the term of any existing Employment Contract, other than in compliance with compulsory applicable company, plant or other collective bargaining agreements;
(j) except as set forth below, increase or commit or promise to increase the cash compensation payable or to become payable to any Business Employee or make any discretionary bonus or management fee payment to any such Person, except bonuses or salary increases to employees at the times and in the amounts consistent with its past practice;
(k) (i) adopt, establish, amend or terminate any Seller Employee Benefit Plan or employee policies and procedures or (ii) take any discretionary action, or omit to take any contractually required action, if that action or omission could either (A) deplete the assets of any Seller Employee Benefit Plan or (B) increase the liabilities or obligations under this Section 5.1 any such Seller Employee Benefit Plan;
(l) waive any of its rights or Section 5.2claims that in the aggregate are material to the Business, provided that it may negotiate and adjust bills in the course of good faith disputes with customers and vendors in a manner consistent with past practice;
(m) amend in any material respect or terminate any Business Contract of Seller or any of its Permits; or
(n) agree, whether in writing or otherwise, to do any of the foregoing.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5SECTION 5.1 Conduct of the Company's Business Pending the Merger. 1Conduct of Business Prior to the Effective Time. During The Company covenants and agrees that, during the period from the date of this Agreement hereof to the Effective Time or earlier termination (except as otherwise contemplated by the terms of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to unless Parent shall otherwise agree in writing by Purchaser (or, in the case of clause (b)advance, the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause its Subsidiaries to, conduct its business in the ordinary course in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organization, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each businesses of the Company and Purchaser its Subsidiaries shall notbe conducted only in the usual and ordinary course of business in substantially the same manner as heretofore conducted and in compliance with applicable laws; and the Company and its Subsidiaries shall each use all commercially reasonable efforts consistent with the foregoing to preserve substantially intact the business organization of the Company and its Subsidiaries, to keep available the services of the present officers and employees of the Company and its Subsidiaries (subject to prudent management of workforce needs and ongoing programs currently in force), to preserve the present relationships of the Company and its Subsidiaries with customers, suppliers, distributors and other Persons with which the Company or any of the Subsidiaries has significant business relations, to maintain and keep its material assets in good repair and condition (subject to ordinary wear and tear), to maintain supplies and inventories in quantities consistent with past practice; provided, however, that, notwithstanding any of the foregoing, in no event shall cause their respective any of the Company's Subsidiaries not tobe restricted from taking any action, knowingly take nor shall they be required to obtain Parent's consent prior to taking such action, if Kinder Morg▇▇ ▇.▇., ▇▇c. believes the taking of that action to be in the best interests of Kind▇▇ ▇▇▇▇▇▇ ▇▇▇rgy Partners, L.P. and its unitholders; and provided, further, that the Company shall promptly notify Parent of any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything taken pursuant to the contrary immediately preceding proviso. By way of amplification and not limitation, neither the Company nor any of its Subsidiaries shall, except as set forth in Section 5.1 of the Company Disclosure Schedule and as otherwise contemplated by the terms of this Agreement, between the date of this Agreement and the Effective Time, directly or Section 5.2 indirectly do, or propose or commit to do, any of the following without the prior written consent of Parent:
(a) except as required by law, make or commit to make any capital expenditures (other than reimbursable expenditures which are collected from third parties within 120 days of incurrence) in excess of $1 million, other than (i) expenditures for routine maintenance and repair or (ii) unplanned capital expenditures due to emergency conditions, unanticipated catastrophic events or extreme weather;
(b) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than the Company or a wholly-owned Subsidiary of the Company or enter into any "keep well" or other agreement to maintain the financial condition of another Person (other than the Company or a wholly-owned Subsidiary of the Company) or make any loans, or advances of borrowed money or capital contributions to, or equity investments in, any other Person (other than the Company or a wholly-owned Subsidiary of the Company) or issue or sell any debt securities such that the debt of the Company shall be greater than $148.6 million plus any debt incurred to fund a required capital contribution by Kinder Morg▇▇ ▇.▇., Inc. to Kind▇▇ ▇▇▇▇▇▇ ▇▇▇rgy Partners, L.P. or its operating limited partnerships in accordance with their respective limited partnership agreements;
(i) amend its Restated Certificate of Incorporation or Bylaws or the charter or bylaws or organizational documents of any of its Subsidiaries; (ii) split, combine or reclassify the outstanding shares of its capital stock or declare, set aside or pay any dividend payable in cash (other than dividends in an amount not to exceed $10 million payable as a result, directly or indirectly, of quarterly distributions from Kind▇▇ ▇▇▇▇▇▇ ▇▇▇rgy Partners, L.P. received through Kinder Morg▇▇ ▇.▇., ▇▇c. consistent with past practice, whether such dividends are paid directly after receipt or are paid by borrowings, subject to this Agreement, after repayment of 35 42 indebtedness), stock or property or make any other distribution with respect to such shares of capital stock or other ownership interests; (iii) redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or other ownership interests; or (iv) sell or pledge any stock of any of its Subsidiaries;
(d) (i) issue or sell or agree to issue or sell any additional shares of, or grant, confer or award any options, warrants or rights of any kind to acquire any shares of, its capital stock of any class; (ii) enter into any agreement, contract or commitment out of the ordinary course of its business, to dispose of or acquire, or relating to the disposition or acquisition of, a segment of its business; (iii) except in the ordinary course of business consistent with past practice, sell, pledge, dispose of or encumber any material amount of assets (including without limitation, any indebtedness owed to them or any claims held by them); or (iv) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or acquire any material amount of assets (other than in the ordinary course of business consistent with past practice) or make any material investment, either by purchase of stock or other securities, or contribution to capital, in any case, in any other Person (other than a Subsidiary of the Company as of the date hereof);
(e) except as required by law, grant any severance or termination pay (other than pursuant to policies or agreements in effect on the date hereof as disclosed in the Company SEC reports or set forth in Section 5.1(e) of the Company Disclosure Schedule) or increase the benefits payable under its severance or termination pay policies or agreements in effect on the date hereof or enter into any employment (other than "at will") or severance agreement with any officer, director or employee;
(f) except as required by law, adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of any director, officer or employee or increase in any manner the compensation or fringe benefits of any director, officer or, except in the ordinary course of business consistent with past practice, employee, or grant, confer, award or pay any forms of cash incentive, bonuses or other benefit not required by any existing plan, arrangement or agreement;
(g) enter into or modify any collective bargaining agreement, other than in replacement of collective bargaining agreements expiring prior to the Effective Time;
(h) make any material change in its tax or accounting policies or any material reclassification of Assets or liabilities except as required by law, rule or regulation or GAAP;
(i) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except the payment, discharge or satisfaction of (i) liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with the terms thereof as in effect on the date hereof or (ii) claims settled or compromised to the extent permitted by Section 5.1(j), or waive, release, grant or transfer any rights of material value or modify or change in any material respect any existing Company Contract, in each case other than in the ordinary course of business consistent with past practice;
(j) settle or compromise any litigation, other than litigation not in excess of amounts reserved for in the most recent consolidated financial statements of the Company included in the Company SEC Reports or, if not so reserved for, in an aggregate amount not in excess of $500,000, provided in either case such settlement documents do not involve any material non- monetary obligations on the part of the Company and its Subsidiaries;
(k) take any action (without regard to any action taken or agreed to be taken by Parent or any of its affiliates) with knowledge that such action would prevent the Merger from qualifying as a reorganization within the meaning of Sections 5.2(b368(a)(1)(A) or 368(a)(2)(E) of the Code;
(l) consummate any acquisition or disposition pursuant to any Company Contract disclosed pursuant to Section 4.18 other than in accordance with the terms so disclosed (including without waiver of any condition to the Company's obligations to consummate such acquisition), excluding insignificant deviations from such terms;
(m) engage in any activities which would cause a change in its status, or that of its Subsidiaries, under the 1935 Act, or that would impair the ability of the Parent to claim an exemption as of right under Section 3(a)(1) of the 1935 Act; and
(n) take, or offer or propose to take, or agree to take in writing or otherwise, any of the actions described in Sections 5.1(a) through 5.1(m) or any action which would or is reasonably likely to result in (i) a material breach of any provision of this Agreement, (ii) any of the representations and 5.2(fwarranties of the Company set forth in this Agreement becoming untrue in any material respect or (iii) any of the conditions set forth in Article VII not being satisfied.
SECTION 5.2 Conduct of Parent's Business Pending the Merger. Except as set forth in Section 5.2 of the Parent Disclosure Schedule, Parent covenants and agrees that, during the period from the date hereof to the Effective Time (except as otherwise contemplated by the terms of this Agreement), unless the Company shall otherwise agree in writing in advance, the businesses of Parent and its Subsidiaries shall be conducted only in the usual and ordinary course of business in substantially the same manner as heretofore conducted and in compliance with applicable laws; and Parent and its Subsidiaries shall each use all commercially reasonable efforts consistent with the foregoing to preserve substantially intact the business organization of Parent and its Subsidiaries, to keep available the services of the present officers and employees of Parent and its Subsidiaries (subject to prudent management of workforce needs and ongoing programs currently in force), to which this sentence shall not apply), a party preserve the present relationships of Parent and its Subsidiaries may take with customers, suppliers, distributors and other Persons with which Parent or any commercially reasonable actions that such party reasonably determines are necessary or of the Subsidiaries has significant business relations, to maintain and keep its material assets in good repair and condition (subject to ordinary wear and tear), to maintain supplies and inventories in quantities consistent with past practice and, with respect to any hedging and energy trading transactions, to comply with prudent for it policies, practices and procedures with respect to take or not take risk management and trading limitations, including the Company Trading Guidelines. Parent and its Subsidiaries will manage their commodity price risk exposure with respect to their respective gathering, processing, transportation and storage contracts in response accordance with prudent risk management guidelines to be developed and mutually agreed to by the Company and Parent as promptly as practicable after the date hereof. From time to time prior to the Pandemic Effective Time, Parent will allow the Company and its representatives reasonable access to the energy trading operations, as well as gathering, processing, transportation and storage contracting operations, of Parent and its Subsidiaries and their respective books and records, and develop appropriate procedures to permit the Company and its representatives to monitor Parent's and its Subsidiaries' compliance with the Company Trading Guidelines and the other risk management guidelines agreed to by the parties. The Company will not amend or rescind the Company Trading Guidelines or the Pandemic Measures; providedother risk management guidelines agreed to by the parties. By way of amplification and not limitation, that such party shall provide neither Parent nor any of its Subsidiaries shall, except as set forth in Section 5.2 of the Parent Disclosure Schedule and as otherwise contemplated by the terms of this Agreement, between the date of this Agreement and the Effective Time, directly or indirectly do, or propose or commit to do, any of the following without the prior notice to and consult in good faith with the other party to the extent such actions would otherwise require written consent of the Company:
(a) except as required by law, make or commit to make any capital expenditures (other party than reimbursable expenditures which are collected from third parties within 120 days of incurrence) in excess of 110% of those contained in Parent's 1999 budget provided to and approved by the Company prior to the date hereof, and for the fiscal year 2000 make any such expenditures in excess of those contained in Parent's 2000 budget which shall have been provided to and reasonably approved by the Company prior to incurring any such expenditures, other than (i) expenditures for routine maintenance and repair or (ii) unplanned capital expenditures due to emergency conditions, unanticipated catastrophic events or extreme weather;
(b) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than Parent or a wholly-owned Subsidiary of Parent or enter into any "keep well" or other agreement to maintain the financial condition of another Person (other than Parent or a wholly-owned Subsidiary of Parent) or make any loans, or advances of borrowed money or capital contributions to, or equity investments in, any other Person (other than Parent or a wholly-owned Subsidiary of Parent) or issue or sell any debt securities, other than (i) refinancings or refundings of indebtedness existing as of the date hereof, (ii) in connection with financings or ordinary course trade payables and (iii) additional borrowings under this Section 5.1 existing lines of credit or Section 5.2.via commercial paper issuances in the ordinary course of business consistent with past practice in an amount such that total short-term indebtedness of Parent from these sources shall not exceed $700 million in the aggregate, provided that any of such additional indebtedness does not cause Parent's debt to be downgraded to below investment grade;
(i) amend its Restated Articles of Incorporation or Bylaws or the charter or bylaws of any of its Subsidiaries; (ii) split, combine or reclassify the outstanding shares of its capital stock or declare, set aside or pay any dividend payable in cash (other than (x) regular quarterly cash dividends of Parent in an amount not to exceed $0.20 per share of Parent Common Stock paid at such times and in such amounts as are consistent with past practices and in compliance with applicable law and (y) contract fees in connection with the PEPS Units); (iii) except for "cashless" exercises of Parent's Stock Rights pursuant to any of its Stock Plans, redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or other ownership interests; or (iv) sell or pledge any stock of any of its Subsidiaries;
(d) (i) Other than (w) pursuant to Parent's Stock Rights granted in the ordinary course of business consistent with past practice under any of Parent's Stock Plans, (x) the Thermo Agreements, (y) early settlement of the PEPS Units or (z) pursuant to Parent's DRIP Plan, issue or sell or agree to issue or sell any additional shares of, or grant, confer or award any options, warrants or rights of any kind to acquire any shares of, its capital stock of any class; (ii) enter into any agreement, contract or commitment out of the ordinary course of its business, to dispose of or acquire, or relating to the disposition or acquisition of, a segment of its business; (iii) except in the ordinary course of business consistent with past practice, sell, pledge, dispose of or encumber any material amount of Assets (including without limitation, any indebtedness owed to them or any claims held by them); or (iv) acquire (by merger, consolidation, acquisition of stock or Assets or otherwise) any corporation, partnership or other business organization or division thereof or acquire any material amount of Assets (other than in the ordinary course of business consistent with past pr
Appears in 1 contract
Sources: Merger Agreement (Kinder Richard D)
Covenants Relating to Conduct of Business. 5. 1Conduct Section 7.1 Conduct of Business Prior to by the Company Pending the Merger. From the date hereof until the Effective Time. During , unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, delayed or conditioned (provided that consent of Parent shall be deemed to have been given if Parent does not object within three (3) Business Days after a written request for such consent is provided by the period from Company to Parent), or except (i) as listed in Section 7.1 of the date of this Agreement to the Effective Time Company Disclosure Letter, (ii) as otherwise permitted by or earlier termination of provided for in this Agreement, except as expressly contemplated (iii) for payment by the Company or permitted by this Agreement any Company Subsidiary of any amounts (including as plus five percent (5%) of the amount set forth with respect to any particular line item listed therein) set forth in the 2017 and 2018 annual projection materials set forth in Section 7.1 of the Company Disclosure Schedule), Letter or (iv) as required by law Applicable Law or as consented to in writing by Purchaser (or, in the case of clause (b)Governmental Entities, the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause its each of the Company Subsidiaries to, (x) conduct its business in the ordinary course in all material respects of business and (y) use commercially reasonable efforts to maintain and preserve substantially intact its business organizationorganization and preserve in all material respects its relationships with any employees, customers, suppliers, vendors, licensors and licensees with which it has material business relations; provided, however, that no action by the services Company or the Company Subsidiaries with respect to matters specifically addressed by any provision of its employees Section 7.1(a) through (r) shall be deemed a breach of clauses (x) or (y) unless such action would constitute a breach of such specific provision. In addition to and its advantageous business relationshipswithout limiting the generality of the foregoing, and except (bA) except as expressly required listed in Section 7.1 of the Company Disclosure Letter, (B) as otherwise permitted by or provided for in this Agreement Agreement, (including as C) for payment by the Company or any Company Subsidiary of the amount with respect to a particular line item (plus five percent (5%) of the amount set forth with respect to such particular line item listed therein) set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to 2017 and 2018 annual projection materials set forth in writing by the other party, each Section 7.1 of the Company and Purchaser Disclosure Letter or (D) as required by Applicable Law or Governmental Entities, from the date hereof until the Effective Time, without the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned (provided that consent of Parent shall be deemed to have been given if Parent does not object within three (3) Business Days after a written request for such consent is provided by the Company to Parent) the Company shall not, and shall cause not permit any Company Subsidiary to:
(a) adopt or propose any change in its Constituent Documents;
(b) declare, authorize, establish a record date for, set aside or pay any stockholder dividend or other distribution (in cash, stock or other equity, property or a combination thereof), except for any dividend or distribution by a Company Subsidiary to the Company or a wholly-owned Company Subsidiary;
(i) subject to Section 7.1(e), merge or consolidate with any other Person, except that a Company Subsidiary may merge or consolidate with another Company Subsidiary as long as such merger or consolidation does not result in any material increase in Tax liabilities for the Company or for any Company Subsidiary (whether with respect to periods before the Closing or periods after the Closing), or (ii) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation or other reorganization, other than, with respect to the foregoing clause (ii), any mergers, consolidations or other reorganizations solely among the Company and its wholly-owned Subsidiaries or solely among its wholly-owned Subsidiaries;
(d) sell, lease, license or subject to an Encumbrance (other than a Permitted Encumbrance) or otherwise surrender, relinquish or dispose of any assets or property of the Company or any Company Subsidiary, other than (i) inventory in the ordinary course of business, (ii) in an amount not in excess of Twenty-Five Million Dollars ($25,000,000.00) individually or Fifty Million Dollars ($50,000,000.00) in the aggregate, (iii) in connection with obligations under Derivative Products or the sale or purchase of Derivative Products, or the purchase, exchange, sale, transportation or storage of gas, oil or other fuel or thermal or electric energy, capacity, ancillary services or Environmental Products in the ordinary course of business; provided that any individual transaction exceeding Seven Hundred Million Dollars ($700,000,000.00) (as determined in accordance with the Risk Management Policy of the Company) shall not be entered into without the consent in writing of Parent, which consent shall be deemed to have been given if Parent does not object within one (1) hour after the written notice requesting consent is provided by the Company to Parent, or (iv) disposals of any assets or property between or among (A) the Company and any of the wholly-owned Company Subsidiaries and (B) any wholly-owned Company Subsidiary and another wholly-owned Company Subsidiary;
(e) make any acquisition (including by merger) of (i) the equity interests or a material portion of the assets of any other Person or (ii) any other properties or assets of any other Person (other than the Company or any of the wholly-owned Company Subsidiaries) for consideration in excess of Fifteen Million Dollars ($15,000,000.00) individually or Thirty-Five Million Dollars ($35,000,000.00) in the aggregate, in each case of clause (i) or (ii), except for (A) acquisitions of supplies, parts, fuel, materials, other inventory, Environmental Products and capacity in the ordinary course of business, (B) capital expenditures made in accordance with Section 7.1(p) or (C) pursuant to Contracts in force on the date of this Agreement and set forth in Section 7.1(e) of the Company Disclosure Letter (as such Contracts are in effect on the date of this Agreement);
(f) adopt any shareholder rights plan, except if the Company Board determines that the failure to take such action would be inconsistent with the directors’ fiduciary duties to the stockholders of the Company under Applicable Law;
(g) (i) issue, sell, grant, pledge, transfer, dispose of, or otherwise encumber (or make payments based on the value of), or authorize the issuance, sale grant, pledge, transfer, disposal of, or Encumbrance on (or making of payments based on the value of), any shares of its capital stock or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or other security), other than (A) issuances of Common Shares in respect of Options, Restricted Stock Units or Performance Stock Units outstanding on the date hereof in accordance with their respective Subsidiaries not terms as in effect on the date hereof or (B) the creation of (x) transfer restrictions of general applicability on any securities of the Company imposed by Applicable Law or (y) Encumbrances securing indebtedness for borrowed money, or enter into any amendment of any term of any of its outstanding securities, (ii) split, combine, subdivide or reclassify any shares of capital stock or any other equity interests of the Company or any Company Subsidiary or (iii) purchase, repurchase or redeem or otherwise acquire any shares of capital stock or any other equity interests of the Company or any Company Subsidiary or any rights, warrants or options to acquire any such shares or interests, other than in connection with the exercise of Options or the vesting of Restricted Stock Units or Performance Stock Units pursuant to their terms as in effect on the date hereof (including in connection with any required withholding Taxes related to such exercise or vesting);
(h) (i) incur, guarantee or assume, or otherwise become liable for, or modify in any material respect the terms of, any indebtedness, (ii) issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities of the Company or any of the Company Subsidiaries, (iii) assume, guarantee, endorse or otherwise become liable for any indebtedness of any Person, (iv) make any loans, advances or capital contributions to, knowingly take or investments in, any action that Person, (v) enter into any arrangement having the economic effect of any of the foregoing, other than, so long as any of the following would not reasonably be expected to adversely affect lead to a Rating Event, (A) immaterial amounts in the ordinary course of business, (B) indebtedness for borrowed money in an amount not in excess of One Hundred Million Dollars ($100,000,000.00) in the aggregate, (C) any intercompany indebtedness, loan, advance, capital contribution or materially delay investment among the ability to obtain Company and/or any necessary approvals wholly-owned Company Subsidiary, (D) guaranties and credit support by (x) the Company of obligations of any Regulatory Agency wholly-owned Company Subsidiary or (y) any Company Subsidiary of obligations of the Company or a wholly-owned Company Subsidiary, in each case of this clause (D), in the ordinary course of business, (E) pursuant to the Debt Instruments and the Revolving Credit Agreement, (F) letters of credit issued in connection with the sale or purchase of Derivative Products, purchase, exchange, sale or transportation or storage of gas, oil or other Governmental Entity fuel or thermal or electric energy, capacity, ancillary services, Environmental Products, or in support of its retail operations or any other agreement allowed hereunder or otherwise in the ordinary course of business or (G) letters of credit issued to support positions in place as of the date of this Agreement;
(i) repay, redeem, repurchase, prepay, defease, cancel, any obligations for borrowed money or otherwise evidenced by bonds, debentures, notes, or other similar instruments other than, so long as any of the following would not reasonably be expected to lead to a Rating Event, (i) as required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything pursuant to the contrary terms thereof, (ii) existing indebtedness at or within three (3) months of maturity, or (iii) in an amount not in excess of One Hundred Million Dollars ($100,000,000.00) in the aggregate;
(j) enter into, amend or terminate any collective bargaining Contract or other Contract with a labor union, works council or similar organization;
(k) other than as required by the terms of any Company Benefit Plan in existence on the date of this Agreement, as contemplated by Section 4.3 or as set forth in Section 5.1 7.1(k) of the Company Disclosure Letter, (i) materially increase the compensation or Section 5.2 benefits of any director or executive officer of the Company (except for annual cash incentive grants and merit salary increases consistent with past practice), (ii) provide increases in salaries, wages, other compensation or benefits (and communicate increases in bonuses to the extent bonuses are based on salary or wage level) of (A) employees who are not executive officers or directors of the Company or (B) independent contractors of the Company or any Company Subsidiary, in each case, other than in the ordinary course of business, (iii) enter into any change-in-control, retention, employment, severance, termination or other similar Contract with, or grant any change-in-control, retention, severance, termination or similar compensation or benefits to, any executive officer, director, employee or independent contractor, (iv) establish, adopt, terminate or materially amend any Company Benefit Plan or any plan, program, arrangement, practice or Contract that would be a Company Benefit Plan if it were in existence on the date hereof, except to the extent that such amendment would not result in more than a de minimis increase to the cost to the Company under such arrangement or plan, (v) accelerate the time of payment or vesting of any compensation or benefits for any current or former employee, director or independent contractor of the Company or any of the Company Subsidiaries, (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan or (vii) pay or provide any compensation or benefit not required by the terms of any Company Benefit Plan as in effect on the date hereof to any current or former employee, director or independent contractor of the Company or any Company Subsidiary (other than Sections 5.2(bthe payment of base cash compensation in the ordinary course of business); provided, however, that the foregoing clauses (i) through (vii) shall not restrict the Company or any Company Subsidiary from (x) entering into or making available to newly hired employees or to employees in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, plans, Contracts, benefits and compensation arrangements providing for cash compensation and benefits (including cash incentive grants) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions or (y) continuing to make other cash awards in the ordinary course of business (including cash director awards that replace the value of equity director awards that would otherwise be granted and cash awards to employees that replace the value of equity employee awards that would otherwise be granted); provided, further, however, that notwithstanding clauses (i) and 5.2(f(ii) of this Section 7.1(k), to which this sentence the aggregate base salaries of employees of the Company and the Company Subsidiaries shall not apply)be increased by more than five percent (5%) of the aggregate base salaries in effect as of the date hereof;
(l) change any method of accounting or accounting principles or practices followed by the Company or any Company Subsidiary, except for any such change required by a party change in U.S. GAAP or as recommended by the Company’s audit committee or independent auditors;
(m) pay, discharge, settle, compromise, waive, release or satisfy any material litigation, arbitration, proceeding, claim, liability or obligation that would result in any liability in excess of Fifty Million Dollars ($50,000,000.00) in the aggregate or such greater amount reserved therefor or reflected in the Company Reports or that would impose any non-monetary obligations on the Company or any of the Company Subsidiaries that would have a material effect on the continuing operations of the Company and its Subsidiaries may take the Company Subsidiaries, taken as a whole;
(n) fail to maintain, terminate or cancel any commercially reasonable actions that insurance coverage maintained by the Company or any Company Subsidiary with respect to any material assets without replacing such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith coverage with the other party a comparable amount of insurance coverage to the extent available on commercially reasonable terms;
(o) (i) enter into any new Contract that would have been a Company Contract if it had been entered into prior to the date of this Agreement or (ii) amend, renew, extend, modify, waive, or release (or otherwise forego any material right or claim under) on terms materially adverse to the Company, cancel or terminate, in whole or in part, any Company Contract, in each case, other than in the ordinary course of business;
(p) make or authorize any new capital expenditures other than (i) capital expenditures related to operational emergencies, equipment failures or outages or required on an emergency basis or for the safety of persons or the environment; provided that (A) the Company shall provide Parent with notice of such actions would otherwise require consent action taken as soon as reasonably practicable thereafter (and in no event later than three (3) Business Days after such action is taken) and (B) such capital expenditures shall be made in accordance with Good Industry Practice, (ii) capital expenditures required by Applicable Law or Governmental Entities, or (iii) any other capital expenditures not in excess of Twenty-Five Million Dollars ($25,000,000.00) in the aggregate;
(q) make or change any material Tax election, file any material amended Tax Return, settle or compromise any material Tax audit or other proceeding, compromise or surrender any material Tax refund, credit or other similar benefit, change any material method of Tax accounting or make any material voluntary Tax disclosure or Tax amnesty or similar filing; or
(r) agree or commit to do any of the other party under this Section 5.1 or Section 5.2.foregoing. Notwithstanding anything herein to the
Appears in 1 contract
Sources: Merger Agreement (Calpine Corp)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except for matters set forth in Section 6.1 of Business Prior to the Effective Time. During LLC Disclosure Schedule, the period ARM Disclosure Schedule or otherwise expressly permitted or required by the terms of this Agreement or except as required by Applicable Law, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, except as expressly contemplated or permitted by this Agreement (including as set forth the LLC and ARM shall conduct its respective Businesses in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case Ordinary Course of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause its Subsidiaries to, conduct its business in the ordinary course in all material respects Business and use commercially reasonable best efforts to maintain and preserve keep intact its business organizationrespective Businesses, keep available the services of its their respective members, employees and agents and maintain its advantageous business relationshipsrelations and good will, and (b) except as expressly required by this Agreement (including as set forth in to the Company Disclosure Schedule or the Purchaser Disclosure Schedule)extent applicable, required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause preserve their respective Subsidiaries relationships with patients, doctors, customers, suppliers, licensors, licensees, distributors landlords, creditors, employees, agents and others having business relationships with it. The LLC shall not to, knowingly take any action that would result in any of the conditions to the purchase and sale of the LLC Interests set forth in Article VII not being satisfied. In addition (and without limiting the generality of the foregoing), except as set forth in Section 6.1 of the LLC Disclosure Schedule, the ARM Disclosure Schedule or otherwise expressly permitted or required by the terms of this Agreement or except as required by Applicable Law, neither the LLC nor ARM shall do any of the following without the prior written consent of Purchaser (which consent may not be unreasonably withheld):
(i) amend its articles of organization or operating agreement;
(ii) declare or pay any dividend or make any other distribution to its members whether or not upon or in respect of any of its membership interests or other equity interest;
(iii) issue any units, membership interests, or other equity interest or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any membership interests in the LLC or ARM, as applicable, or other equity interest;
(iv) adopt or amend any LLC Benefit Plan (or any plan that would be a LLC Benefit Plan if adopted) or enter into, adopt, extend (beyond the Closing Date), renew or amend any collective bargaining agreement or other Contract with any labor organization, union or association;
(v) except for the matters set forth in Section 6.1 of the LLC Disclosure Schedule or the ARM Disclosure Schedule, as applicable, establish or adopt any employee benefit plan or make any profit-sharing or similar payment to any of its directors, officers, employees or independent contractors;
(vi) pay any bonus, increase the amount of the wages, salary, commissions, fees, fringe benefits or other compensation or remuneration payable to, any of its members, employees or independent contractors, except for any items not in excess of $500 individually or $5,000 in the aggregate;
(vii) incur or assume any Liabilities, obligations or Indebtedness for borrowed money or guarantee any such Liabilities, obligations or Indebtedness, other than in the Ordinary Course of Business;
(viii) permit, allow or suffer any of its assets to become subjected to any Lien (other than Permitted Liens) of any nature whatsoever that is not set forth on Section 3.6 of the LLC Disclosure Schedule or Section 4.6 of the ARM Disclosure Schedule, as applicable, and would have been required to be set forth in Section 3.6 of the LLC Disclosure Schedule or Section 4.6 of the ARM Disclosure Schedule, as applicable, if existing on the date of this Agreement;
(ix) pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any of the Sellers or any Affiliates of any of the Sellers, except for the matters set forth in Section 3.9 of the LLC Disclosure Schedule or Sections 4.15 and 4.29 of the ARM Disclosure Schedule, as applicable;
(x) make any change in any method of accounting or accounting practice or policy (other than those required by GAAP, if applicable);
(xi) acquire by merging or consolidating with, or by purchasing 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 or otherwise acquire any assets (other than inventory) that are material;
(xii) make or incur capital expenditures that are not currently budgeted and that, in the aggregate, are in excess of $5,000;
(xiii) sell, lease, license or otherwise dispose of any of its assets that are material, individually or in the aggregate, to the LLC or ARM, as applicable, except inventory sold in the Ordinary Course of Business;
(xiv) enter into any lease of real property;
(xv) terminate any insurance policy in effect as of the date hereof or allow any material insurance policy to be terminated, in either case without using reasonable efforts to obtain a replacement insurance policy on comparable terms to the LLC or ARM, as applicable;
(xvi) form any subsidiary or acquire the equity of any Person;
(xvii) commence or settle any Proceeding;
(xviii) enter into any Contract, transaction or take any other action outside the Ordinary Course of Business;
(xix) enter into any transaction or take any other action that the LLC knows will cause or constitute a breach of any representation or warranty made by the Sellers in this Agreement;
(xx) discontinue the payment of its accounts payable that are payable in the Ordinary Course of Business or deviate from or alter any of its practices, policies or procedures in paying accounts payable other than in the Ordinary Course of Business;
(xxi) make any material modification to any material Contract or Permit; and
(xxii) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the LLC or ARM, as applicable, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the LLC or ARM, as applicable, or take other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would or could be reasonably expected to increase any Tax liability of the LLC or ARM, as applicable, by an amount in excess of $2,000 for any period ending after the Closing Date; and
(xxiii) agree, commit or offer (in writing or otherwise) to take any of the actions described in clauses “(i)” through “(xxii)” of this Section 6.1.
(b) In addition (and without limiting the generality of the foregoing), except as set forth in Section 6.1 of the LLC Disclosure Schedule, Section 6.1 of the ARM Disclosure Schedule or otherwise expressly permitted or required by the terms of this Agreement or except as required by Applicable Law, the LLC shall:
(i) promptly (but in any event, no later than three business days after the applicable matter or event) advise Purchaser in writing of the occurrence of any matter or event that (A) constitutes or would reasonably be expected to adversely affect constitute a LLC Material Adverse Effect or materially delay the ability ARM Material Adverse Effect, (B) resulted or would reasonably be expected to obtain any necessary approvals result in a material breach of any Regulatory Agency of representations and warranties set forth in Articles III or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under IV of this Agreement or (C) would reasonably be expected to (i) constitute a Seller Material Adverse Effect with respect to Sellers or (ii) 57 adversely affect the ability of the LLC to consummate the transactions contemplated hereby on by this Agreement;
(ii) confer with Purchaser concerning operational matters of a timely basis. Notwithstanding anything material nature and otherwise report periodically to Purchaser concerning the status of the Business, operations, and finances of the LLC;
(iii) use reasonable best efforts to maintain in full force and effect all Intellectual Property of the LLC;
(iv) comply with all Applicable Laws in the operation of the LLC’s Business;
(v) cooperate with the Purchaser and use its reasonable best efforts to cause the conditions to the contrary set forth Purchaser’s obligations to close specified in Section 5.1 Article VII below to be satisfied and execute and deliver such further instruments of conveyance and transfer and take such additional action as the Purchaser may reasonably request to effect, consummate, confirm or Section 5.2 evidence the transactions contemplated by this Agreement; and
(other than Sections 5.2(bvi) upon reasonable request, use reasonable best efforts to arrange meetings with such customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and 5.2(f), to which this sentence others having business relationships with it as the Purchaser shall not apply), a party reasonably designate in order that the Purchaser and its Subsidiaries the LLC may take any commercially reasonable actions that confer with such party reasonably determines are necessary or prudent for it to take or not take in response to Persons regarding the Pandemic or LLC and ARM and the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent nature of the other party under transactions contemplated by this Section 5.1 or Section 5.2Agreement.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Paincare Holdings Inc)
Covenants Relating to Conduct of Business. 5. 1Conduct 4.1 Conduct of Business Prior to of Agouron Pending the Effective TimeMerger. During Agouron covenants and agrees that, during the period from the date hereof to the Effective Time, unless W▇▇▇▇▇-▇▇▇▇▇▇▇ shall otherwise agree in writing in advance, the businesses of Agouron and its Subsidiaries shall be conducted only in, and Agouron and its Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance with applicable laws; and Agouron and its Subsidiaries shall each use its commercially reasonable efforts to preserve substantially intact the business organization of Agouron and its Subsidiaries, to keep available the services of the present officers, significant employees and consultants of Agouron and its Subsidiaries and to preserve the present relationships of Agouron and its subsidiaries with such of the customers, suppliers, licensors, licensees, or distributors with which Agouron or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, neither Agouron nor any of its Subsidiaries shall, between the date of this Agreement to and the Effective Time or earlier termination of this AgreementTime, except as expressly contemplated or permitted by this Agreement (including as set forth in Section 4.1 of the Company Agouron Disclosure Schedule, directly or indirectly do, or propose or commit to do, any of the following without the prior written consent of W▇▇▇▇▇-▇▇▇▇▇▇▇, which consent shall not be unreasonably delayed (but may be withheld):
(a) Amend its Certificate of Incorporation or By-Laws or equivalent organizational documents;
(b) Issue, deliver, sell, pledge, dispose of or encumber, or authorize or commit to the issuance, sale, pledge, disposition or encumbrance of, (A) any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including but not limited to stock appreciation rights or phantom stock), required by law of Agouron or as consented any of its Subsidiaries (except for the issuance of up to in writing by Purchaser 6,108,552 shares of Agouron Common Stock issuable upon exercise of outstanding options granted under the Agouron Stock Option Plans) or (orB) any assets of Agouron or any of its Subsidiaries, except for sales of products and payments made pursuant to existing contracts in the case ordinary course of clause business and in a manner consistent with past practice;
(bc) Declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) Reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) Acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or (except for the purchase of inventory in the ordinary course of business) any assets; (ii) transfer, lease, mortgage, or otherwise dispose of or subject to any lien any of its assets (including capital stock of Subsidiaries), (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees for purchase orders made in the Companyordinary course of business) or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to, or investments in, any other person (such other than borrowings incurred with the prior written consent of W▇▇▇▇▇-▇▇▇▇▇▇▇ (which consent shall not to be unreasonably withheld, conditioned withheld or delayed), in an aggregate amount not to exceed $5,000,000); (aiv) Company shallenter into any material contract or agreement or enter into, or amend or terminate any joint venture arrangements; (v) enter into any agreement as licensee or licensor, (vi) enter into any commitments or transactions material, individually or in the aggregate, to Agouron and shall cause its Subsidiaries totaken as a whole; (vii) authorize any single capital expenditure which is in excess of $300,000 or capital expenditures which are, conduct in the aggregate, in excess of $750,000 for Agouron and its business Subsidiaries taken as a whole other than capital expenditures reflected in Agouron's fiscal 1998 budget, a copy of which has been delivered to W▇▇▇▇▇-▇▇▇▇▇▇▇; or (viii) enter into or amend (other than a non-material amendment) any contract, agreement, commitment or arrangement with respect to any of the matters set forth in this Section 4.1(e);
(f) Except to the extent required under this Agreement or under any existing employee and director benefit plans, agreements or arrangements as in effect on the date of this Agreement and previously delivered to W▇▇▇▇▇-▇▇▇▇▇▇▇, increase the compensation or fringe benefits of any of its directors, officers or employees, except for increases in salary or wages of employees of Agouron or its Subsidiaries in the ordinary course of business in all material respects accordance with past practice and use commercially reasonable efforts bonuses paid for fiscal year 1998 in accordance with Section 5.6(a) hereof, or grant any severance or termination pay not currently required to maintain and preserve intact its business organizationbe paid under existing severance plans or enter into, the services or amend, any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of Agouron or any of its employees and its advantageous business relationshipsSubsidiaries, and or establish, adopt, enter into or amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, welfare, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees;
(bg) except Except as expressly may be required by this Agreement (including as set forth a result of a change in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other partygenerally accepted accounting principles, each change any of the Company and Purchaser shall notaccounting practices or principles used by it;
(h) Take, and shall cause their respective or permit any of its Subsidiaries not toto take, knowingly take any action that (without regard to any action taken or agreed to be taken by W▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its affiliates) would reasonably prevent (x) W▇▇▇▇▇- ▇▇▇▇▇▇▇ from accounting for the business combination to be expected effected by the Merger as a pooling of interests or (y) the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(i) Make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, change any annual tax accounting period, change any method of Tax accounting, enter into any closing agreement relating to adversely affect any Tax, surrender any right to claim a Tax refund, or materially delay consent to any extension or waiver of the ability limitations period applicable to obtain any necessary approvals of Tax claim or assessment;
(j) Settle or compromise any Regulatory Agency pending or other Governmental Entity required for threatened suit, action or claim which is material or which relates to the transactions contemplated hereby hereby;
(k) Adopt a plan of complete or to perform partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Agouron or any of its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 Subsidiaries (other than Sections 5.2(bthe Merger);
(l) and 5.2(fPay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), to which this sentence shall not apply)other than the payment, a party discharge or satisfaction, in the ordinary course of business and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary consistent with past practice, of liabilities reflected or prudent for it to take reserved against in the financial statements of Agouron or not take incurred in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to ordinary course of business and consult in good faith consistent with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2.past practice;
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct Section 6.1 Conduct of the Business of the Acquired Companies Prior to Closing. Except as set forth on Schedule 6.1 or as otherwise expressly permitted by this Agreement or the Effective Time. During the period Employment Agreement, from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b)Closing Date, the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shallAcquired Companies will, and shall the Shareholders will cause its Subsidiaries the Acquired Companies to, conduct its business the Business in the ordinary course in all material respects Ordinary Course of Business, and will use commercially reasonable efforts to maintain and preserve intact its business organizationthe Business, keep available the services of its current officers and employees and keep and maintain its advantageous relationships with customers, suppliers, licensors, licensees, distributors and other third parties with the Acquired Companies with the goal that the Acquired Companies’ goodwill and ongoing business relationshipsbe unimpaired at the Closing Date. In addition, and without limiting the generality of the foregoing, except as otherwise expressly permitted by this Agreement, from the date of this Agreement to the Closing Date, each Acquired Company covenants and agrees that it will not do or permit or cause to occur any of the changes or events set forth in Section 4.11 or any of the following without the prior written consent of Parent:
(a) issue, deliver, sell or grant (i) any shares of its capital stock, (ii) any securities convertible into or exchangeable for, or any options, warrants to purchase or rights to subscribe for, any such shares, voting securities or convertible or exchangeable securities, (iii) any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or (iv) enter into an agreement to do any of the foregoing;
(b) (i) grant to any employee, officer or director of any Acquired Company any increase in compensation, including, without limitation, bonus opportunity, except to the extent required under employment agreements in effect as expressly required by this Agreement (including as set forth of the date hereof or applicable Law, other than in the Ordinary Course of Business, (ii) grant to any employee, officer or director of any Acquired Company Disclosure Schedule any increase in severance or termination pay, except to the Purchaser Disclosure Scheduleextent required under any agreement in effect as of the date hereof or applicable Law, (iii) enter into any employment, consulting, indemnification, severance or termination agreement with any such employee, officer or director, (iv) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or Company Employee Plan or (v) take any action to accelerate any rights or benefits, or make any determinations not in the Ordinary Course of Business, under any collective bargaining agreement or Company Employee Plan;
(c) (i) incur any Indebtedness, issue or sell any debt securities or warrants or other rights to acquire any debt securities of any Acquired Company, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the Ordinary Course of Business or (ii) make any loans, advances or capital contributions to, or investments in, any other Person (other than to any Acquired Entity, Subsidiary or Acquired Company);
(d) make, change or rescind any election in respect of Taxes, file any Tax Return (without prior opportunity for Parent to review and comment thereon in accordance with Section 8.1) or any amendment to a Tax Return (without prior opportunity for Parent to review and comment thereon), required by law enter into any closing agreement, settle any claim or as consented assessment in respect of any amount of Taxes, or consent to in writing by the other party, each any extension or waiver of the Company and Purchaser shall notlimitation period applicable to any claim or assessment in respect of Taxes, and shall cause their respective Subsidiaries not toin each case, knowingly to the extent any such action would increase Parent’s or Merger Sub’s liability for Taxes in Post-Closing Tax Periods, or take any action or refrain from taking any action that would reasonably jeopardize any of the Acquired Companies’ qualification as an S Corporation within the meaning of Sections 1361 and 1362 of the Code (or any similar or comparable provision of state, local or foreign Law, as applicable);
(i) cancel any material Indebtedness (individually or in the aggregate) or waive any claims or rights or (ii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which any Acquired Company is a party;
(f) acquire by merging or consolidating with, or by purchasing assets of, or by any other manner, any Person or division, or business of or equity interest in any Person, except for purchases of inventory, components or supplies in the Ordinary Course of Business;
(g) sell, lease, or otherwise dispose of, or agree to sell, lease or otherwise dispose of, any of its assets, except for sales of inventory, components or supplies in the Ordinary Course of Business;
(h) renew or enter into any non-compete, exclusivity or similar agreement that would restrict or limit the operations of any Acquired Company, or, after the Closing, of Parent and its subsidiaries;
(i) settle or compromise any material litigation, or waive, release or assign any material claims;
(j) engage in any forward selling or acceleration of customer orders or contracts, any deferral in paying payables, any deferral in making capital expenditures that are necessary to maintain the fixed assets of any Acquired Company in the Ordinary Course of Business or any delay in capital projects that are necessary to maintain the fixed assets of any Acquired Company in the Ordinary Course of Business, any grant of any discount to customers or any other change in the terms of conditions of sale or purchase (including, without limitation, payment and delivery terms) other than in the Ordinary Course of Business or any other changes intended to increase the current income and cash collection of any Acquired Company prior to the Closing Date by accelerating revenue that would otherwise be collected after the Closing Date or deferring payment that would otherwise be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything be made prior to the contrary set forth in Section 5.1 Closing Date;
(k) fail to maintain insurance coverage at presently existing levels so long as such insurance is available at commercially reasonable rates; or
(l) authorize any of, or Section 5.2 (other than Sections 5.2(b) and 5.2(f), commit or agree to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to of, the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2foregoing actions.
Appears in 1 contract
Sources: Merger Agreement (Flowers Foods Inc)
Covenants Relating to Conduct of Business. 5. 1Conduct of Business Prior to the Effective Time. During the period from (a) From the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, Seller shall, and shall cause its Subsidiaries and other controlled Affiliates to, use commercially reasonable efforts to conduct the Business (except as expressly contemplated or permitted by this Agreement it relates to the Excluded Assets and Retained Liabilities) in all material respects in the ordinary course and to preserve in all material respects intact the Business, including relationships with suppliers, customers, distributors, employees, consultants and Governmental Entities with respect to the Business; except
(including i) as set forth in Section 5.2 of the Company Seller Disclosure Schedule), Schedules,
(ii) as required by law applicable Law,
(iii) as permitted pursuant to Section 5.6,
(iv) as otherwise contemplated or required by the terms of this Agreement,
(v) as otherwise consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed) or
(vi) for actions taken by Seller or any of its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 5.2.
(b) From the date of this Agreement to the Closing, Seller will not, and will cause each Seller Entity and each Purchased Entity not to, do any of the following with respect to the Business, the Purchased Entities, the Purchased Assets and/or the Assumed Liabilities without the prior consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) amend the Organizational Documents of any of the Purchased Entities;
(ii) split, combine or reclassify any Direct Purchased Entity Shares or any equity interests of any other Purchased Entity;
(iii) cause any of the Purchased Entities to declare, set aside or pay any non-cash dividend or non-cash distribution to any Person;
(iv) grant to any Business Employee any increase in compensation or benefits, except (A) as may be required under any Benefit Plan as in effect on the date hereof or any Collective Bargaining Agreement, (B) routine salary or base wage increases in the ordinary course of business that in any event are not in excess of 3% in the aggregate, or (C) in connection with promotions in the ordinary course of business (provided that the amount of any such increase is consistent with past practice);
(v) adopt, enter into or amend (other than administrative or de minimis amendments) any Purchased Entity Benefit Plan, except as may be required under any Benefit Plan or Collective Bargaining Agreement;
(vi) hire any new employee who would be a Key Employee (except to replace a Key Employee (on substantially the same terms) who terminates employment with the Seller Entities after the date of this Agreement or to fill an open position), or terminate the employment of any Key Employee (except for cause, as determined by Seller in good faith and in accordance with past practice and applicable Law);
(vii) enter into or amend any Collective Bargaining Agreement or, through negotiation or otherwise, make any binding commitment to any labor organization with respect to any Business Employees, except as required by applicable Law or in connection with renewals of Collective Bargaining Agreements that (A) are consistent with past practice or (B) do not increase aggregate costs to the Business by an amount materially greater than prevailing market practice in the applicable jurisdiction;
(viii) (A) issue or authorize the issuance of any equity interests of a Purchased Entity (other than to a Purchased Entity), (aB) Company shallgrant any options, warrants or other rights to purchase or obtain any equity interests of a Purchased Entity, (C) issue, sell or otherwise dispose of equity interests of a Purchased Entity or (D) redeem, repurchase or otherwise acquire any equity interests of any Purchased Entity;
(ix) cause or permit any Purchased Entity to (A) incur any Indebtedness for borrowed money, under letters of credit or in respect of Capitalized Leases other than in the ordinary course of business for amounts not exceeding $250,000 in aggregate principal amount, (B) make any acquisition of any material assets, or of any businesses, other than acquisitions of assets in the ordinary course of business, or (C) sell or dispose of or transfer ownership of any material assets or businesses, other than sales, dispositions or transfers of inventory in the ordinary course of business, and shall sales, dispositions or transfers of obsolete equipment in the ordinary course of business;
(x) enter into any Contract for the purchase of real property or lease (as lessee) of real property or exercise any option to extend any leases related to the Transferred Leased Property;
(xi) settle any Proceeding (other than a Tax Proceeding, subject to clause (xiii) below) other than, in the ordinary course of business, (A) solely for money damages that will be paid in full prior to the Closing or are included in the calculation of Working Capital or (B) Proceedings relating to ▇▇▇▇▇-▇▇▇▇▇▇ Act Paragraph IV Certifications settled in the ordinary course of business;
(xii) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law or are consistent with the Transaction Accounting Principles;
(xiii) (A) make (except in the ordinary course of business), change or revoke any material Tax election, (B) settle or compromise any material Tax liability for an amount materially in excess of the amount reserved or accrued on the Business Financial Statements, (C) change any annual Tax accounting period, (D) adopt (except in the ordinary course of business) or change any material method of Tax accounting, (E) file any amended income or other material Tax Return, (F) enter into any Tax closing agreement relating to any material Tax, (G) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment (except, in each case, in connection with any automatic or automatically granted extension to file any Tax Return), in each case of clauses of (A) through (G), except with respect to any Combined Tax Return or Taxes reported or required to be reported on a Combined Tax Return, (H) apply for or receive any Tax ruling from the ITA, or (I) take any position or action that would cause its Subsidiaries toany deemed or actual dividend to materially reduce earnings of the Israeli Purchased Entities generated in a Post-Closing Period (other than “zero tax” earnings);
(xiv) abandon, conduct its business dispose of or terminate ownership rights in any material Business Intellectual Property or otherwise permit any of their rights to any such Business Intellectual Property to lapse (other than in the ordinary course in all connection with the application for or maintenance of any Registered Intellectual Property to the extent Seller determines, consistent with reasonable business judgment, that such Registered Intellectual Property is no longer used or useful in any material respects and use commercially reasonable efforts respect in the conduct of the Business);
(xv) (A) amend, modify or, in a way that is materially adverse to maintain and preserve intact its Purchaser or the Business, waive any material right under, or voluntarily terminate or cancel, any Material Contract (other than, for the avoidance of doubt, any renewal or expiration of such Material Contract according to such Material Contract’s terms) or (B) enter into any Contract that, if in effect on the date of this Agreement, would have been a Material Contract, in each case in (A) or (B), other than in the ordinary course of business organizationor in connection with the implementation of a transaction that is permitted by any of clauses (i) through (xviii) of this Section 5.2(b);
(xvi) incur, create or assume any Lien on any material asset, other than in the ordinary course of business or Permitted Liens (other than with respect to any equity interests of the Purchased Entities);
(xvii) receive a Governmental Grant; or
(xviii) authorize any of, or commit or agree to take, whether in writing or otherwise, the services of its employees and its advantageous business relationshipsforegoing actions; except, and in each case, (bw) except as expressly required by this Agreement (including as set forth in Section 5.2 of the Company Seller Disclosure Schedule or the Purchaser Disclosure Schedule)Schedules, (x) as required by law applicable Law (y) as permitted pursuant to Section 5.6 or (z) as consented to in writing otherwise contemplated or required by the other party, each terms of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Agreement.
(c) Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b5.2(a) and 5.2(f)to the contrary, to which this sentence shall not apply), a party Seller and its Subsidiaries (including the Purchased Entities) may take any commercially reasonable actions that such party Seller reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic COVID-19 or the Pandemic Measures; COVID-19 Measures; provided, that such party Seller shall provide prior written notice to to, and consult with Purchaser in good faith with the other party to the extent such actions would otherwise require consent of Purchaser under Section 5.2(a).
(d) Purchaser covenants and agrees that, from the date of this Agreement to the Closing, Purchaser shall not, and shall cause its Affiliates not to, directly or indirectly, do any of the following:
(i) acquire or agree to acquire, by merger, consolidation, stock or asset purchase or otherwise, any business or corporation, partnership or other party under this Section 5.1 business organization or Section 5.2division thereof, or dissolve, merge or consolidate with any other Person, if such transaction would reasonably be expected to prevent, delay or impede the consummation of the Transaction or any other transaction contemplated by any Transaction Document; or
(ii) authorize any of, or commit or agree to take, whether in writing or otherwise, the foregoing actions.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (PERRIGO Co PLC)
Covenants Relating to Conduct of Business. 5SECTION 5.1 Conduct of the Company's Business Pending the Merger. 1Conduct of Business Prior to the Effective Time. During The Company covenants and agrees that, during the period from the date of this Agreement hereof to the Effective Time or earlier termination (except as otherwise contemplated by the terms of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to unless Parent shall otherwise agree in writing by Purchaser (or, in the case of clause (b)advance, the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause its Subsidiaries to, conduct its business in the ordinary course in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organization, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each businesses of the Company and Purchaser its Subsidiaries shall notbe conducted only in the usual and ordinary course of business in substantially the same manner as heretofore conducted and in compliance with applicable laws; and the Company and its Subsidiaries shall each use all commercially reasonable efforts consistent with the foregoing to preserve substantially intact the business organization of the Company and its Subsidiaries, to keep available the services of the present officers and employees of the Company and its Subsidiaries (subject to prudent management of workforce needs and ongoing programs currently in force), to preserve the present relationships of the Company and its Subsidiaries with customers, suppliers, distributors and other Persons with which the Company or any of the Subsidiaries has significant business relations, to maintain and keep its material assets in good repair and condition (subject to ordinary wear and tear), to maintain supplies and inventories in quantities consistent with past practice; provided, however, that, notwithstanding any of the foregoing, in no event shall cause their respective any of the Company's Subsidiaries not tobe restricted from taking any action, knowingly take nor shall they be required to obtain Parent's consent prior to taking such action, if Kinder Morg▇▇ ▇.▇., ▇▇c. believes the taking of that action to be in the best interests of Kind▇▇ ▇▇▇▇▇▇ ▇▇▇rgy Partners, L.P. and its unitholders; and provided, further, that the Company shall promptly notify Parent of any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything taken pursuant to the contrary immediately preceding proviso. By way of amplification and not limitation, neither the Company nor any of its Subsidiaries shall, except as set forth in Section 5.1 of the Company Disclosure Schedule and as otherwise contemplated by the terms of this Agreement, between the date of this Agreement and the Effective Time, directly or Section 5.2 indirectly do, or propose or commit to do, any of the following without the prior written consent of Parent:
(a) except as required by law, make or commit to make any capital expenditures (other than Sections 5.2(breimbursable expenditures which are collected from third parties within 120 days of incurrence) in excess of $1 million, other than (i) expenditures for routine maintenance and 5.2(frepair or (ii) unplanned capital expenditures due to emergency conditions, unanticipated catastrophic events or extreme weather;
(b) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than the Company or a wholly-owned Subsidiary of the Company or enter into any "keep well" or other agreement to maintain the financial condition of another Person (other than the Company or a wholly-owned Subsidiary of the Company) or make any loans, or advances of borrowed money or capital contributions to, or equity investments in, any other Person (other than the Company or a wholly-owned Subsidiary of the Company) or issue or sell any debt securities such that the debt of the Company shall be greater than $148.6 million plus any debt incurred to fund a required capital contribution by Kinder Morg▇▇ ▇.▇., Inc. to Kind▇▇ ▇▇▇▇▇▇ ▇▇▇rgy Partners, L.P. or its operating limited partnerships in accordance with their respective limited partnership agreements;
(i) amend its Restated Certificate of Incorporation or Bylaws or the charter or bylaws or organizational documents of any of its Subsidiaries; (ii) split, combine or reclassify the outstanding shares of its capital stock or declare, set aside or pay any dividend payable in cash (other than dividends in an amount not to exceed $10 million payable as a result, directly or indirectly, of quarterly distributions from Kind▇▇ ▇▇▇▇▇▇ ▇▇▇rgy Partners, L.P. received through Kinder Morg▇▇ ▇.▇., ▇▇c. consistent with past practice, whether such dividends are paid directly after receipt or are paid by borrowings, subject to this Agreement, after repayment of 42 indebtedness), stock or property or make any other distribution with respect to which this sentence shall such shares of capital stock or other ownership interests; (iii) redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or other ownership interests; or (iv) sell or pledge any stock of any of its Subsidiaries;
(d) (i) issue or sell or agree to issue or sell any additional shares of, or grant, confer or award any options, warrants or rights of any kind to acquire any shares of, its capital stock of any class; (ii) enter into any agreement, contract or commitment out of the ordinary course of its business, to dispose of or acquire, or relating to the disposition or acquisition of, a segment of its business; (iii) except in the ordinary course of business consistent with past practice, sell, pledge, dispose of or encumber any material amount of assets (including without limitation, any indebtedness owed to them or any claims held by them); or (iv) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or acquire any material amount of assets (other than in the ordinary course of business consistent with past practice) or make any material investment, either by purchase of stock or other securities, or contribution to capital, in any case, in any other Person (other than a Subsidiary of the Company as of the date hereof);
(e) except as required by law, grant any severance or termination pay (other than pursuant to policies or agreements in effect on the date hereof as disclosed in the Company SEC reports or set forth in Section 5.1(e) of the Company Disclosure Schedule) or increase the benefits payable under its severance or termination pay policies or agreements in effect on the date hereof or enter into any employment (other than "at will") or severance agreement with any officer, director or employee;
(f) except as required by law, adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of any director, officer or employee or increase in any manner the compensation or fringe benefits of any director, officer or, except in the ordinary course of business consistent with past practice, employee, or grant, confer, award or pay any forms of cash incentive, bonuses or other benefit not applyrequired by any existing plan, arrangement or agreement;
(g) enter into or modify any collective bargaining agreement, other than in replacement of collective bargaining agreements expiring prior to the Effective Time;
(h) make any material change in its tax or accounting policies or any material reclassification of Assets or liabilities except as required by law, rule or regulation or GAAP;
(i) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary except the payment, discharge or prudent for it to take satisfaction of (i) liabilities or not take obligations in response to the Pandemic ordinary course of business consistent with past practice or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith accordance with the other party terms thereof as in effect on the date hereof or (ii) claims settled or compromised to the extent such actions would otherwise require consent permitted by Section 5.1(j), or waive, release, grant or transfer any rights of material value or modify or change in any material respect any existing Company Contract, in each case other than in the ordinary course of business consistent with past practice;
(j) settle or compromise any litigation, other than litigation not in excess of amounts reserved for in the most recent consolidated financial statements of the Company included in the Company SEC Reports or, if not so reserved for, in an aggregate amount not in excess of $500,000, provided in either case such settlement documents do not involve any material non- monetary obligations on the part of the Company and its Subsidiaries;
(k) take any action (without regard to any action taken or agreed to be taken by Parent or any of its affiliates) with knowledge that such action would prevent the Merger from qualifying as a reorganization within the meaning of Sections 368(a)(1)(A) or 368(a)(2)(E) of the Code;
(l) consummate any acquisition or disposition pursuant to any Company Contract disclosed pursuant to Section 4.18 other party than in accordance with the terms so disclosed (including without waiver of any condition to the Company's obligations to consummate such acquisition), excluding insignificant deviations from such terms;
(m) engage in any activities which would cause a change in its status, or that of its Subsidiaries, under the 1935 Act, or that would impair the ability of the Parent to claim an exemption as of right under Section 3(a)(1) of the 1935 Act; and
(n) take, or offer or propose to take, or agree to take in writing or otherwise, any of the actions described in Sections 5.1(a) through 5.1(m) or any action which would or is reasonably likely to result in (i) a material breach of any provision of this Section 5.1 Agreement, (ii) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or Section 5.2(iii) any of the conditions set forth in Article VII not being satisfied.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct Section 6.1 Conduct of the Business of the Acquired Entities and Subsidiaries Prior to Closing. Except as set forth on Schedule 6.1 or as otherwise expressly permitted by this Agreement or the Effective Time. During the period Employment Agreements, from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b)Closing Date, the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shallAcquired Entities and Subsidiaries will, and shall the Equityholders will cause its the Acquired Entities and Subsidiaries to, conduct its business the Business in the ordinary course in all material respects Ordinary Course of Business and will use commercially reasonable efforts to maintain and preserve intact its business organizationthe Business, keep available the services of its current officers and employees and keep and maintain its advantageous relationships with customers, suppliers, licensors, licensees, distributors and other third parties with the Acquired Entities and Subsidiaries with the goal that the Acquired Entities’ and Subsidiaries’ goodwill and ongoing business relationshipsbe unimpaired at the Closing Date. In addition, and without limiting the generality of the foregoing, except as otherwise expressly permitted by this Agreement, from the date of this Agreement to the Closing Date, each Acquired Entity and Subsidiary covenants and agrees that it will not do or permit or cause to occur any of the changes or events set forth in Section 4.11 or any of the following without the prior written consent of Purchaser:
(a) issue, deliver, sell or grant (i) any shares of its capital stock, (ii) any securities convertible into or exchangeable for, or any options, warrants to purchase or rights to subscribe for, any such shares, voting securities or convertible or exchangeable securities, (iii) any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or (iv) enter into an agreement to do any of the foregoing;
(b) (i) grant to any employee, officer or director of any Acquired Entity or Subsidiary any increase in compensation, including, without limitation, bonus opportunity, except to the extent required under employment agreements in effect as expressly required by this Agreement (including as set forth of the date hereof or applicable Law, other than in the Ordinary Course of Business, (ii) grant to any employee, officer or director of any Acquired Entity or Subsidiary any increase in severance or termination pay, except to the extent required under any agreement in effect as of the date hereof or applicable Law, (iii) enter into any employment, consulting, indemnification, severance or termination agreement with any such employee, officer or director, (iv) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or Company Disclosure Schedule Employee Plan or (v) take any action to accelerate any rights or benefits, or make any determinations not in the Ordinary Course of Business, under any collective bargaining agreement or Company Employee Plan;
(c) (i) incur any Indebtedness, issue or sell any debt securities or warrants or other rights to acquire any debt securities of any Acquired Entity or Subsidiary, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the Ordinary Course of Business or (ii) make any loans, advances or capital contributions to, or investments in, any other Person (other than to any Acquired Entity, Subsidiary or Acquired Company);
(d) make, change or rescind any election in respect of Taxes, file any Tax Return (without prior opportunity for Purchaser Disclosure Scheduleto review and comment thereon in accordance with Section 8.1) or any amendment to a Tax Return (without prior opportunity for Purchaser to review and comment thereon), required by law enter into any closing agreement, settle any claim or as consented assessment in respect of any amount of Taxes, or consent to in writing by the other party, each any extension or waiver of the Company and Purchaser shall notlimitation period applicable to any claim or assessment in respect of Taxes, and shall cause their respective Subsidiaries not toin each case, knowingly to the extent any such action would increase Parent’s or Purchaser’s liability for Taxes in Post-Closing Tax Periods, or take any action or refrain from taking any action that would reasonably jeopardize any of the Acquired Corporations’ qualification as an S Corporation within the meaning of Sections 1361 and 1362 of the Code (or any similar or comparable provision of state, local or foreign Law, as applicable);
(e) (i) cancel any material Indebtedness (individually or in the aggregate) or waive any claims or rights or (ii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which any Acquired Entity or Subsidiary is a party;
(f) acquire by merging or consolidating with, or by purchasing assets of, or by any other manner, any Person or division, or business of or equity interest in any Person, except for purchases of inventory, components or supplies in the Ordinary Course of Business;
(g) sell, lease, or otherwise dispose of, or agree to sell, lease or otherwise dispose of, any of its assets, except for sales of inventory, components or supplies in the Ordinary Course of Business;
(h) renew or enter into any non-compete, exclusivity or similar agreement that would restrict or limit the operations of any Acquired Entity or Subsidiary, or, after the Closing, of Purchaser and its subsidiaries;
(i) settle or compromise any material litigation, or waive, release or assign any material claims;
(j) engage in any forward selling or acceleration of customer orders or contracts, any deferral in paying payables, any deferral in making capital expenditures that are necessary to maintain the fixed assets of any Acquired Entity or Subsidiary in the Ordinary Course of Business or any delay in capital projects that are necessary to maintain the fixed assets of any Acquired Entity or Subsidiary in the Ordinary Course of Business, any grant of any discount to customers or any other change in the terms of conditions of sale or purchase (including, without limitation, payment and delivery terms) other than in the Ordinary Course of Business or any other changes intended to increase the current income and cash collection of any Acquired Entity or Subsidiary prior to the Closing Date by accelerating revenue that would otherwise be collected after the Closing Date or deferring payment that would otherwise be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything be made prior to the contrary set forth in Section 5.1 Closing Date;
(k) fail to maintain insurance coverage at presently existing levels so long as such insurance is available at commercially reasonable rates; or
(l) authorize any of, or Section 5.2 (other than Sections 5.2(b) and 5.2(f), commit or agree to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to of, the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2foregoing actions.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as set forth in Section 5.2 of Business Prior the Seller Disclosure Schedules or as required by applicable Law or as otherwise expressly contemplated by the terms of this Agreement, or to the Effective Time. During extent related to the period Excluded Assets, the Retained Liabilities or the Retained Businesses, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, and except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to Purchaser may otherwise consent in writing by Purchaser (or, in the case of clause (b), the Company) to (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company Seller shall, and shall cause each other Seller Entity and each Purchased Entity (and Subsidiary thereof) to, use reasonable best efforts to, and shall vote its Subsidiaries interest in any Purchased Ventures (to the extent any relevant matter is voted upon by the holders of interests in the applicable Purchased Venture and the organizational documents of the applicable Purchased Venture grant Seller or such other Seller Entity or Purchased Entity or Subsidiary thereof the right to vote on such matter) and take such other action to the extent within its control so as to cause such Purchased Venture to use reasonable best efforts to, conduct its business the Business in all material respects in the ordinary course in all material respects and use commercially reasonable efforts of business consistent with past practice; provided, however, that no action by Seller or its Affiliates with respect to maintain and preserve intact its business organization, the services matters specifically addressed by any other provision of its employees and its advantageous business relationships, and this Section 5.2 shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of such other provision.
(b) except as expressly required by this Agreement (including Except as set forth in Section 5.2 of the Company Seller Disclosure Schedule Schedules or as required by applicable Law or as otherwise expressly contemplated by the terms of this Agreement, or to the extent related to the Excluded Assets or the Purchaser Disclosure Schedule)Retained Liabilities, required by law or as consented from the date of this Agreement to in writing by the other partyClosing, each of the Company and Purchaser Seller shall not, and shall cause their respective Subsidiaries each Seller Entity and each Purchased Entity (and Subsidiary thereof) not to, knowingly and shall vote its interests in any Purchased Venture (to the extent any relevant matter is voted upon by the holders of interests in the applicable Purchased Venture or the organizational documents of the applicable Purchased Venture grant Seller or any Seller Entity or Purchased Entity or Subsidiary thereof the right to vote on such matter) and take such other action to the extent within its control so as to cause such Purchased Venture not to, in each case solely with respect to the Business, do any of the following without the prior consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) except as may be required under applicable Law or the terms of any Seller Benefit Plan as of the date hereof or in the ordinary course of business consistent with past practices, or in connection with any action that applies uniformly to Business Employees and other similarly situated employees of Seller or its Affiliates, (A) grant to any Business Employee who has a title of Vice President or above any increase in compensation or benefits or (B) adopt, enter into, amend, or terminate any Purchased Entity Benefit Plan;
(ii) (A) modify or amend the job duties or responsibilities of any Business Employee such that they no longer primarily provide services to or in connection with the Business, or (B) modify or amend the job duties of any non-Business Employee such that they commence primarily providing services to or in connection with the Business.
(iii) authorize or effect any amendment to, or change, the organizational documents of any Purchased Entity (or any Subsidiary thereof), or consent to any amendment to the organizational documents of any Purchased Venture;
(iv) enter into, materially amend or modify, or cancel or terminate any Collective Bargaining Agreement, other than entering into and renewals of Collective Bargaining Agreements on terms consistent with industry practice in the ordinary course of business;
(v) issue, sell, pledge, redeem, repurchase or transfer or propose to issue, sell, pledge, redeem, repurchase or transfer any equity interests of any of the Purchased Entities (or any of their Subsidiaries) or consent to the issuance, sale, pledge, redemption, repurchase or transfer of any Purchased Venture Interests, or securities convertible into, or exchangeable or exercisable for, or options with respect to, or warrants to purchase, or rights to subscribe for, equity interests of any of the Purchased Entities (or any of their Subsidiaries) or the Purchased Ventures (or any of their Subsidiaries), as applicable, in each case other than (A) to Seller, a Seller Entity or a Purchased Entity (or any of their respective Subsidiaries) or (B) the granting of Permitted Liens;
(vi) incur, create or assume any Lien, other than Permitted Liens, with respect to any asset of the Business other than (A) those that may be discharged at or prior to the Closing or (B) in the ordinary course of business consistent with past practice;
(vii) incur, create or assume, or consent to any Purchased Venture (or any Subsidiary thereof) incurring, creating or assuming, any indebtedness for borrowed money (including debt evidenced by loans, notes, bonds, debentures or other similar instruments) in excess of $2,000,000 in the aggregate, other than in the ordinary course of business or that will be settled at or prior to the Closing;
(viii) acquire any material assets, make any material investments in other Persons or dispose of any material assets of the Business, in each case, outside of the ordinary course of business consistent with past practice, other than (A) transactions where the amount of upfront consideration paid or transferred in connection with such transactions would not exceed $2,000,000 in the aggregate and (B) acquisitions or dispositions from or to Seller, a Seller Entity or a Purchased Entity (or any of their respective Subsidiaries);
(ix) (A) amend any material term of, or waive any material right under, fail to use reasonable efforts to enforce or voluntarily terminate (other than upon expiration in accordance with its terms), any Material Contract or Business Permit, or (B) enter into any Contract that, if in effect on the date hereof, would be a Material Contract (or make any Government Bid which, if accepted, would result in a Material Contract), other than, in each case of clauses (A) and (B), in the ordinary course of business consistent with past practice;
(x) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law;
(xi) implement any early retirement programs or other voluntary employee termination programs, or any other layoffs or schedule reductions that would require notice under the WARN Act;
(xii) sell, assign, transfer, license, dispose of, terminate, cancel or abandon any material right or material license in any Business Intellectual Property, in each case other than the grant of non-exclusive licenses in the ordinary course of business consistent with past practice;
(xiii) make any capital expenditures or commitments for capital expenditures in excess of $2,000,000 in the aggregate;
(xiv) settle or compromise any material Proceeding (other than any Proceeding in respect of Taxes or Tax matters) other than in the ordinary course of business to the extent such settlement or compromise imposes material ongoing restrictions on the operations of the Business;
(xv) terminate the coverage of any Business Insurance Policy (other than upon the expiration or exhaustion of such coverage in accordance with its terms);
(xvi) make any material change to its policies or practices regarding collection of accounts receivable or payment of accounts;
(xvii) make, change or revoke any Tax election, change any annual Tax accounting period, change any Tax accounting method, amend any Tax Return, enter into any closing agreement with any Taxing Authority in respect of Tax, settle any Tax claim or assessment, surrender any right to claim a Tax refund, or consent to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment (other than (A) automatic or automatically granted extensions or (B) extensions in connection with ongoing Tax Proceedings); in each case, except if such action would not reasonably be expected to adversely affect result in a material increase in the Tax liability of a Purchased Entity or materially delay any of its Subsidiaries following the ability Closing Date; or
(xviii) authorize any of, or commit or agree to obtain take, whether in writing or otherwise, or do any necessary approvals of any Regulatory Agency or other Governmental Entity required for of, the transactions contemplated hereby or to perform its respective covenants and agreements under foregoing actions.
(c) Nothing contained in this Agreement shall be construed to give to Purchaser, directly or indirectly, rights to consummate control or direct the transactions contemplated hereby on a timely basisBusiness’s operations prior to the Closing. Prior to the Closing, Seller (and its Affiliates) shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of the operations of the Business. Notwithstanding anything in this Agreement to the contrary set forth contrary, the Parties acknowledge and agree that nothing in Section 5.1 or this Section 5.2 (other than Sections 5.2(b) and 5.2(f), shall be deemed to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to limit the Pandemic transfer of the Excluded Assets or the Pandemic Measures; providedRetained Liabilities prior to, that such party shall provide prior notice to and consult in good faith with at or after the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2Closing.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct of Business Prior to the Effective Time. During the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except Except as (a) expressly contemplated or permitted by this Agreement (including as set forth in Section 5.01 of the Company Seller Disclosure Schedule)Letter, (b) required by law applicable Law, Judgment or as any Governmental Entity, (c) consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed) in writing or (d) otherwise expressly required by the terms of this Agreement (including the Reorganization Plan), (a) Company shallfrom the date of this Agreement to the Closing, and Seller shall cause its Subsidiaries to, the Companies to conduct its business the Business in the ordinary course in all material respects consistent with past practice and Seller shall use (and shall cause the Companies to use) commercially reasonable efforts to maintain and (i) preserve intact its the business organizationorganizations, operations and goodwill of the Business, (ii) maintain the present commercial relationships with material customers of the Business, the Significant Suppliers and other key Persons with whom the Companies do business, (iii) keep available the services of its employees and its advantageous business relationshipsthe present officers, consultants, key Employees of the Business, and any Employee of the Business or Service Provider identified on Exhibit G and (biv) maintain the properties and assets owned, operated or used by the Business in the same condition as they were on the date hereof, subject to normal wear and tear. In addition, except as (x) set forth in Section 5.01 of the Seller Disclosure Letter, (y) required by applicable Law, Judgment or any Governmental Entity or (z) otherwise expressly required by the terms of this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure ScheduleReorganization Plan), required by law or as consented from the date of this Agreement to in writing by the other partyClosing, each Seller shall not permit any Company to do any of the Company following (and Purchaser Seller shall not, and shall cause their respective Subsidiaries not permit any other member of the Seller Group to, knowingly take do any of the following as they relate to the Business) without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) amend its organizational documents;
(ii) (A) adjust, split, combine or reclassify any shares of capital stock or other Equity Interests, (B) directly or indirectly redeem, repurchase, retire or otherwise acquire any capital stock or other Equity Interests or (C) effect any recapitalization, reclassification, stock dividend, stock split or like change in the capitalization;
(iii) issue, deliver, sell or transfer any shares of its capital stock or other Equity Interests or any Company Stock Rights;
(iv) declare, set aside, issue, make or pay any dividend, distribution or other payment to its shareholders; provided, however, that (A) dividends and distributions of cash may be made by the Companies and other members of the Seller Group to Seller or an Affiliate of Seller and (B) payments in respect of intercompany indebtedness may be made by the Companies and the other members of the Seller Group to Seller or an Affiliate of Seller;
(v) except (A) as may be required under applicable Law, any employee benefit plans and agreements, including any Benefit Plan or Benefit Agreement, or any Collective Bargaining Agreement, as in effect as of the date of this Agreement or entered into after the date of this Agreement in compliance with this Agreement, (B) any increases for which Seller or its Affiliates (other than the Companies) shall be solely obligated, in which case, Seller shall promptly notify Purchaser regarding any such arrangement, provided that any such increases that will increase structural wages or rates to be paid by Purchaser following the Closing are not excepted by this clause (B), or (C) in the case of any action that would applies uniformly to Employees of the Business and similarly situated employees of Seller and its Affiliates and is not reasonably be expected to adversely affect result in a material increase in cost to Purchaser or its Affiliates on or after the Closing Date as compared to the costs in effect as of the date hereof, (1) adopt, amend, modify or terminate any Benefit Plan, Benefit Agreement or Collective Bargaining Agreement if such adoption, amendment, modification or termination would result in an increase in costs to Purchaser or materially delay limit operational flexibility on or after the ability Closing Date, or create or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Benefit Plan, Benefit Agreement or Collective Bargaining Agreement if it were in existence as of the date of this Agreement, (2) grant to obtain any necessary approvals Employee of the Business any increase in base salary, wages, bonuses or other incentive compensation, other than in the ordinary course of business in connection with a new hire or promotion based on job performance in each case, that is permitted under Section 5.01(vi), and which, in the case of increases granted in connection with a promotion based on job performance, will not exceed $50,000 per individual and $1,000,000 in the aggregate, (3) grant to any Employee of the Business any new, or increase any existing, change in control, retention, severance or termination pay, (4) issue, deliver, sell, pledge, encumber or grant any equity or equity-based awards to any Service Provider, (5) fund any rabbi trust or similar arrangement or otherwise secure funding for any Benefit Plan or Benefit Agreement, (6) effectuate any plant closing, relocation of work, or mass layoff that would incur any liability or obligation under the WARN Act, (7) grant or forgive any loans to an Employee of the Business (other than the grant of loans for travel and business expenses, in each case, in the ordinary course of business consistent with past practice, and which will not exceed $5,000 for any individual) or (8) negotiate or modify the terms of any Regulatory Agency new or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything successor Collective Bargaining Agreement;
(vi) (A) make any material change to the contrary management structure of the Companies, (B) hire any employee who is primarily dedicated to the Business and (i) has a title or the functional equivalent of Vice President or above, who would have an annual salary in excess of $125,000 or (ii) whose primary employment location is not located in the Territory, (C) terminate any Employee of the Business with the title or the functional equivalent of Vice President or above other than for cause, death or disability or (D) increase or decrease the aggregate headcount of any Specified Employee Group or the Business from its Scheduled Size by more than the allowable flex set forth in the Min/Max ∆ column for such Specified Employee Group or the Business as set forth in Section 5.1 9.06(b)(ix) of the Seller Disclosure Letter;
(vii) create, incur, assume or Section 5.2 guarantee any Indebtedness of the types described in any of clauses (i), (ii), (iv), (vi) or (viii) (as it relates to the foregoing) of the definition of “Indebtedness” in an aggregate amount in excess of $1,000,000, other than such Indebtedness (A) as will be repaid and extinguished at or prior to the Closing at no cost or liability to Purchaser or, from and after the Closing, any of the Companies or (B) that is owed by any Company to any other Company, as applicable;
(viii) voluntarily subject any of its properties or assets to any Lien (other than Sections 5.2(bany Permitted Lien) that would have been required to be set forth in Section 3.06, Section 3.07(a) or Section 3.07(b) of the Seller Disclosure Letter if existing on the date of this Agreement, other than such Liens as will be discharged at or prior to the Closing at no cost or liability to Purchaser or, from and 5.2(fafter the Closing, any of the Companies;
(ix) (A) loan or advance any amount to any third party (other than loans or advances to employees for travel and business expenses in the ordinary course of business consistent with past practice) or (B) enter into any agreement or arrangement with Seller or any of its Affiliates, except for intercompany transactions in the ordinary course of business and consistent with past practice that (1) are solely among or between the Companies or (2) will be repaid, extinguished or terminated at or prior to Closing at no cost or liability to Purchaser or, from and after the Closing, any of the Companies;
(x) make any change in any method of financial accounting or financial accounting practice, policy or procedure other than as may be appropriate to conform to changes in GAAP (or any interpretation thereof) after the date hereof or as may be required by changes in applicable Law after the date hereof;
(xi) acquire, by merging or consolidating with, or by purchasing a substantial portion of the properties or assets of, or by any other manner, any business or any Person or division thereof, or otherwise acquire any properties, interest in real property or assets, in each case, that is material to the Business;
(xii) sell, lease (as lessor), to which this sentence shall not applysublease (as sublessor), license (as licensor) or otherwise dispose of any real property or tangible asset used in the Business, individually or in the aggregate with other real property or tangible assets then being sold, leased, subleased, licensed or disposed of that is material to the Business;
(xiii) assign, sell, lease, license, dispose, cancel, abandon, grant rights to or fail to renew, maintain or diligently pursue applications for, or defend, any Intellectual Property rights;
(xiv) adopt or enter into any plan of complete or partial liquidation or dissolution;
(xv) assign, transfer, lease, sub-lease, cancel, fail to renew or fail to extend any Transferred Communications License or discontinue any service or operations that require prior regulatory approval for discontinuance;
(xvi) compromise, settle or agree to settle any Proceeding related to the Business or any Company in a party manner which imposes on the Business or any Company (A) injunctive relief or other non-monetary relief that would impose any restriction on the operations of the Business following the Closing (excluding any commitments made by Seller or any of its Affiliates in routine regulatory and/or compliance filings made to any Governmental Entity that result in immaterial process changes such as additional or modified ordinary course disclosure notices being required to be sent to customers), (B) a criminal violation or (C) monetary liability in excess of $1,000,000 individually or in the aggregate with any related claims; provided that Seller and its Subsidiaries Affiliates may take settle any commercially reasonable actions that such party reasonably determines are necessary claim if such settlement does not provide for any relief other than the payment of monetary damages, such payment is made by Seller or prudent for it to take or not take in response one of its Affiliates prior to the Pandemic Closing and the Companies receive a full and unconditional written release from all liabilities and obligations with respect to such claim;
(xvii) except as permitted by Section 5.01(a)(v), (A) modify, amend or renew in any material respect any Franchise, Material Company Contract or Real Property Lease, (B) enter into (x) a new Contract that would be binding on any Company or by which any of its properties or assets would be bound that would have been a Material Company Contract if such Contract has been entered into prior to the date of this Agreement, (y) any lease, sublease, license or agreement to use, occupy or dispose of real property or (z) a new Franchise or (C) terminate, waive, release or assign any rights under any Franchise, Material Company Contract or Real Property Lease, in each case, other than in the ordinary course of business consistent with past practice;
(xviii) except for any actions related to any Seller Consolidated Return or Seller Consolidated Group the effect of which is not material to the Business, (A) change any material Tax election, Tax practice or procedure, or Tax accounting method, (B) settle or compromise any material Tax claim, audit or assessment, enter into any closing agreement under Section 7121 of the Code (or any similar provision of state, local or non-U.S. Tax Law), (C) consent to an extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than an ordinary course extension of time to file Tax Returns), (D) file any material amended Tax Return (other than any Tax Returns with respect to sales Tax or property Tax amended in the ordinary course of business), (E) initiate any material voluntary Tax disclosure or (F) file or relinquish any claim for material Tax refunds;
(xix) enter into, or renew, any Contract that restricts the ability of the Companies or the Pandemic Measures; providedBusiness to compete with, or conduct, any business or line of business in any geographic area, or that such party shall provide prior notice grants any counterparty any exclusive right or right of first refusal;
(xx) grant any waiver under, amend, modify, surrender, revoke, permit to and consult lapse or otherwise terminate any Permits (other than any Transferred Communications License which are covered in good faith clause (xv) above) that are individually or in the aggregate material to the Business or the Companies (taken as a whole), other than in connection with the other party to discontinuation of any businesses or sale of assets otherwise permitted hereunder;
(xxi) transfer the extent such actions would otherwise require consent employment of any Employee of the other party under this Section 5.1 Business to any member of the Seller Group or Section 5.2transfer the employment of any employee of any member of the Seller Group to any of the Companies;
(xxii) (A) transfer any assets that would be Transferred Assets if the Closing occurred on the date hereof to a member of the Seller Group or otherwise move such assets out of the Territory or (B) cause the Companies to assume any liabilities that would be Excluded Liabilities if the Closing occurred on the date hereof; or
(xxiii) agree, authorize or commit, whether in writing or otherwise, to do any of the foregoing.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as (i) set forth in Section 5.2 of Business Prior to the Effective Time. During Seller Disclosure Schedules, (ii) required by applicable Law or Judgment (iii) otherwise contemplated by the period from the date terms of this Agreement to the Effective Time or earlier termination of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented iv) Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), from the date of this Agreement until the Closing (aor, (A) Company shallwith respect to a Deferred Jurisdiction, until such Deferred Closing and (B) with respect to the Business Employees, the Applicable Transfer Date, as applicable), Seller shall (and shall cause its Subsidiaries to, ) use reasonable best efforts to (A) conduct its business the Business in the ordinary course in all and (B) preserve substantially intact the Business and material respects relationships with Material Customers and use commercially reasonable efforts to maintain and preserve intact its business organization, the services Material Suppliers; provided that no action by Seller or any of its employees and its advantageous business relationships, and Affiliates with respect to matters specifically addressed by any other provision of this Section 5.2 shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of such other provision.
(b) except Except as expressly required by this Agreement (including as i) set forth in Section 5.2 of the Company Seller Disclosure Schedule Schedules, (ii) required by applicable Law or Judgment or (iii) otherwise contemplated by the Purchaser Disclosure Scheduleterms of this Agreement, solely with respect to the Business, from the date of this Agreement until the Closing (or, (A) with respect to a Deferred Jurisdiction, until such Deferred Closing and (B) with respect to the Business Employees, the Applicable Transfer Date, as applicable), required by law or as consented to in writing by the other party, each of the Company and Purchaser Seller shall not, and shall cause their respective Subsidiaries its Affiliates not to, knowingly do any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed); provided, that no action by Seller or any of its Affiliates with respect to matters specifically addressed by one provision of this Section 5.2(b) shall be deemed a breach of any other provision of Section 5.2(b) unless such action would constitute a breach of such first provision:
(i) except as may be required under any Benefit Plan set forth in Section 3.15(a) of the Seller Disclosure Schedules or under applicable Law, or in connection with any action that applies uniformly to Business Employees and other similarly situated employees of Seller or its Affiliates and does not impose any material increased costs on Purchaser in connection with the covenants in Section 5.6, (A) grant to any Business Employee any increase in compensation or benefits, other than (x) in the ordinary course of business consistent with past practice with respect to non-officer Business Employees whose annual base compensation does not exceed $200,000, (y) cost-of-living or merit-based increases in annual base salary or wage rate in the ordinary course of business consistent with past practice that do not exceed 5% individually and 5% in the aggregate or (z) increases to employee benefits that apply uniformly to Business Employees located in a jurisdiction and other similarly situated employees of Seller or its Affiliates located in the same jurisdiction in connection with the annual renewal process of Seller or any Affiliate thereof, (B) accelerate the vesting or time of payment of any compensation or benefits that would be a Liability of the Business, or (C) adopt, enter into, materially amend, or terminate any Assumed Employment Agreement (other than adopting, entering into, or materially amending an Assumed Employment Agreement in the ordinary course of business consistent with past practice in connection with any new hires or promotions otherwise permitted under this Section 5.2);
(ii) hire, engage or terminate the employment or engagement of any Business Employee with annual base compensation in excess of $150,000 (other than any termination for cause or due to permanent disability, provided that any such terminations shall be reflected in any updated Census provided in accordance with Section 5.6(a)(iii));
(iii) negotiate, enter into, amend or extend any collective bargaining agreement or other similar Contract with a Union or recognize or certify any Union as the bargaining representative for any Business Employees, in each case except as required by applicable Law;
(iv) take any action that would reasonably constitute a “mass layoff” or “plant closing” within the meaning of, or would otherwise trigger notice requirements or liability under, the Worker Adjustment Retraining and Notification Act of 1988, as amended, or any similar foreign, state or local Law (“WARN”) XE "WARN” \t “Section 5.2(b)(iv)” ;
(v) transfer internally (including in response to a request for transfer by a Business Employee), or otherwise materially alter the duties and responsibilities of, any Business Employee in a manner that would affect whether such service provider is or is not classified as a Business Employee, other than such actions that are taken in order to fill a vacancy in the ordinary course of business consistent with past practice;
(vi) except as may be expected to adversely affect required under any Benefit Plan or materially delay applicable Law or as otherwise would not become a Liability of Purchaser and its Affiliates upon the ability to obtain Closing, grant any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 deferred compensation, bonus (other than Sections 5.2(b) and 5.2(fin the ordinary course of business consistent with past practice), to which this sentence shall not applyequity or equity-based awards (other than in the ordinary course of business consistent with past practice), a party severance, or termination pay to any current or former Business Employee;
(vii) except for transactions among any of the Seller Entities and its Subsidiaries their respective Affiliates (including intercompany loans and other transactions related to treasury activities), sell, pledge, dispose of or encumber (other than any Permitted Lien) any of the Purchased Assets, other than (x) in the ordinary course of business and (y) sales, pledges, dispositions or encumbrances of the Purchased Assets as may take be required by applicable Law;
(viii) exercise any commercially reasonable actions that such party reasonably determines are necessary or prudent for it option to take or not take in response extend any leases related to the Pandemic Transferred Leased Property;
(ix) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division;
(x) sell, assign, transfer, license, fail to maintain, abandon, cancel, permit to lapse, or otherwise dispose of any Transferred IP, other than (A) non-exclusive licenses of such Transferred IP entered into with customers or service providers, resellers or distributors in the Pandemic Measures; providedordinary course of business, or (B) the abandonment, lapse or other disposition of any such Transferred IP rights at the end of their statutory life;
(xi) discharge, compromise, settle or release any Proceeding (which shall include any pending or threatened Proceeding), other any settlement or release that involves solely monetary damages not in excess of $250,000 without ongoing limitations on the conduct or operation of the Business and results in a full release of claims giving rise to such party shall provide prior notice Proceeding;
(xii) make any material change in any method of financial accounting or financial accounting practice or policy applicable to and consult in good faith the Business, other than such changes as are required by GAAP or applicable Law, or are consistent with the other party Transaction Accounting Principles;
(xiii) amend any non-Income Tax accounting principles, policies or practices; change any non-Income Tax election; materially amend or modify any non-Income Tax Return; enter into any closing agreement to the extent such actions agreement would otherwise require be binding on the Purchaser following the Closing; settle any claim or assessment with respect to a material amount of non-Income Taxes; or request or consent to any extension or waiver of the other party limitation periods applicable to any material claim or assessment with respect to non-Income Taxes that would be binding on the Purchaser following the Closing, in each case, solely with respect to the Purchased Assets or the Business;
(xiv) engage in any new line of business or discontinue any line of business or any material business operations;
(xv) except for any commitment that would constitute a Retained Liability, enter into any commitment for capital expenditures in excess of $250,000 for any individual commitment or $1,000,000 in the aggregate;
(xvi) terminate or materially modify, amend or waive any material right or material claim under any Material Contract described in clauses (i), (ii) and (iii) of the definition thereof;
(xvii) incur, assume or become liable in respect of any Indebtedness, 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, in each case, solely in respect of the Business and solely to the extent such Indebtedness would not be included in Estimated Closing Business Indebtedness, provided, that nothing in this Section 5.1 5.2(b)(xvii) shall prohibit the Seller Entities from refinancing or replacing the Seller Credit Facility and granting Liens in connection with such refinancing or replacement so long as all such Liens on the Purchased Assets are released at or prior to the Effective Time;
(xviii) terminate, suspend, amend or modify in any material respect, any Business Permit, except (A) as required by applicable Law or a Governmental Entity or (B) in the ordinary course of business consistent with past practice;
(xix) (A) accelerate or delay, in any material respect, collection of the accounts receivable of the Business relative to the time at which such accounts receivable otherwise would be collected as required by the applicable Contracts or (B) make any material change with respect to its policies or practices with respect to the modification of Contracts (including the cancellation of and replacement with a new Contract) in order to accelerate the billing and collection of accounts receivable;
(xx) adopt, maintain, amend or pay any sales plan, commission plan, bonus plan or other incentive-based compensation or similar performance metric that (A) is intended to, or reasonably expected to, incentivize personnel to shift consideration, bookings, revenue or contract value from the Business to the Retained Business, in each case, in a manner that reasonably would be expected to materially reduce the value of the Business as of the Closing, or (B) is inconsistent in any material respect with Seller’s obligation under Section 5.25.2(a), subject to the limitations therein, to use reasonable best efforts to preserve substantially intact the Business, but excluding, in each case of clause (A) and (B), the performance incentives listed on Section 5.2(b)(xx)(B) of the Seller Disclosure Schedules (or any “spiff” or similar performance incentives that are substantially similar to such incentives), or terminate or amend in a manner adverse to the Business the incentives listed on Section 5.2(b)(xx)(C) of the Seller Disclosure Schedules; or
(xxi) authorize any of, or commit or agree to take, whether in writing or otherwise, or do any of, the foregoing actions.
(c) Anything to the contrary in this Agreement notwithstanding, the parties hereto acknowledge and agree that nothing in this Section 5.2 shall be deemed to limit the transfer of Excluded Assets prior to, at or after the Closing.
(d) Anything to the contrary in this Agreement notwithstanding, the parties hereto acknowledge and agree that nothing in this Section 5.2 shall prohibit or otherwise restrict in any way the operation of the business of Seller or any of its Affiliates, except solely with respect to the conduct of the Business by Seller and any of its Affiliates.
(e) Seller shall establish and maintain an internal review process relating to Customer Contract renewals, which process is designed to monitor compliance with Seller’s obligations under Section 5.2(b)(xx) and with Seller’s obligations under Section 5.2(a) as it relates to Customer Contract renewals, which process shall include a review of discount levels by product, restacking or remixing activity, renewal acceleration and potential disparate treatment of different products, subject to reasonable materiality thresholds.
Appears in 1 contract
Sources: Asset Purchase Agreement (PTC Inc.)
Covenants Relating to Conduct of Business. 5. 1Conduct 4.1 Conduct of Business Prior to of Agouron Pending the Effective TimeMerger. During Agouron covenants and agrees that, during the period from the date hereof to the Effective Time, unless Warner-Lambert shall otherwise agree in writing in advance, the business▇▇ ▇▇ ▇▇▇▇▇▇▇ and its Subsidiaries shall be conducted only in, and Agouron and its Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance with applicable laws; and Agouron and its Subsidiaries shall each use its commercially reasonable efforts to preserve substantially intact the business organization of Agouron and its Subsidiaries, to keep available the services of the present officers, significant employees and consultants of Agouron and its Subsidiaries and to preserve the present relationships of Agouron and its subsidiaries with such of the customers, suppliers, licensors, licensees, or distributors with which Agouron or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, neither Agouron nor any of its Subsidiaries shall, between the date of this Agreement to and the Effective Time or earlier termination of this AgreementTime, except as expressly contemplated or permitted by this Agreement (including as set forth in Section 4.1 of the Company Agouron Disclosure Schedule), required by law directly or as consented indirectly do, or propose or commit to in writing by Purchaser (ordo, in any of the case following without the prior written consent of clause (b)Warner-Lambert, the Company) (such which consent shall not to be unreasonably withheld, conditioned or delayed), delayed (but may ▇▇ ▇▇▇▇▇▇▇▇):
(a) Company shallAmend its Certificate of Incorporation or By-Laws or equivalent organizational documents;
(b) Issue, and shall cause deliver, sell, pledge, dispose of or encumber, or authorize or commit to the issuance, sale, pledge, disposition or encumbrance of, (A) any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including but not limited to stock appreciation rights or phantom stock), of Agouron or any of its Subsidiaries to(except for the issuance of up to 6,108,552 shares of Agouron Common Stock issuable upon exercise of outstanding options granted under the Agouron Stock Option Plans) or (B) any assets of Agouron or any of its Subsidiaries, conduct its business except for sales of products and payments made pursuant to existing contracts in the ordinary course of business and in all material respects and use commercially reasonable efforts a manner consistent with past practice;
(c) Declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to maintain and preserve intact any of its capital stock;
(d) Reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) Acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organizationorganization or division thereof or (except for the purchase of inventory in the ordinary course of business) any assets; (ii) transfer, lease, mortgage, or otherwise dispose of or subject to any lien any of its assets (including capital stock of Subsidiaries), (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees for purchase orders made in the ordinary course of business) or endorse, or otherwise as an accommodation become responsible for, the services obligations of its employees any person, or make any loans, advances or capital contributions to, or investments in, any other person (other than borrowings incurred with the prior written consent of Warner-Lambert (which consent shall not be unreasonably withhel▇ ▇▇ ▇▇▇▇▇▇▇), in an aggregate amount not to exceed $5,000,000); (iv) enter into any material contract or agreement or enter into, or amend or terminate any joint venture arrangements; (v) enter into any agreement as licensee or licensor, (vi) enter into any commitments or transactions material, individually or in the aggregate, to Agouron and its advantageous business relationshipsSubsidiaries taken as a whole; (vii) authorize any single capital expenditure which is in excess of $300,000 or capital expenditures which are, in the aggregate, in excess of $750,000 for Agouron and its Subsidiaries taken as a whole other than capital expenditures reflected in Agouron's fiscal 1998 budget, a copy of which has been delivered to Warner-Lambert; or (bviii) except as expressly required by this Agreement enter into or amend (including as other than a non-▇▇▇▇▇▇▇▇ ▇▇▇▇dment) any contract, agreement, commitment or arrangement with respect to any of the matters set forth in this Section 4.1(e);
(f) Except to the Company Disclosure Schedule or the Purchaser Disclosure Schedule), extent required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or under any existing employee and director benefit plans, agreements or arrangements as in effect on the date of this Agreement and previously delivered to consummate Warner-Lambert, increase the compensation or fringe benefits of ▇▇▇ ▇▇ ▇▇▇ ▇▇rectors, officers or employees, except for increases in salary or wages of employees of Agouron or its Subsidiaries in the ordinary course of business in accordance with past practice and bonuses paid for fiscal year 1998 in accordance with Section 5.6(a) hereof, or grant any severance or termination pay not currently required to be paid under existing severance plans or enter into, or amend, any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of Agouron or any of its Subsidiaries, or establish, adopt, enter into or amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, welfare, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees;
(g) Except as may be required as a result of a change in law or in generally accepted accounting principles, change any of the accounting practices or principles used by it;
(h) Take, or permit any of its Subsidiaries to take, any action that (without regard to any action taken or agreed to be taken by Warner-Lambert or any of its affiliates) would prevent (x) Warner- ▇▇▇▇▇▇▇ ▇▇om accounting for the business combination to ▇▇ ▇▇▇▇▇▇▇▇ ▇▇ the Merger as a pooling of interests or (y) the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(i) Make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, change any annual tax accounting period, change any method of Tax accounting, enter into any closing agreement relating to any Tax, surrender any right to claim a Tax refund, or consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment;
(j) Settle or compromise any pending or threatened suit, action or claim which is material or which relates to the transactions contemplated hereby on hereby;
(k) Adopt a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 plan of complete or Section 5.2 partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Agouron or any of its Subsidiaries (other than Sections 5.2(bthe Merger);
(l) and 5.2(fPay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), to which this sentence shall not apply)other than the payment, a party discharge or satisfaction, in the ordinary course of business and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary consistent with past practice, of liabilities reflected or prudent for it to take reserved against in the financial statements of Agouron or not take incurred in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to ordinary course of business and consult in good faith consistent with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2.past practice;
Appears in 1 contract
Sources: Merger Agreement (Warner Lambert Co)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as (i) set forth in Section 5.2 of Business Prior to the Effective Time. During Seller Disclosure Schedules, (ii) required by applicable Law or Judgment or, (iii) expressly permitted, required or contemplated by the period from the date terms of this Agreement to the Effective Time or earlier termination of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law Section 5.13 and including under any provision of this Section 5.2) or as consented (iv) Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), from the date of this Agreement until the earlier of the Closing or the termination of this Agreement pursuant to Article VIII, Seller shall (a) Company shall, and shall cause its Subsidiaries each other Seller Entity and each Purchased Controlled Company to) use reasonable best efforts to (A) conduct the Business in all material respects in the ordinary course of business and (B) preserve substantially intact the Business, including the goodwill and current relationships of the Seller Entities and Purchased Controlled Companies with Material Customers, Material Suppliers, Governmental Entities and any other Persons with which they have material business dealings in connection with, in each case, solely with respect to the Business.
(b) Without limiting the generality of Section 5.2(a), except as (i) set forth in Section 5.2 of the Seller Disclosure Schedules, (ii) required by applicable Law or Judgment or (iii) expressly required or contemplated by the terms of this Agreement (including Section 5.13), from the date of this Agreement until the earlier of the Closing or the termination of this Agreement pursuant to Article VIII, Seller shall not do, shall cause each other Seller Entity and each Purchased Controlled Company not to do, and with respect to any Purchased Non-Consolidated Venture shall not (and shall cause each other Seller Entity and each Purchased Controlled Company not to) authorize or consent to, conduct solely to the extent that Seller, or such other Seller Entity or Purchased Controlled Company has the right, in its discretion, to authorize or consent to such actions, and subject to applicable Law or fiduciary duty, any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed), in each case, solely with respect to the Business:
(i) except as may be required under any Benefit Plan or Seller Labor Agreement, (A) grant or announce to any Business Employee who is, or who reports directly to, the President of the Residential & Light Commercial Business, any material increase in compensation or benefits (provided that, with respect to any grant or announcement of any material increase in compensation or benefits to any Business Employee who reports directly to one of the direct reports of the President of the Residential & Light Commercial Business, Seller shall reasonably promptly provide to Purchaser information with respect to such increase), (B) accelerate or take any action to accelerate the vesting or time of payment of any compensation or benefits or fund or in any other way secure the payment, of compensation or benefits under any Purchased Controlled Company Benefit Plan, (C) grant any new awards, or amend or modify the terms of any outstanding awards, held by any Business Employee or any former employee or Service Provider of any Purchased Controlled Company under any Purchased Controlled Company Benefit Plan, (D) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any Business Employee, or any former employee or Service Provider of any Purchased Controlled Company or (E) except in connection with any action in the ordinary course of business consistent with past practice that is not targeted at Business Employees and applies uniformly to Business Employees and other similarly situated employees of Seller or its Affiliates, become a party to, adopt, establish, enter into, commence participation in, materially amend or terminate any Purchased Controlled Company Benefit Plan or Seller Labor Agreement or any arrangement that would be a Purchased Controlled Company Benefit Plan or Seller Labor Agreement if in effect as of the date hereof, with respect to the Business Employees;
(ii) (A) hire or terminate (other than for cause or due to permanent disability) the employment of any Business Employee who is, or who reports directly to, the President of the Residential & Light Commercial Business (provided that, with respect to any hiring or termination of any Business Employee who reports directly to one of the direct reports of the President of the Residential & Light Commercial Business, Seller shall reasonably promptly provide to Purchaser information on any hiring or firing of any such Business Employees), (B) implement any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or other similar actions that trigger the WARN Act or any similar Law (other than in connection with enterprise-wide actions by Seller that do not adversely impact the value of the Business other than in a de minimis respect), (C) transfer the employment of, change the duties, authorities or responsibilities of, or take any other action (other than termination of employment) that would cause any employee of Seller and its Affiliates that is not a Business Employee to become, or that would cause a Business Employee to no longer be, a Business Employee, in each case, other than as contemplated by this Agreement or (D) voluntarily recognize or certify any new labor union, works council, bargaining representative, or any other similar organization as the bargaining representative for any Business Employee;
(iii) (A) authorize or effect any amendment to or change the organizational documents of any Purchased Company (including any Purchased Venture Governing Documents), whether by merger, consolidation or otherwise, or (B) split, combine or reclassify the outstanding equity interests of any Purchased Company;
(iv) (A) issue, sell, pledge or dispose of, or authorize the issuance, sale, pledge or disposal of, any equity interests of any Purchased Company (other than in connection with cash management practices in the ordinary course of business), (B) issue, sell, pledge or dispose of, or authorize the issuance, sale, pledge or disposal of any options, warrants, or other rights to purchase or obtain any of any equity interests of any Purchased Company or (C) redeem, repurchase or otherwise acquire any equity interests of any Purchased Company, in each case, other than to or from another Purchased Company or as contemplated by the Purchased Venture Governing Documents;
(v) except for the transactions among any of the Seller Entities, the Purchased Companies and their respective Affiliates (including intercompany loans and other transactions related to treasury activities) that will be extinguished prior to or at the Closing, incur or guarantee any Indebtedness for borrowed money by the Purchased Controlled Companies, other than (x) in the ordinary course of business, or (y) for an aggregate principal amount not exceeding $10,000,000;
(vi) acquire any assets outside of the ordinary course of business from any other third party with a value or purchase price in the aggregate in excess of $5,000,000;
(vii) make any acquisition of any businesses or any corporation, partnership, limited liability company, other business organization or division thereof or any equity interest therein by a Purchased Company in excess of $15,000,000, inclusive of any amounts or value potentially payable in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation (other than any capital expenditure, which is governed by Section 5.2(b)(xviii));
(viii) transfer, sell, license, lease, pledge, abandon, allow to lapse, dispose of or encumber (other than Permitted Liens) any assets, licenses, rights or businesses or interests therein of the Purchased Companies (in each case, other than with respect to Intellectual Property, which is governed by Section 5.2(b)(ix)) in excess of $15,000,000, other than (x) in the ordinary course of business (including with respect to inventory or obsolete property), or (y) sales, pledges, dispositions or encumbrances of businesses or assets to a Purchased Company;
(ix) sell, assign, license, sublicense, intentionally abandon, permit to lapse, transfer, dispose of or encumber (other than Permitted Liens) any Transferred IP or Controlled Business IP or, to the extent controlled by Seller, any of its Affiliates or any Purchased Controlled Company, any Other Business IP, in each case, that is material to the Business, other than (x) non-exclusive licenses and sub-licenses granted in the ordinary course of business, or (y) the abandonment, disposal, lapse or expiry of Intellectual Property at the end of the applicable statutory terms;
(x) grant any licenses, covenants not to sue or other rights in or to the Licensed IP that would conflict with the terms of the Trademark License Agreement or the Ducted Patent License Agreement, in each case, in the form annexed to this Agreement as of the date hereof;
(xi) acquire any interest in real property by a Purchased Controlled Company in excess of $5,000,000 or lease (as lessee) any real property or exercise any option to extend any Transferred Leases providing for annual payments in excess of $5,000,000;
(xii) commence, settle or compromise any Proceeding involving any Asset Selling Entity (in connection with the Business) or any Purchased Company other than Proceedings regarding Taxes, in each case, other than in the ordinary course of business for any Proceeding and, in the case of settlements or compromises, involving amounts of $5,500,000 or less as its sole remedy or otherwise relating to the Transaction, the Related Transaction or the transactions contemplated hereby;
(xiii) make any change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by changes in GAAP (or any interpretation thereof) or applicable Law;
(xiv) except for transactions among the Seller Entities, the Purchased Companies and their respective Affiliates, (A) terminate (excluding expiration), assign, materially modify or amend, or otherwise intentionally waive or release or assign any material right, claim or benefit under any Material Contract (to the extent related to the Business), in each case, other than in the ordinary course of business, (B) modify or amend any payment terms under any Material Contract with any Material Customer or Material Supplier other than in the ordinary course of business or (C) enter into a Contract if such Contract would have been a Material Contract obligating a Purchased Controlled Company as of the date of this Agreement other than in the ordinary course of business;
(xv) except for transactions among the Seller Entities, the Purchased Controlled Companies and their respective Affiliates (including intercompany debt arrangements and intercompany pledge arrangements for cash management purposes, and transactions pursuant to cash pooling arrangements) make any loans, advances or guarantees to, or investments in, any other Person in excess of $1,000,000 individually or $5,000,000 in the aggregate (excluding advances of expenses to employees in the ordinary course of business);
(xvi) merge or consolidate with any Person;
(xvii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or voluntarily file for bankruptcy with respect to any Purchased Company;
(xviii) amend or modify any Business Permit in any material respect, other than in the ordinary course of business or as required by a Governmental Entity;
(xix) incur any capital expenditures in excess of $5,000,000 individually or $10,000,000 in the aggregate, during any twelve (12)-month period payable by any Purchased Company, other than in accordance with the capital expenditure budget for the Business;
(xx) (A) cancel or terminate any Insurance Policies covering the Business, or (B) modify or reduce in any material respect any Insurance Policies covering the Business, in each case of clauses (A) and (B), in a manner that disproportionately modifies or reduces coverage for the Business relative to coverage for Seller;
(xxi) (A) make, change or revoke any material election related to Taxes, (B) settle, compromise or otherwise resolve any material Tax liability, (C) enter into any closing agreement related to Tax, (D) consent to any extension or waiver of the limitations period applicable to any claim or assessment in respect of Taxes (other than any automatic or customary extension or waiver obtained in the ordinary course), (E) file any amended income or other material Tax Return, (F) enter into any agreement dealing with Tax sharing, allocation, indemnity or distribution (other than any such agreement entered into in the ordinary course of business the primary subject matter of which does not relate to Taxes), (G) surrender any right or claim to a material refund of Taxes, (H) change tax residence, (I) except in connection with operating the business in the ordinary course in all material respects and use commercially reasonable efforts course, which for the avoidance of doubt would include expansion activities, create any office or fixed place of business or become subject to maintain and preserve intact its business organization, the services of its employees and its advantageous business relationships, and direct Tax (b) except as expressly required by this Agreement (including as set forth excluding any value added or similar Tax that arises solely because sales are made to customers in the applicable jurisdiction) in a country other than the country in which the relevant Purchased Controlled Company Disclosure Schedule is organized, or the Purchaser Disclosure Schedule)(J) change any taxable period or any material Tax accounting method, required by law or as consented to in writing by the other partyeach case, each of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take if any such action that would reasonably be expected to adversely affect have a non-de minimis impact on the Tax liability of the Purchaser, its Affiliates or materially delay the ability Purchased Controlled Companies for any taxable period ending after the Closing Date; or
(xxii) authorize any of, or commit or agree to obtain take, whether in writing or otherwise, or do any necessary approvals of any Regulatory Agency or other Governmental Entity required for of, the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything foregoing actions.
(c) Anything to the contrary in this Agreement notwithstanding, the parties hereto acknowledge and agree that nothing in this Section 5.2 shall be deemed to (i) limit the transfer, use or disposal of Excluded Assets prior to, at or after the Closing, (ii) limit the transfer, use or disposal of Cash Amounts prior to 11:58 p.m. on the Closing Date.
(d) Anything to the contrary in this Agreement notwithstanding, nothing in this Section 5.2 shall prohibit or otherwise restrict in any way the operation of the business of Seller or any of its Affiliates, except solely with respect to the conduct of the Business by Seller, any Seller Entity and the Purchased Companies.
(e) Anything to the contrary in Section 5.2(b) notwithstanding, in the event (i) a Purchased Non-Consolidated Venture takes or commits or agrees to take any of the actions set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f)(ii) Seller, each other Seller Entity and each Purchased Controlled Company have each complied with their respective obligations set forth in Section 5.18(b) related to which this sentence such Purchased Non-Consolidated Venture, any such actions shall not applybe included for purposes of calculating the applicable maximum aggregate dollar amount relating to such action set forth in Section 5.2(b), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (Johnson Controls International PLC)
Covenants Relating to Conduct of Business. 5SECTION 6.01. 1Conduct Conduct of Business Prior to by Monsoon. Except for matters (i) set forth in Section 6.01 of the Effective Time. During the period from the date of this Agreement to the Effective Time or earlier termination of this AgreementMonsoon Disclosure Letter, except as (ii) otherwise expressly contemplated or permitted by this Agreement and the other Transaction Documents, (including as set forth in the Company Disclosure Schedule), iv) required by law applicable Law or as (iv) consented to in writing by Purchaser (orIndigo Parent, from the date hereof to the Closing, Monsoon shall, and shall cause each Monsoon Subsidiary to, conduct its business in the case usual, regular and ordinary course in substantially the same manner as previously conducted and, to the extent consistent therewith, use reasonable best efforts to preserve intact its current business organization, maintain its material Governmental Approvals and Third Party Approvals, keep available the services of clause (b)its current officers and employees and keep its relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with it to the Company) (such end that its goodwill and ongoing business shall be unimpaired in any material respect at the Closing. In addition, and without limiting the generality of the foregoing, except for matters set forth in Section 6.01 of the Monsoon Disclosure Letter or otherwise expressly permitted by this Agreement and the other Transaction Documents or required by applicable Law, from the date hereof to the Closing, Monsoon shall not, and shall not permit any Monsoon Subsidiary to, do any of the following without the prior written consent of Indigo Parent, which shall not to be unreasonably withheld, conditioned or delayed), :
(a) Company shall(i) declare, set aside or pay any dividends or other distributions in respect of its shares of Capital Stock, other than dividends and shall cause distributions by any direct or indirect wholly-owned Monsoon Subsidiary to its Subsidiaries parent, (ii) split, combine or reclassify any of its Capital Stock, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its shares of Capital Stock, other than any such transaction by a direct or indirect wholly-owned Monsoon Subsidiary which remains a direct or indirect wholly-owned Monsoon Subsidiary after consummation of such transaction, or (iii) purchase, redeem or otherwise acquire or amend the terms of any shares of its Capital Stock or any rights, warrants, options or other equity awards to acquire, directly or indirectly, any such shares of Capital Stock;
(b) issue, deliver, sell or grant (i) any of its shares of Capital Stock or (ii) any Voting Monsoon Debt or Monsoon Securities (including any Monsoon Options, Monsoon Restricted Stock Units and any other rights, warrants, options or other equity awards to acquire, directly or indirectly, any of its shares of Capital Stock), in each case other than (A) the issuance of Monsoon Ordinary Shares upon the exercise or settlement of Monsoon Options or Monsoon Restricted Stock Units outstanding on the date hereof and in accordance with their terms, (B) the issuance of Monsoon Ordinary Shares upon the conversion of the Convertible Notes and (C) any such transaction by a wholly-owned Monsoon Subsidiary which remains a wholly-owned Monsoon Subsidiary after consummation of such transaction;
(c) amend its certificate or articles of incorporation or constitution or comparable organizational documents;
(d) acquire or dispose of, including by entering any lease or option Contract with respect to, conduct its business any interests in real property, except for (i) acquisitions or dispositions in the ordinary course of business consistent with past practice and (ii) the expiration of any lease or option Contract in all accordance with the terms of such Contract;
(e) acquire, in a single transaction or a series of related transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any partnership, corporation, joint venture, limited liability entity or other business organization or division thereof or any other Person (in each case, other than any acquisition of interests in real property permitted under Section 6.01(d)), with a value or purchase price that, individually or in the aggregate, exceeds $3,000,000, except for acquisitions in the ordinary course of business consistent with past practice of assets used in the operation or conduct of the Monsoon Business;
(f) sell, transfer or otherwise dispose of, including by entering any license or lease with respect to, in a single transaction or a series of related transactions, any property or asset (in each case, other than sales, transfers or dispositions of interests in real property permitted under Section 6.01(d)) with a value or purchase price that, individually or in the aggregate, exceeds $3,000,000 or sell, transfer or otherwise dispose of, any material respects property or asset below its book value, in each case except for (i) dispositions of obsolete or worn-out assets that are no longer used or useful in the operation or conduct of the Monsoon Business, (ii) non-exclusive licenses of Intellectual Property Rights entered into in the ordinary course of business consistent with past practice with customers or distributors of Monsoon or its Subsidiaries and use commercially reasonable efforts to maintain and preserve intact its business organization, the services of its employees (iii) transactions among Monsoon and its advantageous business relationshipswholly-owned Subsidiaries or among Monsoon’s wholly-owned Subsidiaries;
(g) (i) establish, and (b) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule adopt, enter into, terminate or the Purchaser Disclosure Schedule)amend, required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect accelerate the vesting or materially delay the ability to obtain any necessary approvals payment of any Regulatory Agency compensation or other Governmental Entity benefits under, any material Monsoon Benefit Plan, (ii) grant to any executive officer or director of Monsoon any material increase in compensation or benefits, or (iii) grant to or increase any change in control, retention, severance or termination pay to or for any Monsoon Employee, except, in each case subject to Section 6.01(b), (A) as required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything pursuant to the contrary terms of a Monsoon Benefit Plan as in effect on the date hereof or (B) increases in salaries and wages not in excess of 10% of the applicable Monsoon Employee’s annual base salary and wages as in effect on the date hereof or otherwise made in the ordinary course of business consistent with past practice;
(h) incur any Indebtedness, except for (i) Indebtedness solely between or among Monsoon and the Monsoon Subsidiaries, (ii) borrowings under Monsoon’s existing credit facilities (as in effect on the date hereof or amended after the date hereof not in contravention of this Agreement) in the ordinary course of business, (iii) borrowings that do not exceed the budgeted amounts set forth in Section 5.1 6.01(h) of the Monsoon Disclosure Letter, (iv) issuances of commercial paper for working capital and other short-term borrowings for general corporate purposes in each case incurred in the ordinary course of business consistent with past practice and (v) letters of credit and surety bonds issued in the ordinary course of business consistent with past practice;
(i) encumber or Section 5.2 subject any of its material assets to any Liens, other than Monsoon Permitted Liens, Liens securing Monsoon Permitted Indebtedness and non-exclusive licenses of Intellectual Property Rights entered into in the ordinary course of business consistent with past practice;
(j) (i) make any loan, advance or capital contribution to, or investment in, any Person other than any wholly-owned Monsoon Subsidiary that, individually or in the aggregate, exceeds $3,000,000 except in the ordinary course of business consistent with past practice or (ii) authorize or make any capital expenditure (other than in respect of any acquisition of interests in real property permitted under Section 6.01(d)) in any fiscal quarter that, individually or in the aggregate, exceeds by more than 20% the budgeted amount for such fiscal quarter set forth in Section 6.01(j) of the Monsoon Disclosure Letter;
(k) make any material change in its Tax accounting or financial accounting methods, principles and practices in effect on the date of the Monsoon Balance Sheet, except as may be required by IFRS;
(l) make, revoke or change any material Tax election, file any amended Tax Return, enter into any closing agreement or settle or compromise any material Tax liability or refund, consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment, enter into any Tax allocation agreement, Tax sharing agreement, or Tax indemnity agreement relating to any material Tax;
(m) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization;
(n) adopt or implement any stockholder rights plan or similar arrangement;
(o) modify, amend, enter into or terminate any Monsoon Material Contract or waive, release or assign any material rights or claims of Monsoon or any Monsoon Subsidiary under any Monsoon Material Contract, except in the ordinary course of business consistent with past practice, other than (i) any such actions taken in connection with the Transactions in accordance with this Agreement and the other Transaction Documents and (ii) entry into any Monsoon Material Contract providing for (i) acquisitions or dispositions that would not be prohibited by Sections 5.2(b6.01(d), 6.01(e) and 5.2(f6.01(f), to which this sentence shall (ii) Monsoon Permitted Indebtedness, (iii) Liens that would not applybe prohibited by Section 6.01(i) or (iv) loans, advances, capital contributions, investments or capital expenditures that would not be prohibited by Section 6.01(j) that, in the case of each of clauses (i), a party (ii), (iii) and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or (iv), does not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 6.01;
(p) except in the ordinary course of business and consistent with past practice, grant, modify, abandon, dispose of, transfer, assign or Section 5.2terminate any rights relating to any material Monsoon Intellectual Property or otherwise permit any of their rights relating to any Monsoon Intellectual Property to lapse;
(q) settle any Action if such settlement would require any payment by Monsoon or any Monsoon Subsidiary in an amount in excess of $1,000,000 individually or $5,000,000 in the aggregate, or would obligate Monsoon or any Monsoon Subsidiary to take any material action or restrict Monsoon or any Monsoon Subsidiary in any material respect from taking any action;
(r) take any action in respect of any matter that would constitute a Reserved Matter hereunder;
(s) except as required by applicable Law, amend or modify any Privacy Statement of Monsoon or any Monsoon Subsidiary other than in the ordinary course of business in a manner consistent with past practice in accordance with applicable Law; or
(t) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 1 contract
Sources: Transaction Agreement
Covenants Relating to Conduct of Business. 5. 1Conduct 7.1 Conduct of Business Prior to of Target Pending the Merger. During the period ------------------------------------------------ from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, Target agrees, except as set forth in Section 7.1 of the Target Disclosure Schedule, to carry on its business in the ordinary course in substantially the same manner as previously conducted, to pay its debts and Taxes when due, subject to good faith disputes over such debts or Taxes, in the ordinary course in substantially the same manner as previously paid, to pay or perform its other obligations when due in the ordinary course in substantially the same manner as previously paid or performed, to maintain insurance coverages and its books, accounts and records in the usual manner consistent with past practices, to comply in all material respects with all applicable laws, ordinances and regulations of Governmental Entities, to maintain and keep its properties and equipment in good repair, working order and condition (except ordinary wear and tear), and use all reasonable efforts, consistent with past practices and policies, to preserve intact its present business organization, keep available the services of its present officers and key employees and preserve its relationships and goodwill with others having business dealings with it. During Except as set forth in Section 7.1 of the Target Disclosure Schedule, without limiting the generality of the foregoing and except as expressly contemplated by this Agreement, during the period from the date of this Agreement to and continuing until the Effective Time or earlier of the termination of this AgreementAgreement or the Effective Time, without the written consent of Parent, Target shall not:
(a) adopt or propose any amendment to its articles of incorporation, its bylaws or comparable charter or organizational documents;
(i) issue, pledge or sell, or propose or authorize the issuance, pledge or sale of additional shares of capital stock of any class (other than upon exercise of Target Options outstanding on the date of this Agreement upon payment of the exercise price thereof or as otherwise provided in Section 3.2(c)), (ii) except as contemplated in Section 3.2 hereof, amend, waive or otherwise modify any of the terms of any option, warrant or stock option plan of Target, including without limitation, the Target Options and the Target Option Plan, or authorize cash payments in exchange for any options granted under any of such plans, or (iii) adopt or implement any stockholder rights plan;
(c) declare, set aside or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock (including any dividend distribution payable in, or otherwise make a distribution of, shares of capital stock of any subsequently formed Subsidiary of Target), or, except for the possible buy-out of the Outstanding Kostuik Options, purchase, redeem or otherwise acquire or propose to redeem or purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock;
(d) split (including reverse split), combine, subdivide or reclassify any shares of its capital stock, or any of its other securities;
(e) increase the compensation or fringe benefits payable or to become payable to its directors, officers or employees, or pay any benefit not required by any existing plan or arrangement (including, without limitation, the granting of stock options, stock appreciation rights, shares of restricted stock or performance units) or grant any severance or termination pay to (except pursuant to existing Material Agreements, which Material Agreements shall be interpreted and implemented in a manner consistent with past practice), or enter into or adopt any Plan or any employment or severance agreement with, any director, officer or, except as expressly contemplated it relates to the hiring of new employees in the Ordinary Course of Business, employee of Target or permitted establish, adopt, enter into, or amend any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, savings, welfare, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any directors, officers or current or former employees, including any Plan, except (i) to the extent required by this Agreement applicable law or regulation or (ii) for salary and benefit increases in the Ordinary Course of Business to employees other than executive officers of Target.
(i) outside of Target's Ordinary Course of Business, sell, pledge, lease, dispose of, grant, encumber, or otherwise authorize the sale, pledge, disposition, grant or encumbrance of any of the Assets of Target, including by operation of law, or (ii) acquire any real property, any other material Assets or any interest (including, without limitation, by merger, consolidation, lease or acquisition of stock or Assets) in a corporation, partnership, other business organization or any division thereof (or a substantial portion of the Assets thereof);
(g) (i) incur, assume or pre-pay any debt for borrowed money (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, (iii) make any loans, advances or capital contributions to, or investments in, any other Person or with respect to any other material Assets (including as set forth advances to employees), (iv) enter into any "keep well" or other agreement to maintain the financial condition of another entity, (v) enter into any derivative contracts or make investments in marketable securities, or (vi) other than in the Company Disclosure ScheduleOrdinary Course of Business, consistent with past practices, enter into any contract or agreement that would be a Material Agreement;
(h) make or rescind any material express or deemed election relating to Taxes, settle or compromise any material action, claim, suit, litigation, proceeding, arbitration, audit or investigation relating to Taxes, amend any material Tax Return except in the Ordinary Course of Business, or except as may be required by applicable law, make any change to any of its material methods of reporting income or deductions (including, without limitation, any change to its methods or basis or write-offs of accounts receivable) for federal income Tax purposes from those employed in the preparation of its federal income Tax return for the taxable year ending December 31, 2000;
(i) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted, unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the Ordinary Course of Business of liabilities reflected or reserved against in the Reference Balance Sheet or arising after the date hereof;
(j) waive any rights of substantial value or make any payment, direct or indirect, of any material liability of Target before the same comes due in accordance with its terms;
(k) fail to maintain its existing insurance coverage of all types in effect or, in the event any such coverage shall be terminated or lapse, procure substantially similar substitute insurance policies which in all material respects provide coverage in at least such amounts and insure against such risks as are currently covered by such policies;
(l) enter into, or amend any collective bargaining agreement (other than as required by law or extensions of existing agreements in the Ordinary Course of Business);
(m) change its methods of accounting as consented in effect on March 31, 2001, except as required by GAAP, or take any action, other than reasonable and usual actions in the Ordinary Course of Business, with respect to accounting policies or procedures, unless required by GAAP;
(n) modify, amend or terminate any Material Agreement or waive, release or assign any material rights or claims;
(o) engage in writing by Purchaser any transaction with, or enter into any agreement, arrangement, or understanding with, directly or indirectly, any Affiliates of Target which involves the transfer of consideration or has a financial impact on Target, other than pursuant to such agreements, arrangements, or understandings existing on the date of this Agreement or disclosed in Section 5.1(o) of the Target Disclosure Schedule;
(p) close, shut down, or otherwise eliminate any facility or office;
(q) make or commit to make any capital expenditures that exceed $100,000 for any single item or related series of items or, except as required pursuant to commitments existing on the date hereof or made without violation of this Section 7.1, make any cash disbursement exceeding $100,000 for any single ----------- item or related series of items;
(r) initiate, compromise, or settle any material litigation or arbitration proceeding;
(s) take, or agree to commit to take, any action that could reasonably be expected to result in (i) the case representations and warranties of clause (b)Target contained herein that are qualified by materiality, the Company) (such consent not to be unreasonably withheld, conditioned or delayed)true and correct, (aii) Company shall, the representations and shall cause its Subsidiaries to, conduct its business in the ordinary course warranties of Target contained herein that are not so qualified to not be true and correct in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organization, the services of its employees and its advantageous business relationships, and (biii) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each any of the Company and Purchaser shall notconditions to the Merger to not be satisfied; and
(t) enter into an agreement, and shall cause their respective Subsidiaries not tocontract, knowingly take commitment or arrangement to do any action that would reasonably be expected to adversely affect or materially delay of the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby foregoing, or to perform its respective covenants and agreements under this Agreement authorize, recommend, propose or announce an intention to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take do any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2foregoing.
Appears in 1 contract
Sources: Merger Agreement (Interpore International Inc /De/)
Covenants Relating to Conduct of Business. 5. 1Conduct Section 5.1 Conduct of Business Prior by the Company Pending the Merger. Except as otherwise expressly contemplated by this Agreement or as set forth in the Disclosure Schedule or as required by applicable law and except as contemplated by the Company's annual or capital budget (including the right to the Effective Time. During substitute projects of substantially similar characteristics) provided to Parent, during the period from the date of this Agreement to the Effective Time or earlier to occur of (i) the date of the termination of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in ii) the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b)Effective Time, the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause each of its Subsidiaries to, conduct in all material respects carry on its business in the regular and ordinary course in all material respects consistent with past practice and use its commercially reasonable efforts to maintain and preserve intact its current business organization, keep available the services of its current officers and employees and preserve its advantageous relationships with customers, suppliers and others having business relationshipsdealings with it. Without limiting the generality of the foregoing, and (b) except as otherwise expressly required contemplated by this Agreement (including or as set forth in Section 5.1 of the Company Disclosure Schedule or the Purchaser Disclosure Schedule), as required by law or as consented applicable law, and subject to in writing by the other partyprovisions of Section 6.5 and Article VIII, each of the Company and Purchaser shall not, and shall cause their respective each of its Subsidiaries not to, knowingly take without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed (except with respect to subsections (b) and (h) hereof for which Parent may withhold its consent in its sole and absolute discretion)):
(a) (x) split, combine or reclassify its outstanding shares of capital stock, (y) declare, set aside or pay any action dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any shares of its capital stock, other than (i) dividends and distributions by a Subsidiary of the Company to its parent and (ii) regular cash dividends paid by the Company to its stockholders semi-annually in accordance with its customary practice in an amount not to exceed $0.125 per share of Common Stock per semi-annual payment of such dividends, or (z) repurchase, redeem or otherwise acquire any shares of its capital stock or any other securities convertible into or exchangeable or exercisable for any shares of its capital stock, provided that would reasonably be expected (A) the Company may acquire Options (including shares used to adversely affect satisfy the exercise price thereof), Restricted Stock and Performance Shares upon their exercise or materially delay settlement and (B) each wholly-owned Subsidiary of the ability Company may repurchase, redeem or otherwise acquire shares of its capital stock or securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(b) (x) issue, deliver, sell, grant, pledge or dispose of, or authorize or propose to obtain issue, deliver, sell, grant, pledge or dispose of, any necessary approvals shares of its capital stock or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares (other than the issuance of shares of Common Stock pursuant to Options, Restricted Stock and Performance Share Awards outstanding as of the date hereof) and (y) except as contemplated by this Agreement, amend, waive or otherwise modify the terms of any Regulatory Agency such rights, warrants or options;
(c) amend the Articles of Organization or By-Laws or other Governmental Entity required organizational documents of the Company or its Subsidiaries;
(d) merge or consolidate with any other Person, except for (i) any such transactions between wholly owned Subsidiaries of the transactions contemplated hereby Company or between the Company and any of its wholly owned Subsidiaries, provided that the Company is the surviving entity, and (ii) acquisitions and dispositions permitted by clauses (e) and (f) below, respectively, effected by means of a merger or consolidation involving the Company or any of its Subsidiaries;
(e) make any acquisition or agree to perform make any acquisition, except for purchases of inventory, raw materials or supplies in the ordinary course of business substantially consistent with past practice, by merger or otherwise, of any business, assets or equity securities involving the payment of consideration in excess of $2,500,000 individually and $7,000,000 in the aggregate (valuing any non-cash consideration at its respective covenants fair market value as of the date of the agreement of the acquisition);
(f) sell, lease or otherwise dispose of, or agree to sell, lease or otherwise dispose of, any of its assets that have a value in excess of $2,500,000 individually and agreements under this Agreement $7,000,000 in the aggregate, except sales of inventory or to consummate obsolete assets in the transactions contemplated hereby on a timely basis. Notwithstanding anything ordinary course of business substantially consistent with past practice;
(g) except in the ordinary course of business and upon terms not materially adverse to the contrary Company and its Subsidiaries with respect to such Material Contract, or as required under the terms of a Material Contract, enter into, amend or otherwise modify in any material respect any Material Contract;
(h) except for borrowings under the existing credit facilities, letters of credit entered into in the ordinary course of business consistent with past practice and trade payables incurred in the ordinary course of business consistent with past practice, (i) create, incur or assume any indebtedness for borrowed money (other than indebtedness in replacement of the existing credit facilities on substantially similar terms and for borrowings not to exceed the maximum borrowings under the existing credit facilities), (ii) issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, (iii) guarantee any obligations of another Person (other than the Company or any of its Subsidiaries);
(i) make any loans, advances (other than advances to employees of the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice) or capital contributions to, or investments in, any other Person other than to any of the Company's Subsidiaries;
(j) pledge, encumber or otherwise subject to a Lien (other than a Permitted Lien) any material asset or property of the Company or any material portion of the Company's assets or properties;
(k) except as may be required as a result of a change in regulatory accounting standards and practice or in U.S. GAAP, change any of the accounting principles or practices used by it materially affecting the reported consolidated assets, liabilities or results of operations of the Company and its Subsidiaries;
(l) except in the ordinary course of business or as listed in Section 5.1(l) of the Disclosure Schedule, settle or compromise any pending or threatened suit, action or claim, other than settlements or compromises requiring payments by the Company or any of its Subsidiaries of no more than $1,000,000 individually and $5,000,000 in the aggregate;
(m) pay, discharge or satisfy any material claims, liabilities or obligations other than (x) the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Company Financial Statements (or as contemplated by the notes thereto) or incurred in the ordinary course of business substantially consistent with past practice, in all cases not more than $2,500,000 individually and $7,000,000 in the aggregate and (y) payment of Taxes as they become due and payment of trade payables incurred in the ordinary course of business;
(n) except as set forth in Section 5.1 5.1(n) of the Disclosure Schedule, terminate, establish, adopt, enter into, make any new grants or Section 5.2 awards of stock based compensation or other benefits under, amend or otherwise modify, any Company Stock Plans or Employee Benefit Plans (including the Deferred Compensation Plan and Retention Bonus Plan) or increase the salary, wage, bonus or other than Sections 5.2(bcompensation of any directors, officers or key employees except (i) increases in base salary in connection with annual performance and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary salary reviews or prudent for it to take upon promotion in the ordinary course of business substantially consistent with past practice; or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party (ii) to the extent such actions would otherwise require consent required by the terms of any of the other party under Employee Benefit Plans, Company Stock Plans or Material Employment Agreements existing as of the date of this Section 5.1 or Section 5.2.Agreement;
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as set forth in Section 5.2 of Business Prior to the Effective Time. During Seller Disclosure Schedules or as required by applicable Law or as otherwise expressly permitted or required by the period terms of this Agreement (including Section 5.13), from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, and except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), Seller shall (a) Company shall, and shall cause its Subsidiaries, the Purchased Consolidated Companies and any Subsidiary of a Purchased Consolidated Company (but, in the case of Purchased Consolidated Ventures and Subsidiaries of Purchased Consolidated Ventures, solely to the extent Seller has authority over such entity) to, )
(i) conduct its business the Business in the ordinary course in all material respects consistent with past practice, and (ii) use commercially reasonable efforts to maintain and preserve intact its business organizationthe Business, and with respect to the Business keep available the services of its employees and its advantageous business relationshipsagents, and maintain its relations and goodwill with its suppliers, customers, employees, agents and others having business relationships with any Seller Entity, any of their respective Affiliates, any Purchased Consolidated Venture or Subsidiary of a Purchased Consolidated Venture in respect of the Business.
(b) except Except as expressly set forth in Section 5.2 of the Seller Disclosure Schedules or as required by applicable Law or as otherwise expressly permitted or required by the terms of this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure ScheduleSection 5.13), required by law or as consented and solely with respect to in writing by the other partyPurchased Assets, each the Purchased Consolidated Companies, the Subsidiaries of the Company Purchased Consolidated Companies, the Assumed Liabilities and Purchaser the Business, Seller shall not, and shall cause their respective each Seller Entity, each Purchased Consolidated Company and any Subsidiary of a Purchased Consolidated Company (but, in the case of Purchased Consolidated Ventures and Subsidiaries of Purchased Consolidated Ventures, solely to the extent Seller has authority over such entity) not to, knowingly take do any of the following without the prior consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) except as may be required by applicable Law or under the terms of any Benefit Plan in existence on the date of this Agreement, (A) transfer the employment of any Current Business Employee to a different employer except in the ordinary course of business, (B) amend or terminate any Purchased Entity Benefit Plan or amend or terminate any other Benefit Plan in respect of Business Employees, in each case, except in connection with any action that would reasonably be expected applies uniformly to adversely affect Current Business Employees and other similarly situated employees of Seller and its Affiliates, or (C) in respect of any Current Business Employee, increase any compensation or benefits, establish any new compensation or benefit programs or enter into or amend any employment or consulting agreement, except in each case, in the ordinary course of business consistent with past practices;
(ii) enter into or materially delay amend any collective bargaining agreement or other agreement with a labor union, works council or similar organization covering Current Business Employees;
(iii) grant, create, assume or otherwise incur any Lien (other than Permitted Liens) on any of the ability to obtain material Purchased Assets or any necessary approvals material assets of any Regulatory Agency Purchased Consolidated Venture, Purchased Entity or any Subsidiary of a Purchased Consolidated Venture or Purchased Entity other Governmental Entity required for than in the transactions contemplated hereby ordinary course of business consistent with past practice;
(iv) sell, assign, license, transfer, encumber or otherwise dispose of any material Purchased Asset, any Retained Intellectual Property (unless the recipient of such Retained Intellectual Property agrees in writing to perform license such Retained Intellectual Property to Purchaser and its respective covenants Affiliates on terms and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary conditions that are consistent with those set forth in Section 5.1 5.16 and further require each subsequent recipient to so agree in writing) or any material assets of any Purchased Consolidated Venture, Purchased Entity or any Subsidiary of a Purchased Consolidated Venture or Purchased Entity (excluding de minimis assets no longer used in the Business) other than in the ordinary course of business consistent with past practice;
(v) change the general level of pricing of services and products of the Business other than in the ordinary course of business consistent with past practice;
(vi) waive any of their rights under the confidentiality, non-solicit or non-compete provisions of any Contracts relating to the Business, except in the ordinary course of business consistent with past practice;
(vii) terminate, suspend, amend or modify in any material respect, any Business Permit, except (A) as required by applicable Law or a Governmental Entity or (B) in the ordinary course of business consistent with past practice;
(viii) (A) terminate a Material Contract or (B) enter into a new Contract that would be a Material Contract under clauses (vii), (viii), (x), (xi), (xiii), (xiv), (xv) or (xvi) of Section 5.2 3.11(a) if entered into prior to the date hereof, other than in the ordinary course of business consistent with past practice and except for renewals or terminations in accordance with the terms of any Material Contract;
(ix) authorize or effect any amendment to or change the organizational documents of any Purchased Entity or any Subsidiary of a Purchased Entity or consent to any amendment of the organizational documents of any Purchased Venture;
(x) issue, authorize the issuance of or consent to the issuance of any equity interests or grant any options, warrants, or other rights to purchase or obtain any of its equity securities or issue, sell or otherwise dispose of any of its equity securities or redeem, repurchase or otherwise acquire any securities of any Purchased Consolidated Venture or Purchased Entity (other than Sections 5.2(bto another Purchased Entity);
(xi) except for transactions among the Seller Entities, Seller, the Purchased Entities and 5.2(f)their respective Affiliates in the ordinary course, not (A) incur any Indebtedness other than in the ordinary course of business or for amounts not exceeding $2,000,000, (B) make any material acquisition of any assets or businesses in excess of $1,000,000 other than acquisitions in the ordinary course of business and acquisitions of businesses or assets already contracted by any Seller Entity, Seller, any Purchased Consolidated Ventures, any Purchased Entity or their respective Affiliates, (C) sell, pledge, dispose of or encumber any material assets or businesses other than in the ordinary course of business and sales or dispositions of businesses or assets already contracted by any Seller Entity, Seller, any Purchased Consolidated Ventures, any Purchased Entity or their respective Affiliates, to which this sentence shall not apply)a wholly owned Purchased Entity or as may be required by applicable Law, a party and its Subsidiaries may take or (D) enter into any commercially reasonable actions that such party reasonably determines are necessary or prudent for it binding Contract with respect to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent any of the other party under this Section 5.1 or Section 5.2.foregoing;
(xii) fail to make capital expenditures necessary to operate the Business in the ordinary course;
Appears in 1 contract
Sources: Purchase Agreement (Visteon Corp)
Covenants Relating to Conduct of Business. 5. 1Conduct Section 5.1 Conduct of Business Prior by the Company Pending the Merger.
(a) Except as otherwise expressly contemplated by this Agreement, as consented to in writing by Parent (which consent shall not be unreasonably withheld or delayed), as set forth in the Effective Time. During Disclosure Schedule or as required by applicable law, during the period from the date of this Agreement to the Effective Time or earlier to occur of (i) the date of the termination of this AgreementAgreement or (ii) the Effective Time, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company covenants and agrees that it shall, and shall cause each of its Subsidiaries to, conduct in all material respects, carry on its business in the ordinary course in all material respects and and, to the extent consistent therewith, use commercially reasonable efforts to maintain and preserve intact its current business organization, keep available the services of its the Company’s current officers and employees and preserve its advantageous relationships with customers, suppliers and others having significant business relationshipsdealings with it. Without limiting the generality of the foregoing, and (b) except as otherwise expressly required contemplated by this Agreement (including or as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), as required by law or as consented applicable law, and subject to in writing by the other partyprovisions of Section 6.6 and ARTICLE VIII, each of the Company and Purchaser shall not, and shall cause their respective each of its Subsidiaries not to, knowingly without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(i) (x) split, combine or reclassify its outstanding shares of capital stock, (y) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any shares of its capital stock, other than dividends and distributions by a Subsidiary of the Company to its parent, or (z) repurchase, redeem or otherwise acquire any shares of its capital stock or any other securities convertible into or exchangeable or exercisable for any shares of its capital stock; provided that (A) the Company may acquire Options and RSUs upon their exercise, settlement or forfeiture and (B) each wholly-owned Subsidiary of the Company may repurchase, redeem or otherwise acquire shares of its capital stock or other equity interests or securities convertible into or exchangeable or exercisable for any shares of its capital stock or other equity interests;
(ii) issue, deliver, sell, pledge or dispose of any shares of its capital stock or any securities convertible into, or any rights, warrants or options to acquire, any such shares (provided that the Company may issue shares of Common Stock upon exercise of Options and/or vesting of RSUs and may, after the date hereof, grant Options to employees hired by the Company after December 31, 2007 that convert into up to 20,000 shares of Common Stock for a given individual and up to 250,000 shares of Common Stock in the aggregate);
(iii) amend the Certificate of Incorporation or By-Laws or other organizational documents of the Company or its Subsidiaries;
(iv) merge or consolidate with any other Person, except for (i) any such transactions between wholly-owned Subsidiaries of the Company or between the Company and any of its wholly-owned Subsidiaries, provided that the Company is the surviving entity, and (ii) acquisitions and dispositions permitted by clauses (v) and (vi) below, respectively, effected by means of a merger or consolidation involving the Company or any of its Subsidiaries;
(v) except as required by contractual commitments existing on the date hereof, make any acquisition or agree to make any acquisition of any business, by merger or otherwise;
(vi) except as required by contractual commitments existing on the date hereof, sell, lease license, transfer or swap, mortgage or otherwise encumber (including securitization), or subject to any Lien other than a Permitted Lien (or the Lien under the Credit Agreement, dated November 13, 2007, by and among the Company, certain Subsidiaries thereof and the other parties thereto and any replacement credit facility of the Company, the “Credit Facility”) or otherwise dispose of, or agree to sell, lease license, transfer or swap, mortgage or otherwise encumber (including securitization), or subject to any Lien other than a Permitted Lien or any Lien under the Credit Facility or otherwise dispose of, any of its assets that have a value in excess of $1,000,000 individually and $5,000,000 in the aggregate in any three month period after the date hereof, except sales of inventory or obsolete assets in the ordinary course of business;
(vii) except for borrowings incurred in the ordinary course of business (including without limitation, any borrowings under the existing credit facilities and trade payables), incur any additional indebtedness (other than indebtedness in replacement of existing indebtedness) in a single transaction or a group of related transactions;
(viii) except as may be required as a result of a change in regulatory accounting standards and practice or in U.S. GAAP, change any of the accounting principles or practices used by it materially affecting the reported consolidated assets, liabilities or results of operations of the Company and its Subsidiaries;
(ix) settle or compromise any material pending or threatened suit, action or claim, other than settlements or compromises requiring payments by the Company or any of its Subsidiaries of no more than $1,000,000 individually and $5,000,000 in the aggregate;
(x) terminate, establish, adopt, enter into, make any new grants or awards of stock based compensation or other benefits under, amend or otherwise modify, any Company Stock Plans, Employee Benefit Plans or Material Employment Agreements (or any plan or arrangement that would be a Company Stock Plan, Employee Benefit Plan or Material Employment Agreement if in existence on the date hereof) or increase the salary, wage, bonus or other compensation of any employee except (i) in the ordinary course of business and consistent with past practice, increases in any compensation in connection with annual performance and salary reviews or upon promotion, payment of annual bonuses, in each case to non-officer employees, (ii) for grants of Options as permitted under Section 5.1(a)(ii) or (iii) to the extent required by any of the Employee Benefit Plans, Company Stock Plans or employment agreements existing as of the date of this Agreement;
(xi) except as required by applicable law, (i) make any material Tax election, adopt or change any material Tax accounting method or take any material position on any material Tax Return that is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods, (ii) amend any material Tax Return, or (iii) enter into any closing agreement or settle or compromise any claim or assessment with respect to a material amount of Taxes;
(xii) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of the Company or any material Subsidiary of the Company;
(xiii) make or agree to make any capital expenditures in excess of 110% of the aggregate amounts reflected in the capital expenditure budgets provided or made available to Parent prior to the date hereof, provided that, if a force majeure event occurs, Parent shall respond within 48 hours of receipt of notice by the Company that it desires to make or agree to make capital expenditures in excess of the limitations set forth in this clause (xiii) as to whether its consent for such expenditures is granted;
(xiv) acquire or dispose of any manufacturing facilities;
(xv) take or fail to take any action that would reasonably be expected to cause the Spin-Off to fail to qualify for non-recognition treatment under Sections 355(a) and 361(c) of the Code;
(xvi) except as necessary in the ordinary conduct of the Company’s and its Subsidiaries’ business consistent with past practice, grant or acquire, agree to grant or to acquire from any third party, or dispose of or permit to lapse any rights to, any material Intellectual Property or disclose or agree to disclose to any third party, other than representatives of Parent, any material trade secret ;
(xvii) make any loans, advances or capital contributions to, or investments (other than investments in cash and marketable securities) in, any other Person, other than by the Company or a Subsidiary of the Company to or in the Company or any Subsidiary of the Company;
(xviii) enter into or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any material change in the existing borrowing or lending arrangements for or on behalf of any of such Persons or otherwise enter into any agreement, arrangement or commitment with an Affiliate of the Company other than that which is permitted under Section 5.1(a)(x);
(xix) except as permitted pursuant to Section 6.4, approve or authorize any action to be submitted to the stockholders of the Company for approval that is intended or would reasonably be expected to prevent, impede, interfere with, delay, postpone or adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under by this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 Agreement;
(xx) other than Sections 5.2(bin the ordinary course of business and consistent with past practice, enter into, voluntarily terminate or amend the material terms of any Material Contract;
(xxi) enter into, terminate or amend any pharmaceutical product distribution agreement or material license agreement related to Company Intellectual Property in each case in which the applicable territory is outside the United States and 5.2(f)Canada;
(xxii) enter into, voluntarily terminate or amend the material terms of any exclusive supplier agreements or supplier agreements with a term of more than three years; or
(xxiii) agree in writing, or otherwise, to which take any of the foregoing actions.
(b) Notwithstanding any provision contained in this sentence shall not apply)Agreement, a party action taken by the Company and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party which is permitted under this Section 5.1 shall not constitute a misrepresentation or breach of warranty or covenant. The Company shall have the right to update the Disclosure Schedule hereto between the date hereof and the Effective Time to reflect actions taken by the Company and its Subsidiaries that are permitted to be taken pursuant to this Section 5.25.1.
(c) The Company shall notify Parent in writing at least five Business Days prior to taking any action or actions prohibited by this Section 5.1, which notice shall reasonably specify the details of the proposed action.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct of Business Prior (a) From the date hereof and prior to the Effective Time. During earlier to occur of the period from Closing Date and the date of that this Agreement to is terminated in accordance with Article VII (the Effective Time or earlier termination of this Agreement“Interim Period”), except as expressly contemplated or permitted by this Agreement (including i) as set forth in the Company Section 5.2(a) of Seller’s Disclosure Schedule), (ii) as required by law applicable Law, (iii) as required or reasonably necessary to comply with any COVID-19 Measures, (iv) as consented expressly required by the terms of this Agreement and (v) as Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company Seller shall, and shall cause its Subsidiaries Affiliates to, conduct its business (A) operate and maintain the Facility and the Leased Real Property in the ordinary course of business consistent with past practice, (B) conduct the Business in all material respects the ordinary course of business consistent with past practice and (C) use commercially reasonable efforts to maintain and preserve intact its business organization, keep available the services of its employees and agents of the Business and maintain its advantageous business relationshipsrelations and goodwill with its suppliers, customers and other Persons having relationships with the Business. Notwithstanding the foregoing, prior to taking, or omitting to take, any action required or reasonably necessary to comply with any COVID-19 Measures, Seller shall notify Purchaser of such action (or omission) and consider in good faith any suggestions of Purchaser with respect to such action (or omission).
(b) except Except as (i) set forth in Section 5.2(b) of Seller’s Disclosure Schedule, (ii) required by applicable Law or (iii) expressly required by the terms of this Agreement, during the Interim Period, Seller shall not, and shall not permit any of its Affiliates to, solely with respect to the Facility, the Business, the Purchased Assets and the Assumed Liabilities, do any of the following without the prior written consent (which shall not be unreasonably withheld, conditioned or delayed) of Purchaser:
(i) sell, assign, lease, sublease, license, transfer or otherwise dispose of (other than the sale of inventory or obsolete or defective assets, in each case, in the ordinary course of business consistent with past practice), any assets of the Business, or encumber any such assets, except for encumbrances that are Permitted Liens;
(ii) except as required by the Accounting Standards, change any method of accounting or accounting practice or policy or internal control procedures;
(iii) except as required under an Employee Benefit Plan, grant, implement or announce any increase or decrease in the salaries, wage rates, bonuses, incentive compensation, other variable pay or compensation or other benefits payable by Seller or any of its Affiliates to any Facility Employee;
(iv) establish, adopt or amend any Employee Benefit Plan;
(v) abandon, sell, exclusively license, lease, cancel, intentionally permit to lapse, or otherwise dispose of any rights to any Transferred Intellectual Property;
(vi) fail to renew, or otherwise permit to lapse, any Facility Permit;
(vii) waive, settle or compromise any rights, claims, counterclaims, indemnities, causes of action, defenses or rights of set-off relating to the Purchased Assets, the Facility or the Business, other than those involving only the payment of monetary damages not in excess of $200,000 individually or $2,000,000 in the aggregate (excluding amounts to be paid under insurance policies) which will be paid in full by Seller prior to the Closing;
(viii) hire any person who would be a Facility Employee or engage any other individual to serve as an independent contractor or consultant in connection with the Business other than the hiring of a new Facility Employee in the ordinary course of business for purposes of replacing a Facility Employee whose employment has terminated; provided, that employment terms, including compensation and benefits, of such newly hired Facility Employee shall be substantially similar to the employment terms applicable to the terminated Facility Employee as of the date of termination;
(ix) transfer any Facility Employee to another business unit or terminate the employment, or layoff, of any Facility Employee other than for cause;
(x) waive the restrictive covenant obligations of any current or former Facility Employees or independent contractors;
(xi) modify, extend or enter into any Collective Bargaining Agreement or recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative for any Facility Employees;
(including xii) enter into, extend, renew, waive any rights under, materially amend, modify cancel or terminate (unless such Material Contract terminates in accordance with its terms as in effect on the date hereof) any Material Contract or agreement which if entered into after the date hereof would be a Material Contract;
(xiii) acquire any material asset or property (whether real or personal) to be used or held for use in connection with the Facility or the Business other than for capital expenditures in accordance Section 5.2(b)(xiv);
(A) except as set forth in the Company Disclosure Schedule Business’ capital expenditure budget attached hereto as Exhibit G (the “Capex Budget”), make or commit to make capital expenditures (or undertake any Liability for capital expenditures) in excess of $3,000,000 or $15,000,000 in the aggregate, or (B) cancel or delay or decrease capital expenditures in respect of any capital expenditures reflected in the Capex Budget;
(xv) acquire, lease, sublease, assign, transfer, license or otherwise dispose of any Leased Real Property;
(xvi) enter into, extend, renew, waive any rights under, amend, modify, cancel or terminate, any (A) Real Property Agreement (or agreement which if entered into after the date hereof would be a Real Property Agreement) or (B) Permitted Lien to which the Leased Real Property is subject;
(xvii) fail to maintain in full force and effect in accordance with its terms and without material amendment or modification any insurance policies covering the Purchased Assets, the Facilities or the Purchaser Disclosure Schedule)Business without securing renewal or replacement insurance that, required by law in the aggregate, provides materially comparable coverage;
(xviii) take any actions to amend or as consented to in writing by change the other party, each current zoning of the Company and Purchaser shall notLeased Real Property (including in any respect of any zoning variances and/or special exceptions of the Leased Real Property) or to apply for, and shall cause their respective Subsidiaries not topursue, knowingly accept or obtain any development entitlements from any Governmental Authority (or enter into any agreements relating thereto); or
(xix) agree to take any action that would reasonably be expected to adversely affect or materially delay of the ability to obtain any necessary approvals actions specified in this Section 5.2(b). provided, however, that, in the case of any Regulatory Agency or other Governmental Entity required an emergency for the transactions contemplated hereby safety of individuals or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f)environment, to which this sentence shall not apply), a party and its Subsidiaries Seller may take any commercially reasonable actions that such party reasonably determines are necessary would otherwise be prohibited by this Section 5.2(b) in order to prevent the occurrence of, or prudent for it to take or not take in response mitigate existence of, the emergency situation; provided, further, that Seller shall, to the Pandemic or the Pandemic Measures; providedextent reasonably practicable, that such party shall provide prior notice to and consult in good faith with the other party Purchaser before taking any such action in connection with the occurrence of such emergency, and, to the extent not reasonably practicable, provide prompt notice to Purchaser upon the occurrence of such actions would otherwise require consent emergency and upon the taking of such action(s).
(c) Nothing contained in this Agreement shall be construed to give Purchaser or any of its Affiliates, directly or indirectly, any right to control or direct the Business prior to the Closing or any other businesses or operations of Seller or its Affiliates. Prior to the Closing, Seller shall exercise, in accordance with the terms of this Agreement, such control and supervision of the other party under this Section 5.1 or Section 5.2Business.
Appears in 1 contract
Sources: Asset Purchase Agreement (CF Industries Holdings, Inc.)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as set forth in Section 5.2(a) of Business Prior to the Effective Time. During Seller Disclosure Schedules or as required by applicable Law or as otherwise expressly contemplated by the period terms of this Agreement, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), Seller shall (a) Company shall, and Seller shall cause its Subsidiaries the other Seller Entities to, conduct its business ) (i) operate the Business in all material respects in the ordinary course in all material respects and consistent with past practice and (ii) use its commercially reasonable efforts to (x) preserve substantially intact the present business organization of the Business, (y) maintain and preserve intact its business organization, the services of its employees and its advantageous business relationshipsin effect all Transferred Permits, and (z) maintain satisfactory relationships with the customers, lenders, suppliers and others having material business relationships with the Business; provided, that no action by Seller or any of its Affiliates specifically permitted by any provision of Section 5.2(b) shall be deemed a breach of this Section 5.2(a).
(b) except as expressly required by this Agreement (including Except as set forth in Section 5.2(b) of the Company Seller Disclosure Schedule Schedules or as required by applicable Law or as otherwise expressly contemplated by the terms of this Agreement, and solely with respect to the Business, the Purchased Assets, the Assumed Liabilities or the Purchaser Disclosure Schedule)Purchased Companies, required by law or as consented to in writing by the other party, each of the Company and Purchaser Seller shall not, and shall cause their respective each of its Subsidiaries not to, knowingly do any of the following without the prior consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) except as required under any Benefit Plan or applicable Law, (A) grant any increase in the wages, salaries, compensation, bonuses, equity or equity-based awards or incentives payable to any Business Employees (other than increases to base salary in connection with promotions or position changes in the ordinary course of business consistent with Seller’s internal policies and past practice that do not exceed 15% of each Business Employee’s prior annual base salary or wages), it being understood and agreed that increases previously approved prior to March 31, 2019 that will go into effect in April 2019 may be implemented and shall not be prohibited by this item, (B) adopt, establish, enter into, materially amend, or increase or promise to increase any benefits, other than in the ordinary course of business, under a broad-based employee benefit plan or arrangement that applies substantially uniformly to Business Employees and other similarly situated employees of Seller and its Affiliates, (C) grant any severance, retention, change in control, transaction bonus or termination pay to, or enter into or amend any agreement or arrangement providing for the payment of such amounts with, any Business Employee, (D) amend or enter into any Collective Bargaining Agreement, other than extending the applicable expiration date of any Collective Bargaining Agreement on the same terms and conditions as in effect on the date of this Agreement by a period of not more than one month at a time, (E) hire any Business Employee having an annual salary or annualized base wages in excess of one hundred and fifty thousand dollars ($150,000) or terminate the employment of any Business Employee having an annual salary or annualized base wages in excess of one hundred and fifty thousand dollars ($150,000) (other than for cause) or (F) transfer any Business Employee out of the Business;
(ii) authorize or effect any amendment to or change the Organizational Documents of any Purchased Company;
(iii) (A) issue, authorize the issuance of, grant, sell, or dispose of any Purchased Company Securities (other than by or to another Purchased Company), (B) split, combine or reclassify any Purchased Company Securities or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Purchased Company Securities (other than pursuant to any binding contractual obligation in effect as of the date hereof) or (C) amend any term of any Purchased Company Security (in each case, whether by merger, consolidation or otherwise);
(iv) except for transactions (x) by Seller for which none of the Purchased Companies or the Business or, after the Closing, Purchaser or any of its Affiliates (including the Purchased Companies) will have any Liability and (y) solely among the Purchased Companies, not (A) incur any Indebtedness of any Purchased Company other than for amounts not exceeding one million dollars ($1,000,000), (B) make any acquisition (by merger, consolidation, acquisition of stock or assets or otherwise) of any assets or businesses in excess of one million dollars ($1,000,000) other than acquisitions of supplies in the ordinary course of business consistent with past practice and acquisitions of businesses or assets pursuant to a definitive agreement in effect as of the date hereof, (C) sell, pledge, transfer, dispose of or encumber or create any Lien (other than Permitted Liens) on any Purchased Assets other than sales of Inventory in the ordinary course consistent with past practice and sales or dispositions of businesses or assets pursuant to a definitive agreement in effect as of the date hereof, or to a wholly owned Purchased Company, or (D) enter into any binding Contract with respect to any of the foregoing;
(v) exercise any option to extend any leases related to the Transferred Leased Property;
(vi) amend any material term of, waive any material right under, or terminate (other than upon expiration in accordance with its terms) any Real Property Lease;
(vii) enter into any Contract in relation to the Business for the purchase of real property or enter into any Contract that, if in effect on the date hereof, would be a Real Property Lease;
(viii) settle or offer to settle (A) any Proceeding (other than a Tax Proceeding) other than in the ordinary course of business consistent with past practice or involving solely money damages not exceeding one million dollars ($1,000,000) or (B) any Proceeding that relates to the transactions contemplated hereby;
(ix) sell, lease, license, sublicense, modify, terminate, transfer or otherwise dispose of, incur any Lien on, waive, abandon or allow to lapse, or fail to take any action reasonably necessary to maintain, enforce and protect, any (A) Marks included in the Business Owned Intellectual Property or (B) material Business Owned Intellectual Property (other than Marks), in the case of each of clause (A) and clause (B), other than any non-exclusive licenses entered into in the ordinary course of business consistent with past practice;
(x) make any material change in any method of financial accounting or financial accounting practice or policy that is specifically targeted at the Business;
(xi) except in the ordinary course of business consistent with past practice, (A) terminate or materially modify, amend or waive any right under any Material Contract (other than any expiration of any such Material Contract in accordance with its term); (B) cancel, compromise or settle any material claim, or intentionally waive or release any material right with respect to any Material Contract; or (C) enter into any Contract that would have been a Material Contract if entered into prior to the date hereof; provided, that, in the case of this clause (C), the Parties acknowledge and agree that entry into any Contract of a type described in Sections 3.11(a)(v) – (vii), (xiv) and (xvii) shall not be considered in the ordinary course of business consistent with past practice;
(xii) enter into any Contract that limits or otherwise restricts in any material respect the conduct of the Business or any Purchased Company or any of their respective Affiliates or any successor thereto or that would, after the Closing Date, limit or restrict in any material respect the Business, any Purchased Company, Purchaser or any of their respective Affiliates, from engaging or competing in any line of business, in any location or with any Person;
(xiii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or file for bankruptcy with respect to any Purchased Company;
(xiv) terminate, suspend, amend or modify in any material respect any Business Permit, except as required by applicable Law or a Governmental Entity;
(xv) cause any Purchased Company to be treated other than as a “disregarded entity” for U.S. federal income tax purposes;
(xvi) incur any capital expenditures or any Liabilities in respect thereof payable by any Purchased Company, other than in accordance with the capital expenditure budget relating to the Business in effect as of the date hereof;
(xvii) make any loans, advances or capital contributions to, or investment in, any other Person with respect to the Business in excess of one million dollars ($1,000,000) in the aggregate, other than pursuant to any binding contractual obligation in effect as of the date hereof or advances to employees for business expenses to be incurred in the ordinary course of business consistent with past practice;
(xviii) waive, release or assign any material rights, claims or benefits of the Business under any Available Insurance Policy;
(xix) change or amend its cash management customs and practices (including the collection of receivables, payment of payables, maintenance of inventory control and pricing and credit practices), in each case in a manner that is specifically targeted at the Business;
(xx) change the Business’s Inventory levels or take any action that would reasonably be expected increase or decrease such Inventory levels, other than in the ordinary course of business consistent with past practice or as a result of normal operating adjustments to adversely affect or materially delay reflect seasonality requirements of the ability Business;
(xxi) communicate through any individual listed on Section 3.15(h) of the Seller Disclosure Schedule to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby union covering Represented Employees or to perform its respective covenants and agreements under this any Represented Employee that Purchaser (A) will assume, adopt or follow any Collective Bargaining Agreement or (B) will offer initial terms and conditions of employment the same as or similar to consummate those currently set forth in any Collective Bargaining Agreement or any other binding agreement with Seller or an Affiliate thereof regarding compensation or benefits of Represented Employees; or
(xxii) authorize any of, or commit or agree to take, whether in writing or otherwise, or do any of, the transactions contemplated hereby on a timely basis. Notwithstanding anything foregoing actions.
(c) Anything to the contrary set forth in this Agreement notwithstanding, nothing in this Section 5.1 5.1(f) shall prohibit or Section 5.2 (otherwise restrict in any way the operation of the business of Seller, the other than Sections 5.2(b) and 5.2(f)Seller Entities or any of their respective Affiliates, to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response except solely with respect to the Pandemic or conduct of the Pandemic Measures; providedBusiness by Seller, that such party shall provide prior notice to and consult in good faith with the other party to Seller Entities, the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2Purchased Companies and their respective Affiliates.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as set forth in Section 5.2 of Business Prior to the Effective Time. During Seller Disclosure Schedules or as required by applicable Law or as otherwise contemplated or required by the period terms of this Agreement, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, and except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), Seller shall (a) Company shall, and shall cause its Subsidiaries controlled Affiliates to, ) use reasonable best efforts to (i) conduct its business the Business in all material respects in the ordinary course in all material respects consistent with past practice and use commercially reasonable efforts (ii) preserve substantially intact the Business, including relationships with suppliers, customers, distributors, employees, consultants and Governmental Entities with respect to maintain and preserve intact the Business; provided, however, that no action by Seller or its business organization, the services controlled Affiliates expressly permitted under Section 5.2(b) shall be deemed a breach of its employees and its advantageous business relationships, and this Section 5.2(a) unless such action would constitute a breach of such other provision.
(b) except as expressly required by this Agreement (including Except as set forth in Section 5.2 of the Company Seller Disclosure Schedule Schedules or the Purchaser Disclosure Schedule), as required by law applicable Law (in which case Seller shall give Purchaser prior written notice of such action required to be taken by applicable Law as soon as reasonably practicable) or as consented to in writing otherwise contemplated or required by the other partyterms of this Agreement, each of and solely with respect to the Company and Purchaser Business, Seller shall not, and shall cause their respective Subsidiaries each Seller Entity and each Target Entity not to, knowingly take do any action that would reasonably of the following without the prior consent of Purchaser (such consent not to be expected to adversely affect unreasonably withheld, conditioned or materially delay the ability to obtain delayed):
(i) except as may be required under any necessary approvals Collective Bargaining Agreement (or in connection with renewals of any Regulatory Agency Collective Bargaining Agreement) or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth any Benefit Plan, in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party each case solely to the extent such actions Collective Bargaining Agreement or Benefit Plan is disclosed in the Seller Disclosure Schedules, (A) grant to any Business Employee any increase in compensation or benefits, other than in the ordinary course of business consistent with past practice, (B) enter into any new bonus, incentive, employee benefits, severance or termination agreement or arrangement with any Business Employee, (C) adopt, enter into or amend any Transferred Benefit Plan (except for amendments that do not increase the annual cost of such Transferred Benefit Plan for Purchaser or its Affiliates by more than a de minimis amount), (D) amend the Transferred Business Independent Contractor Agreement, other than in the ordinary course of business consistent with past practice, (E) hire any new employees who would be Business Employees (except to replace Business Employees who are not Material Employees who terminate employment with the Seller Entities after the date of this Agreement), or (F) terminate the employment of any Business Employee (except for cause, as determined by the Seller in good faith and in accordance with past practice and applicable Law);
(ii) enter into or amend any Collective Bargaining Agreement or, through negotiation or otherwise, make any binding commitment to any labor organization with respect to any Business Employees, except as required by applicable Law or in connection with renewals of Collective Bargaining Agreements that (A) are consistent with past practice or (B) do not increase aggregate costs to the Business by an amount materially greater than prevailing market practice in the applicable jurisdiction;
(iii) authorize or effect any amendment to or change the Organizational Documents of any Target Entity;
(iv) issue or authorize the issuance of any equity interests or grant any options, warrants, or other rights to purchase or obtain any of its equity securities or issue, sell or otherwise require consent dispose of any of its equity securities or redeem, repurchase or otherwise acquire any securities of any Target Entity (other than to another Target Entity);
(v) except for transactions among the Seller Entities, Seller, the Target Entities and their respective Affiliates in the ordinary course, not (A) incur any Indebtedness other than in the ordinary course of business or for amounts not exceeding $2,500,000 in the aggregate, (B) make any acquisition of any assets or businesses in excess of $2,500,000 individually or $5,000,000 in the aggregate, other than acquisitions of assets in the ordinary course or any acquisitions of inventory, raw materials or similar assets in good faith, or (C) sell, pledge, dispose of or encumber any material assets or businesses other than (I) the granting of Liens to the extent required by the Seller Credit Agreement, (II) disposition of obsolete equipment in the ordinary course of business, (III) sales of immaterial assets in the ordinary course of business or (IV) sales of inventory in good faith;
(vi) enter into any Contract in relation to the Business for the purchase of real property or lease (as lessee) of real property or exercise any option to extend any leases related to the Transferred Leased Property except for extensions of any such leases that terminate in accordance with their terms prior to, or within one (1) year after, the Closing, so long as such extensions provide for annual rental payments of no more than 110% of the current annual rent with respect to such Lease;
(vii) settle any Proceedings other party than in the ordinary course of business consistent with past practice involving solely money damages of not more than $1,000,000 in the aggregate;
(viii) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law or are consistent with the Working Capital Accounting Principles or otherwise apply generally to Seller;
(ix) except in each case (i) as expressly set forth in the Pre-Closing Restructuring Plan or (ii) with respect to any Combined Tax Return as would not materially and adversely affect the Target Entities, the Purchased Assets, the Assumed Liabilities or the Business, (A) make, change or revoke any material Tax election, (B) settle or compromise any material Tax liability for an amount materially in excess of the amount reserved or accrued on the Business Financial Information, (C) change any annual Tax accounting period, (D) adopt or change any material method of Tax accounting, (E) file any amended income or other material Tax Return, (F) enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement relating to any material Tax or (G) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(x) except in each case in the ordinary course of business, (A) materially modify, amend or waive any right under any Material Contract, (B) enter into a new Contract that would have been a Material Contract if in effect on the date hereof; (C) cancel, compromise or settle any material claim, or intentionally waive or release any material right with respect to any Material Contract; or (D) terminate any Material Contract, other than any termination in accordance with the terms of any Material Contract that occurs without any action by Seller or its Affiliates;
(xi) remove, transfer or relocate any material Tangible Personal Property (or any interest therein) included in the Purchased Assets that is currently located at, on or in the Owned Real Property or the Transferred Leased Property, other than sales of Inventory in the ordinary course of business or as otherwise permitted by clause (v) of this Section 5.1 5.2(b);
(xii) accelerate, delay or alter in any material respect practices and policies relating to the rate of collection of accounts receivable or payment of accounts payable; or
(xiii) authorize any of, or commit or agree to take, whether in writing or otherwise, or do any of, the foregoing actions.
(c) Anything to the contrary in this Agreement notwithstanding, the Parties acknowledge and agree that nothing in this Section 5.25.2 shall be deemed to limit the transfer of any Excluded Assets prior to or at the Closing, or any action taken or to be taken in accordance with or pursuant to the Pre-Closing Restructuring.
(d) Anything to the contrary in this Agreement notwithstanding, nothing in this Section 5.2 shall prohibit or otherwise restrict in any way the operation of the Retained Seller Business by Seller, the other Seller Entities or their respective Affiliates.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (GCP Applied Technologies Inc.)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except (i) as set forth in Section 5.2 of Business Prior the Seller Disclosure Schedules, (ii) as required by applicable Law, (iii) as otherwise required or contemplated by the terms of this Agreement or (iv) to the Effective Time. During the period extent relating to any Retained Business, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, and except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed) (it being understood that the failure of Purchaser to respond to a written request for consent (email being sufficient) within three (3) Business Days thereafter shall be deemed to constitute consent for all purposes hereunder), Seller shall (a) Company shall, and shall cause its Subsidiaries the Purchased Entity to, conduct its business in the ordinary course in all material respects and ) use commercially reasonable efforts to maintain (A) conduct the Business in all material respects in the ordinary course and (B) preserve intact the business organization and goodwill of the Purchased Entity; provided that no action by Seller or its business organization, the services Affiliates with respect to matters specifically addressed by any other provision of its employees and its advantageous business relationships, and this Section 5.2 shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of such other provision.
(b) except as expressly required by this Agreement Except (including i) as set forth in Section 5.2 of the Company Seller Disclosure Schedule or the Purchaser Disclosure Schedule)Schedules, (ii) as required by law applicable Law, (iii) as otherwise required or as consented to in writing contemplated by the other partyterms of this Agreement or (iv) to the extent relating to the Retained Businesses, each from the date of this Agreement to the Company and Purchaser Closing, Seller shall not, and shall cause the Purchased Entity not to, do any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed) (it being understood that the failure of Purchaser to respond to a written request for consent (email being sufficient) within three (3) Business Days thereafter shall be deemed to constitute consent for all purposes hereunder):
(i) authorize or effect any amendment to, or change, the Organizational Documents of the Purchased Entity in a manner that is material or adverse to Purchaser;
(ii) issue, sell, pledge or transfer or propose to issue, sell, pledge or transfer any Equity Interests of the Purchased Entity, or securities convertible into, or exchangeable or exercisable for, or options with respect to, or warrants to purchase, or rights to subscribe for, Equity Interests of the Purchased Entity in each case other than (A) to Seller or the Purchased Entity or any of their respective Subsidiaries or (B) the granting of Permitted Liens;
(iii) make or declare any non-cash dividend or non-cash distribution in respect of the Equity Interests of the Purchased Entity;
(iv) (A) hire or engage any individual to be a Business Employee or officer or service provider to the Purchased Entity, other than (x) the hiring or engagement of Business Employees or individual service providers with annual base pay or fees not in excess of [redacted – commercially sensitive information] in the ordinary course of business consistent with past practice or (y) to replace a Business Employee or individual service provider who has resigned or been terminated for cause with a replacement Business Employee or individual service provider upon the same or substantially similar annual base pay or fees and other terms and conditions of employment or engagement, as applicable, to the replaced Business Employee or individual service provider, (B) terminate the employment of any Business Employee with annual base pay in excess of [redacted – commercially sensitive information] other than for cause, (C) engage in any “plant closing,” “mass layoff,” or similar act requiring notice under WARN, or (D) transfer internally (including in response to a request to transfer by an employee), or otherwise alter the duties and responsibilities of, any employee of Seller or any of its Affiliates (including the Purchased Entity) in a manner that would affect whether such employee is or is not classified as a Business Employee;
(v) except (A) as required under any Benefit Plan as in effect on the date of this Agreement or (B) for any special or one-time payment or award granted to a Business Employee for which Seller or its Affiliates (excluding the Purchased Entity) shall be solely obligated to pay, provided that the value of any such payment or award shall not exceed ten percent (10%) of the applicable Business Employee’s annual base salary, (x) establish, adopt, enter into or materially amend, any Purchased Entity Benefit Plan (or any arrangement that would constitute a Purchased Entity Benefit Plan, if it were in existence on the date of this Agreement), other than entering into an employment agreement or an offer letter in the ordinary course of business consistent with past practice in connection with any hiring that is not in contravention of Section 5.2(b)(iv)(A), (y) take any action to accelerate the vesting or payment, waive any right under, or fund or in any way secure the payment of, compensation or benefits (i) under any Purchased Entity Benefit Plan or (ii) with respect to any Business Employee under any Seller Benefit Plan, or (z) grant any material increase in compensation or benefits to any Business Employee or other current or former employee, officer, director or individual service provider of the Purchased Entity, except for routine annual raises to the base salary or wage rates for Business Employees with an annual base salary equal to or less than [redacted – commercially sensitive information] prior to any such increase in the ordinary course of business as part of an annual performance review that do not exceed six percent (6%) of the applicable Business Employee’s annual base salary;
(vi) (A) enter into any Collective Bargaining Agreement with any Labor Organization, or (B) voluntarily recognize or certify any Labor Organization or group of employees of Seller or any of its Affiliates (including the Purchased Entity) as the bargaining representative for any Business Employees;
(vii) grant a written waiver or release of the restrictive covenant obligations of any Business Employee with an annual base pay in excess of [redacted – commercially sensitive information];
(viii) (A) make any material acquisition of any assets or businesses in excess of [redacted – commercially sensitive information], other than acquisitions in the ordinary course of business or (B) sell, pledge, dispose of or encumber any material assets or businesses for consideration in excess of [redacted – commercially sensitive information], other than in the ordinary course of business;
(A) make or commit to make any investments in any other Person; or (B) enter into any joint venture, partnerships or strategic alliances;
(x) enter into any new line of business or abandon or discontinue any existing material line of business;
(xi) enter into any agreement that restricts the ability of the Purchased Entity to engage or compete in any line of business in any respect material to the Business, taken as a whole;
(xii) enter into any (A) Contract for the purchase or lease (as lessee) of real property providing for a purchase price or annual payments in excess of [redacted – commercially sensitive information], (B) material amendment or modification of any lease for any material Leased Property that is adverse to the Purchased Entity or otherwise voluntarily waive any material rights of the Purchased Entity under any lease for any material Leased Property, or (C) sublease of all or any material portion of any Leased Property as sublessor;
(xiii) settle any Proceeding (other than a Tax Proceeding) other than in the ordinary course of business or involving solely money damages in an amount less than [redacted – commercially sensitive information];
(xiv) except in the ordinary course of business, or as contemplated by another clause of this Section 5.2(b) or with respect to any Government Bids outstanding as of the date of this Agreement, enter into any Contract that would have been a Material Contract based on size compared to the Material Contracts listed on Section 3.12(a)(i) of the Seller Disclosure Schedule (or materially amend in a manner adverse to the Purchased Entity, terminate, modify or voluntarily waive any material rights of the Purchased Entity under any Material Contract) if entered into prior to the date hereof;
(xv) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law or consistent with the Transaction Accounting Principles or otherwise apply generally to Seller, or its Affiliates;
(xvi) (A) make, change or revoke any material Tax election, (B) adopt or change any material method of accounting for Tax purposes, (C) settle any claim or assessment in a Tax Proceeding in respect of a material amount of Taxes, (D) file any materially amended Tax Return, (E) surrender any claim for a refund of a material amount of Taxes, (F) consent to any extension or waiver (other than pursuant to automatic extensions of time to file Tax Returns) of any limitation period with respect to any claim or assessment for any Taxes, or (G) change any Tax accounting period, in each case, if such action would increase by more than a de minimis amount the Tax liability of the Purchased Entity for any taxable period (or portion thereof) beginning after the Closing Date;
(xvii) other than in the ordinary course of business, (A) sell, assign, transfer, license, convey or otherwise dispose of any material Business Intellectual Property Rights, other than non-exclusive licenses granted in the ordinary course of business or (B) allow any material Business Registered Intellectual Property Rights to lapse or go abandoned, other than at the end of its respective statutory term or in the ordinary course of prosecution of applications;
(xviii) permit the Purchased Entity to incur, create or assume any indebtedness for borrowed money (including debt evidenced by loans, notes, bonds, debentures or other similar instruments) in excess of [redacted – commercially sensitive information] in the aggregate, other than in the ordinary course of business or that will be settled, repaid or extinguished at or prior to the Closing;
(xix) permit the Purchased Entity to make loans or advances to, knowingly guarantees for the benefit of, or any investments in, any Person or forgive any Indebtedness owed by any Person, other than loans or advances to employees in the ordinary course of business and loans, advances, guarantees and investments made solely among Seller or any of the Affiliates of Seller;
(xx) (A) effect any recapitalization, reclassification or any other similar change in the capitalization of the Purchased Entity or (B) adopt any plan or agreement of complete or partial liquidation or dissolution;
(xxi) enter into any commitment for capital expenditures of the Purchased Entity or the Business to be made following the Closing in excess of [redacted – commercially sensitive information] in the aggregate;
(xxii) enter into any material transactions with any Person who is an Affiliate of Seller or the Purchased Entity, except for the Transaction;
(xxiii) take any action that would reasonably be expected to adversely affect or materially delay or be a primary cause of the ability Purchased Entity’s not coming into compliance with CMMC Level 2, third party assessment; or
(xxiv) authorize any of, or commit or agree to obtain take, whether in writing or otherwise, or do any necessary approvals of any Regulatory Agency or other Governmental Entity required for of, the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything foregoing actions.
(c) Anything to the contrary set forth in Section 5.1 or this Agreement notwithstanding, the parties acknowledge and agree that nothing in this Section 5.2 shall be deemed to limit the transfer, use, operation, acquisition or disposition of assets or Liabilities of the Retained Businesses prior to, at or after the Closing. Anything to the contrary in this Agreement notwithstanding, nothing in this Section 5.2 shall prohibit or otherwise restrict in any way the operation of the Retained Businesses.
(other than Sections 5.2(bd) and 5.2(f)Nothing contained in this Agreement shall be construed to give to Purchaser, directly or indirectly, rights to which this sentence shall not apply)control or direct the Purchased Entity’s or the Business’s operations prior to the Closing. Prior to the Closing, a party Seller and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of the operations of the Business. Purchaser acknowledges and agrees that Seller and its Subsidiaries, including the Purchased Entity, may take repay or cause to be repaid any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to Indebtedness of the Pandemic Purchased Entity or the Pandemic Measures; providedBusiness, that such party shall provide and the Purchased Entity or Business, as the case may be, may make any distribution of Cash Amounts, in each case, at any time prior to 12:01 a.m. (Eastern Standard Time) on the Closing Date without the consent of, or notice to and consult in good faith with the other party to the extent such actions would otherwise require consent to, Purchaser or any of the other party under this Section 5.1 its Affiliates or Section 5.2Representatives.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (MDA Space Ltd.)
Covenants Relating to Conduct of Business. 5TC Section 6.1. 1Conduct Conduct of Business Prior to by the Effective TimeCompany Pending the Merger TC . During the period from the date of this Agreement to until the earlier of the Effective Time or earlier termination such time as Parent's and Sub's designees shall constitute a majority of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in Board of Directors of the case of clause (b)Company, the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause each of its Subsidiaries to, conduct in all material respects, except as contemplated by this Agreement, carry on its business in the ordinary course as currently conducted and, to the extent consistent therewith, with no less diligence and effort than would be applied in all material respects and use commercially reasonable efforts the absence of this Agreement, seek to maintain and preserve intact its their current business organizationorganizations, keep available the services of its their current officers and employees and its advantageous preserve their relationships with customers, suppliers and others having business relationshipsdealings with them to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and (b) except as expressly required otherwise contemplated by this Agreement (including as set forth in Agreement, during such period, the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause their respective not permit any of its Subsidiaries not to, knowingly take without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed): (a) amend or propose to amend its Articles of Incorporation or By-laws (or comparable governing instruments) or change the number of directors constituting the entire Board of Directors of the Company or any action that would reasonably be expected of its Subsidiaries; (b) authorize for issuance, issue, deliver, grant, sell, pledge, or otherwise dispose of or propose to adversely affect issue, deliver, grant, sell, pledge or materially delay the ability to obtain any necessary approvals otherwise dispose of any Regulatory Agency shares of, or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any shares of, the capital stock or other Governmental Entity required securities of the Company or any of its Subsidiaries including, but not limited to, stock appreciation rights, phantom stock, any securities convertible into or exchangeable for shares of stock of any class of the transactions contemplated hereby Company or to perform any of its respective covenants and agreements under this Agreement or to consummate Subsidiaries; provided, however, that the transactions contemplated hereby on a timely basis. Notwithstanding anything foregoing shall not prohibit the issuance of Shares upon the exercise of Company Options granted prior to the contrary date of this Agreement; (c) split, combine or reclassify any shares of its capital stock or declare, pay or set forth aside any dividend or other distribution (whether in Section 5.1 cash, stock, securities or Section 5.2 other property or any combination thereof) in respect of its capital stock, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire, directly or indirectly, any shares of its capital stock or other securities; (other than Sections 5.2(b) and 5.2(fd), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct of Business Prior to the Effective Time. During the period from (a) From the date of this Agreement to until the Effective Time Closing (or earlier the termination of this Agreement), except as expressly contemplated or permitted by this Agreement (including i) as set forth in Section 5.2(a) of the Company Seller Disclosure Schedule)Schedules, (ii) as required by law applicable Law or as consented otherwise expressly contemplated by the terms of this Agreement, (iii) to in writing by Purchaser (or, in the case of clause (b)extent related to the Excluded Assets, the CompanyRetained Liabilities or the Retained Businesses, (iv) as required or reasonably necessary to respond to COVID-19 (including the COVID-19 Measures) but excluding voluntary participation in any loans, bail-outs or government funding programs, or (v) as Purchaser may otherwise consent to (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company Seller shall, and shall cause its Subsidiaries each other Seller Entity to, use commercially reasonable efforts to: (A) conduct its business the Business in the ordinary course in all material respects course, (B) preserve intact its current business organization and goodwill associated with the Business, (C) use commercially reasonable efforts to maintain and preserve intact its business organization, the services present relationships of its employees Seller and its advantageous Subsidiaries with Business Employees, consultants, customers, suppliers, other business relationshipsrelations of the Business and Governmental Entities, and (D) dedicate efforts and resources to the development and registration of the Products consistent with past practice of the Business (including dedicating such efforts with respect to existing submissions to regulatory authorities); provided, however, that no action by Seller or its Subsidiaries with respect to matters specifically addressed by Section 5.2(b) (or any item set forth in Section 5.2(b) of the Seller Disclosure Schedules) shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of Section 5.2(b).
(b) except as expressly required by From the date of this Agreement until the Closing (including or the termination of this Agreement), except (i) as set forth in Section 5.2(b) of the Company Seller Disclosure Schedule Schedules, (ii) as required by applicable Law or as otherwise expressly contemplated by the terms of this Agreement, (iii) to the extent related to the Excluded Assets, the Retained Liabilities or the Purchaser Disclosure ScheduleRetained Businesses, (iv) as required or reasonably necessary to respond to COVID-19 (including the COVID-19 Measures), required by law or (v) as consented Purchaser may otherwise consent to in writing by the other party(such consent not to be unreasonably withheld, each of the Company and Purchaser conditioned or delayed), Seller shall not, and shall cause their respective Subsidiaries each Seller Entity not to, knowingly take in each case solely with respect to the Business, do any action of the following:
(i) incur, create or assume any Lien, other than Permitted Liens, with respect to any material asset of the Business, including any material Purchased Assets, other than (A) those that may be discharged at or prior to the Closing or (B) in the ordinary course of business;
(ii) acquire any assets or dispose, lease, license or transfer of any assets of the Business (other than Business Intellectual Property), including the Purchased Assets (other than Business Intellectual Property), in each case, other than (A) purchases and sales of inventory in the ordinary course of business, (B) transactions where the amount of upfront consideration paid or transferred in connection with such transactions would not exceed $2,000,000 in the aggregate or (C) acquisitions or dispositions from or to any of the Seller Entities or their Subsidiaries;
(iii) acquire any corporation, partnership, limited liability company, other business organization or division thereof to be included in the Purchased Assets or the Business;
(iv) settle, or offer or propose to settle, any Proceeding involving the Business or the Purchased Assets, except where such settlement would not impose any material equitable relief or other restriction on the Business and would not involve an admission of wrongdoing by Seller or any of its Affiliates with respect to the Business or the Purchased Assets;
(v) (A) amend any material term of, waive any material right under or voluntarily terminate (other than upon expiration in accordance with its terms), any Material Contract, or (B) enter into any Contract that, if in effect on the date hereof, would be a Material Contract, other than, in each case of clauses (A) and (B), in the ordinary course of business;
(vi) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law or are consistent with GAAP or otherwise apply generally to Seller;
(vii) terminate or fail to renew any existing Permit or Product Registration that is material to the Business taken as a whole and included in the Purchased Assets;
(viii) make any commitments for capital expenditures in excess of $2,000,000 in the aggregate;
(ix) make any material change to its policies or practices regarding collection of accounts receivable or payment of accounts payable;
(x) materially increase the annual rate of total target direct compensation of any Business Employee, except as required by Law or the terms of any Seller Benefit Plan existing prior to the date of this Agreement;
(xi) (A) except for one currently open Senior Director position previously disclosed to Purchaser, hire any person who would be a Business Employee holding a title of Senior Director or above, or promote any Business Employee at or to the level of Senior Director or above, (B) except for cause, dismiss or give notice to terminate any Business Employee (or person who, absent such dismissal or termination, would be a Business Employee) holding a title of Senior Director or above, or (C) change the roles and responsibilities of any person that would reasonably be expected a Business Employee if such determination were to adversely affect occur as of signing in a manner that would cause such person to cease to be a Business Employee as of Closing;
(xii) sell, assign, transfer, license, terminate, cancel or materially delay abandon (without filing a continuation application, divisional application or request for continued examination) any material right in any Business Intellectual Property that any Seller Entity Controls the ability prosecution of, or grant a sublicense under any material license agreement, in each case other than the grant of nonexclusive licenses and sublicenses in the ordinary course of business;
(xiii) (A) transfer any asset of the Business to obtain any necessary approvals an Affiliate of Seller that is not a Subsidiary of Seller, or (B) transfer the equity of any Regulatory Agency Subsidiary of Seller that holds assets of the Business in a manner that such Subsidiary ceases to be a Subsidiary of Seller;
(xiv) engage in any research or other Governmental Entity required for development activities that, if conducted as of the transactions contemplated hereby or to perform its respective covenants and agreements under date of this Agreement or to consummate as of the transactions contemplated hereby on Closing Date, would constitute a timely basis. Notwithstanding anything to breach of the contrary representation and warranty set forth in Section 5.1 3.8(b); or
(xv) authorize any of, or commit or agree to take, whether in writing or otherwise, or do any of, the foregoing actions.
(c) Nothing contained in this Agreement shall be construed to give to Purchaser, directly or indirectly, rights to control or direct the Business’s operations prior to the Closing. Prior to the Closing, Seller (and its Subsidiaries) shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of the operations of the Business. Notwithstanding anything in this Agreement to the contrary, the Parties acknowledge and agree that nothing in this Section 5.2 (shall be deemed to limit any activities of the Retained Businesses, including any sale or other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to transfer of the Pandemic Excluded Assets or the Pandemic Measures; providedRetained Liabilities, that such party shall provide prior notice to and consult in good faith with to, at or after the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2Closing.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Agios Pharmaceuticals, Inc.)
Covenants Relating to Conduct of Business. 5. 1Conduct Section 7.1 Conduct of Business Prior to by the Company Pending the Merger. From the date hereof until the Effective Time. During the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth unless Parent shall otherwise consent in the Company Disclosure Schedule)writing, required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such which consent shall not to be unreasonably withheld, conditioned delayed or delayed)conditioned, (a) or except as listed on Section 7.1 of the Company Disclosure Letter, as otherwise permitted by or provided for in this Agreement or as required by Applicable Law, the Company shall, and shall cause its each of the Company Subsidiaries to, (x) conduct its business in the ordinary course in all material respects consistent with past practice and (y) to the extent consistent with the foregoing clause (x) use commercially reasonable efforts to maintain and preserve substantially intact its business organizationorganization and preserve in all material respects its relationships with all Governmental Entities, the services of its current employees and its advantageous business relationshipscurrent creditors, and with any customers, suppliers, vendors, licensors and licensees with which it has material business relations; provided, however, that no action by the Company or the Company Subsidiaries with respect to matters specifically addressed by any provision of Section 7.1(a) through (bp) shall be deemed a breach of clauses (x) or (y) unless such action would constitute a breach of such specific provision. In addition to and without limiting the generality of the foregoing, except as expressly required by this Agreement (including as set forth in listed on Section 7.1 of the Company Disclosure Schedule Letter, as otherwise permitted by or the Purchaser Disclosure Schedule), provided for in this Agreement or as required by law Applicable Law, from the date hereof until the Effective Time, without the prior written consent of Parent, which consent shall not be unreasonably withheld, delayed or as consented to in writing by the other partyconditioned, each of the Company and Purchaser shall not, and shall cause not permit any Company Subsidiary to:
(a) adopt or propose any change in its Constituent Documents;
(b) declare, authorize, set aside or pay any stockholder dividend or other distribution, except for (i) any dividend or distribution by a Company Subsidiary to the Company or another Company Subsidiary and (ii) the payment of regular quarterly cash dividends (which, for the avoidance of doubt, shall not exceed the amount of the regular quarterly cash dividends paid by the Company during the previous twelve (12) months);
(c) adopt any plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary, or merge or consolidate with any other Person or acquire any assets or equity or debt securities or other equity interests in any other Person, except (i) that a Company Subsidiary may merge with another wholly-owned Company Subsidiary and (ii) for any acquisitions (including by way of merger) by the Company or any Company Subsidiary of any Person providing for purchase price consideration (including any related earnouts or indebtedness) in an amount not in excess of Thirty Million Dollars ($30,000,000) in the aggregate and (iii) for acquisitions of inventory, supplies and other assets in the ordinary course of business consistent with past practice;
(d) sell, assign, transfer, lease, license, subject to an Encumbrance (other than a Permitted Encumbrance), cancel, abandon or otherwise surrender, relinquish or dispose of any assets or property of the Company or any Company Subsidiary, other than (i) in the ordinary course of business consistent with past practice (including non-exclusive licenses of Intellectual Property granted in the ordinary course of business consistent with past practice) (for the avoidance of doubt, the sale, lease or other disposition of any business line, business unit or any material portion of the assets of the Company or any Company Subsidiary is not “in the ordinary course of business” for purposes of this clause (d)), (ii) pursuant to existing written contracts or commitments, (iii) cancellations and abandonments of Intellectual Property that would not be material to the operations of the Company or any Company Subsidiary and as determined by the Company’s personnel responsible for filing and maintaining such Company Owned IP using their respective Subsidiaries reasonable business judgment or (iv) in an amount not in excess of Thirty Million Dollars ($30,000,000) in the aggregate;
(e) (i) issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or other security) or enter into any amendment of any term of any of its outstanding securities (other than issuances of Common Shares (A) in respect of the exercise of Options outstanding on the date hereof, (B) in respect of the settlement of Restricted Stock Rights or Performance Restricted Stock Units outstanding on the date hereof and (C) pursuant to Performance Restricted Stock Units and/or Restricted Stock Rights granted to new hires in accordance with Section 7.1(h)), (ii) accelerate the vesting of any Options, Performance Restricted Stock Units or Restricted Stock Rights (other than as required pursuant to preexisting contractual commitments), (iii) split, combine, subdivide or reclassify any shares of capital stock or any other equity interests of the Company or any Company Subsidiary or (iv) purchase or redeem any shares of capital stock or any other equity interests of the Company or any Company Subsidiary or any rights, warrants or options to acquire any such shares or interests, other than (A) as otherwise contractually required, (B) any such purchases or redemptions by a wholly-owned Company Subsidiary with respect to such Company Subsidiary’s own capital stock or other equity interests or (C) in connection with the exercise of Options or the vesting of Performance Restricted Stock Units or Restricted Stock Rights (including in connection with any required withholding Taxes related to such exercise or vesting);
(f) incur, guarantee or assume any indebtedness or make any loans, advances or capital contributions to, knowingly or investments in, any Person, other than (i) borrowings under the Company’s existing revolving credit facility in an amount not in excess of Thirty Million Dollars ($30,000,000) in the aggregate, or (ii) any intercompany indebtedness, loan, advance, capital contribution or investment;
(g) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(h) other than as required by the terms of any applicable agreement or Company Benefit Plan in existence on the date of this Agreement or as set forth on Section 7.1(h) of the Company Disclosure Letter (i) increase the compensation or benefits of any current or former directors or officers of the Company at the level of vice president or above (except for merit salary increases in the ordinary course of business and consistent with past practice to employees who are not executive officers), (ii) provide increases in salaries, wages and benefits (and communicate increases in bonuses to the extent bonuses are based on salary or wage level) of independent contractors or employees who are not at the level of vice president or above or directors of the Company (other than annual merit salary increases in the ordinary course of business and consistent with past practice), (iii) enter into any change-in-control, retention, employment, severance, termination or other similar agreement with any current or former director, employee or independent contractor, (iv) establish, adopt, terminate or materially amend any Company Benefit Plan (or award thereunder) or any plan, program, arrangement, practice or agreement that would be a Company Benefit Plan if it were in existence on the date hereof, except to the extent that such amendment would not result in more than a de minimis increase to the cost to the Company under such arrangement or plan, (v) pay any bonus to any current or former director, employee, officer, or independent contractor of the Company, (vi) take any action that would reasonably be expected to adversely affect amend, waive or materially delay accelerate the ability to obtain any necessary approvals vesting criteria or vesting requirements of payment of any Regulatory Agency compensation or benefit under any Company Benefit Plan, (vii) promote any Company Employee who is an officer to a position more senior than such Company Employee’s position as of the date of this Agreement, or promote a Company Employee who is below the level of vice president to a position at the level of vice president or above, in each case other Governmental Entity than promotions to fill a position that exists as of the date of this Agreement that is thereafter vacated, (viii) take any action to accelerate the payment, or to fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan or (ix) forgive any loans, or issue any loans (other than routine travel or business expense advances issued in the ordinary course of business), to any current or former employee, officer, director or independent contractor of the Company; provided, however, that the foregoing clauses (i) through (iv) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees who are below the level of vice president or to employees in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, plans, agreements, benefits and compensation arrangements (including incentive grants) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions or from continuing to make cash awards to employees who are below the level of vice president in the ordinary course of business consistent with past practice;
(i) change any method of accounting or accounting principles or practices followed by the Company or any Company Subsidiary, except for any such change required for by a change in U.S. GAAP or as recommended by the Company’s audit committee or independent auditors;
(j) pay, discharge, settle or satisfy (i) any material litigation (other than litigation in connection with (x) this Agreement or the transactions contemplated hereby or to perform its respective covenants and agreements under (y) violations of any Healthcare Law), arbitration, proceeding, investigation, order, claim, liability or obligation outside the ordinary course of business or that would result in any liability in excess of Thirty Million Dollars ($30,000,000) in the aggregate or such greater amount reserved therefore or reflected on the balance sheets included in the Company Reports, (ii) any material litigation in connection with this Agreement or to consummate the transactions contemplated hereby hereby, other than any settlement or compromise that (A) does not involve any monetary payment (other than reimbursement of attorneys’ fees) and (B) does not impose any material restrictions on a timely basis. Notwithstanding anything the business of the Company, any Company Subsidiary, the Surviving Corporation or on Parent or any of its Subsidiaries (after giving effect to the contrary transactions contemplated by this Agreement) or (iii) any material litigation, arbitration, proceeding, investigation, order, claim, liability or obligation with a Governmental Entity in connection with violations of any Healthcare Law;
(k) fail to maintain, or terminate or cancel, other than in the ordinary course of business, any insurance coverage maintained by the Company or any Company Subsidiary with respect to any material assets, properties and businesses of the Company or any Company Subsidiary without replacing such coverage with a comparable amount of insurance coverage;
(l) (i) enter into any new contract that would have been a Company Contract if it had been entered into prior to the date of this Agreement or (ii) amend on terms materially adverse to the Company, cancel or terminate any Company Contract, in each case, other than in the ordinary course of business consistent with past practice;
(m) make or authorize any new capital expenditures other than capital expenditures set forth in Section 5.1 the 2015 budget materials provided to Parent and any other capital expenditures not in excess of Thirty Million Dollars ($30,000,000) in the aggregate;
(i) make, change or Section 5.2 (other than Sections 5.2(b) and 5.2(f)revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any material amended Tax Return, enter into any material closing agreement with respect to which this sentence shall not apply)Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a party and its Subsidiaries may refund of a material amount of Taxes, take any commercially reasonable actions action which is reasonably likely to result in a material increase in the Tax liability of the Company or the Company Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or the Surviving Corporation; or (ii) file the 2014 federal consolidated income Tax Return without (A) providing Parent with a draft form of such Tax Return at least fifteen (15) Business Days before filing; it being understood that such party reasonably determines are necessary or prudent for it to take or Tax Return may not take in response to the Pandemic or the Pandemic Measures; provided, be complete at that such party shall provide prior notice to time; and consult (B) considering in good faith with the other party any comments reasonably requested by Parent that are provided to the extent Company at least seven (7) Business Days before filing;
(o) (i) terminate (prior to the expiration of such actions would otherwise require consent Company Real Property Lease), or (except as permitted by clause (ii) of this Section 7.1(o)) modify or amend on terms materially adverse to the Company, any of the Company Real Property Leases, (ii) renew, extend, or exercise any option to renew or extend any of the Company Real Property Leases, other party than (A) for any renewals or extensions of Company Real Property Leases expiring prior to the date that is fifteen (15) months after the date hereof, in each case, solely in the ordinary course of business consistent with past practice for additional periods of no more than twelve (12) months (in the aggregate with respect to any such Company Real Property Lease) at a cost per month of no more than 105% of the current costs per month under such Company Real Property Lease, and solely provided that the Company notifies Parent of each such renewal or extension reasonably promptly after it is effected or (B) any renewals or extensions of Company Real Property Leases in accordance with automatic renewal terms or (iii) enter into any new contract that, if in effect on the date of this Section 5.1 Agreement, would be a Company Real Property Lease, except that the Company shall be permitted to enter into such new leases for the purpose of relocating from a current space to another for additional periods of no more than twelve (12) months at a cost per month of no more than 105% of the current costs per month under the prior Company Real Property Lease for that space, and solely provided that the Company notifies Parent of each such relocation reasonably promptly after it is effected; or Section 5.2(p) agree or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Omnicare Inc)
Covenants Relating to Conduct of Business. 5SECTION 5.01. 1Conduct Conduct of Business Prior of the Company. Except as set forth in Section 5.01 of the Company Disclosure Schedule, except as otherwise expressly permitted by this Agreement or the Stock Option Agreement or except as consented to the Effective Time. During by Parent (in its sole discretion), during the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b)Time, the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause its Subsidiaries subsidiaries to, conduct its business carry on their respective businesses in the ordinary course consistent with past practice and in compliance in all material respects with all applicable laws and regulations and, to the extent consistent therewith, use commercially reasonable best efforts to maintain and preserve intact its their current business organizationorganizations, to keep available the services of its their current officers and other key employees and its advantageous to preserve their relationships with those persons having business relationshipsdealings with them to the end that their goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing (but subject to the above exceptions), and (b) except as expressly required by during the period from the date of this Agreement (including as set forth in to the Effective Time, the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser shall not, and shall cause not permit any of its subsidiaries to:
(a) other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent, (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except for issuances of Company Common Stock upon the exercise of Company Stock Options under the Company Stock Option Plans or in connection with other awards under the Company Stock Option Plans outstanding as of the date hereof in accordance with their respective Subsidiaries not present terms, (iii) except pursuant to agreements entered into with respect to the Company Stock Options pursuant to Section 2.04, purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities or (iv) make any other actual, constructive or deemed distribution in respect of any shares of its capital stock or otherwise make any payments to stockholders in their capacity as such;
(b) issue, deliver, sell, pledge or otherwise encumber or subject to any Lien any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities (other than the issuance of Company Common Stock upon the exercise of Company Stock Options outstanding as of August 31, 2000 in accordance with their present terms);
(c) amend its certificate of incorporation, by-laws or other comparable organizational documents;
(d) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any person;
(e) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets (including securitizations), other than in the ordinary course of business consistent with past practice;
(f) except for borrowings under credit facilities or lines of credit existing on the date hereof, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for the obligations of any person, or make any loans, advances or capital contributions to, knowingly take or investments in, any person other than its wholly owned subsidiaries, except in the ordinary course of business consistent with past practice and in amounts not material to the maker of such loan, advance, capital contribution or investment;
(g) take, or agree to commit to take, any action that would or is reasonably be expected likely to adversely affect result in any of the conditions to the Offer set forth in Annex A or any of the conditions to the Merger set forth in Article VII not being satisfied, or that would materially impair the ability of the Company, Parent, Purchaser or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(h) make any capital expenditure or expenditures other than capital expenditures for computers, furniture and equipment not exceeding $250,000 in the ability aggregate;
(i) make or revoke any Tax election, settle or compromise any Tax liability material to obtain the Company or any of its subsidiaries, or change (or make a request to any taxing authority to change) its Tax or accounting methods, policies, practice or procedures, except in each case as required by applicable law or generally accepted accounting principles;
(j) except as required under an existing Company Benefit Plan, (i) grant or commit to grant any employee, shareholder, officer, director or agent of the Company, any increase in wages, bonus, severance, profit sharing, retirement, insurance or other compensation or benefits (other than an increase in wages in the ordinary course of business consistent with past practice for any individual other than a director or officer of the Company or any of its subsidiaries), (ii) amend or terminate any Company Benefit Plan, except to the extent necessary approvals to comply with applicable law, (iii) establish any new compensation or benefit plan or arrangement, (iv) enter into any employment, consulting, retention, termination, severance or collective bargaining agreement or (v) enter into any Change in Control Agreement;
(k) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory or writing-off notes or accounts receivable other than in the ordinary and usual course of business consistent with past practice or as required by generally accepted accounting principles;
(i) enter into any contract or agreement, other than in the ordinary course of business consistent with past practice, or amend in any material respect any of the Material Contracts or the Real Property Leases other than in the ordinary course of business; or (ii) enter into any contract, agreement, commitment or arrangement providing for, or amend any contract, agreement, commitment or arrangement to provide for, the taking of any Regulatory Agency action that would be prohibited hereunder;
(m) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other Governmental Entity required for than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice of liabilities reflected or reserved against in the consolidated financial statements of the Company and its subsidiaries or incurred in the ordinary and usual course of business consistent with past practice;
(n) settle or compromise any pending or threatened suit, action or claim relating to the transactions contemplated hereby hereby;
(o) enter into any agreement or arrangement that would limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or in any geographic area; or
(p) authorize, or commit or agree to perform its respective covenants and agreements under this Agreement or to consummate take, any of the transactions contemplated hereby on a timely basis. Notwithstanding anything to foregoing actions; provided that the contrary limitations set forth in this Section 5.1 or Section 5.2 5.01 (other than Sections 5.2(bclause (a)) and 5.2(f), to which this sentence shall not apply), a party apply to any transaction between the Company and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary wholly owned subsidiary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent between any wholly owned subsidiaries of the other party under this Section 5.1 or Section 5.2Company.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except (i) as set forth in Section 5.2 of Business Prior to the Effective Time. During Seller Disclosure Schedules, (ii) as required by applicable Law, (iii) as otherwise required or contemplated by the period terms of this Agreement, including Section 5.13, or (iv) for actions required or contemplated by the Pre-Closing Reorganization Transaction Steps Schedule or the Pre-Closing Reorganization Transactions, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, and except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), Seller shall (aand shall cause the Transferred Entities to) Company shalluse commercially reasonable efforts to (w) conduct the Business in all material respects in the ordinary course of business and in compliance with applicable Laws, (x) preserve intact the Business and the Purchased Assets (including the reputation and goodwill associated therewith) and preserve the relationships of the Business with customers, suppliers, licensors, licensees, distributors, agents and contractors; (y) maintain accurate books and records of the Business consistent with past practice; and (z) make all filings related to the Business Permits required to be filed in connection with the operation of the Business.
(b) Except (i) as set forth in Section 5.2 of the Seller Disclosure Schedules, (ii) as required by applicable Law, (iii) as otherwise required or contemplated by the terms of this Agreement, including Section 5.13, or (iv) actions required or expressly contemplated by the Pre-Closing Reorganization Transaction Steps Schedule or the Pre-Closing Reorganization Transactions, from the date of this Agreement to the Closing, and solely with respect to the Business, Seller shall not, and shall cause its Subsidiaries not to, conduct its business do any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) authorize or effect any amendment to, or change, the organizational documents of any Transferred Entity;
(ii) issue, sell, pledge or transfer or propose to issue, sell, pledge or transfer any equity interests of any of the Transferred Entities, or securities convertible into, or exchangeable or exercisable for, or options with respect to, or warrants to purchase, or rights to subscribe for, equity interests of any of the Transferred Entities;
(iii) except (A) in the ordinary course of business, (B) as may be required under any Benefit Plan or contemplated pursuant to Section 5.6, (C) as otherwise reflected in all the Business Financial Statements, or (D) for any grant for which Seller or its Affiliates shall be solely obligated to pay, grant to any Business Employee who is a member of the senior leadership team of the Business (which persons are set forth on Schedule 5.2(b)(iii)(D)) any material respects increase in compensation or benefits;
(iv) (A) make any material acquisition of any assets or businesses in excess of $1,000,000 other than acquisitions of businesses or assets in the ordinary course of business, already contracted by Seller, any Transferred Entity or their respective Affiliates or (B) sell, pledge, dispose of or encumber any material assets or businesses other than in the ordinary course of business, and use commercially reasonable efforts sales or dispositions of businesses or assets already contracted by Seller, any Transferred Entity or their respective Affiliates, inventory or obsolete assets, or as may be required by applicable Law;
(v) (A) enter into, renew or extend the term of any Real Property Lease or (B) terminate, deliver a notice of termination, waive or accelerate any material claim or right, or breach or default under any Real Property Lease;
(vi) acquire any real property;
(vii) enter into any new project or Contract with regards to maintain a new project (A) which is outside of the ordinary course of business consistent with past practice or (B) other than a Government Bid for which Seller or the Transferred Entities are not contractually obligated to accept any resulting Contract award which involves a Collective Bargaining Agreement;
(viii) settle any Proceeding, except for any Proceeding in the ordinary course of business and preserve intact its business organizationfor an amount not in excess of $250,000;
(ix) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than (A) such changes as are required by GAAP or applicable Law and (B) any changes as requested or mandated by any Governmental Entity, including the Defense Contract Audit Agency or the Defense Contract Management Agency;
(A) other than non-exclusive licenses or non-exclusive sublicenses granted in the ordinary course of business, sell, assign, transfer or grant any license or sublicense to any Company Business Intellectual Property or (B) allow any Registered Intellectual Property to lapse or go abandoned;
(xi) permit any Transferred Entity to incur, create or assume, (A) any indebtedness for borrowed money (including debt evidenced by loans, notes, bonds, debentures or other similar instruments) or (B) any Lien, other than Permitted Liens, with respect to any material asset of the Business;
(xii) (A) make, revoke or change any material Tax election, (B) adopt or change any material accounting method with respect to Taxes other than as required by applicable Law, (C) surrender any right to claim a refund of a material amount of Taxes, (D) consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment, (E) amend, modify or otherwise change any filed Tax Return, (F) settle any material Tax audits or examinations, or (G) enter into any closing agreement in respect of Taxes;
(xiii) enter (or commit to enter) into, amend, terminate or extend any (A) Transferred Entity Benefit Plan or (B) other than as required to bid on, or fulfill, a specific project, Collective Bargaining Agreement (or enter into negotiations to do any of the foregoing), with respect to the Transferred Entities or any Business Employee;
(xiv) (A) plan, announce, implement or effect any reduction in force, layoff, early retirement program, severance program or effort concerning the termination of Business Employees or other employees or individual service providers of the Transferred Entities (other than reductions as a result of a project termination or other loss of work of a specific project that ends between the date of this Agreement and the Closing (“Covered Project Termination”)), (B) terminate the employment or engagement of any Business Employee or other employee or individual service provider of the Transferred Entities (other than employment terminations of Business Employees for cause, as reasonably determined by the Company, death or disability, or for Business Employees who are not Key Employees, as a result of a Covered Project Termination) or (C) except for Business Employees or other employees or individual service providers of the Transferred Entities directly billed to customers, hire or engage any Business Employee or other individual service provider Relating to the Business of the Company, other than hiring or engaging any such individual in order to fill a vacancy in the Ordinary Course of Business or upon a termination for cause or due to death or disability, provided that the annual base salary of such replacement employee or annual compensation of such other individual service provider is less than $150,000 per year; or
(xv) terminate, establish, adopt, amend, modify or agree to terminate, establish, adopt, amend or modify (or announce an intention to terminate, establish adopt, amend or modify) any, Transferred Entity Benefit Plans or the Employment Agreements;
(xvi) take an action (or fail to take any action) which would constitute “good reason”, in each case as defined under the respective Employment Agreement for each such Key Employee; or
(xvii) authorize any of, or commit or agree to take, whether in writing or otherwise, or do any of, the services of its employees and its advantageous business relationships, and foregoing actions.
(bc) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each of the Company and Purchaser Seller shall not, and shall cause their respective its Subsidiaries not to, knowingly take enter into any action that would reasonably Contract (including any Contract awarded as a result of a pending Government Bid) which is set forth on Exhibit L without the prior written consent of Purchaser (which consent shall not be expected to adversely affect unreasonably withheld, conditioned or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything delayed).
(d) Anything to the contrary set forth in Section 5.1 or this Agreement notwithstanding, the parties acknowledge and agree that nothing in this Section 5.2 shall be deemed to limit the transfer, use operation, acquisition or disposition of the Retained Business prior to, at or after the Closing. Anything to the contrary in this Agreement notwithstanding, nothing in this Section 5.2 shall prohibit or otherwise restrict in any way the operation of the business of Seller, the Transferred Entities, or their respective Affiliates, except solely with respect to the conduct of the Business by the Seller, the Transferred Entities and their respective Affiliates.
(other than Sections 5.2(be) and 5.2(f)Nothing contained in this Agreement shall be construed to give to Purchaser, directly or indirectly, rights to which this sentence shall not apply)control or direct the Business’s operations prior to the Closing. Prior to the Closing, a party Seller and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; providedshall exercise, that such party shall provide prior notice to and consult in good faith consistent with the other party to the extent such actions would otherwise require consent terms and conditions of this Agreement, complete control and supervision of the other party under this Section 5.1 or Section 5.2operations of the Business.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct Pending the Closing
6.1 Conduct of the Business Prior to Pending the Effective Time. Closing.
(a) During the period from the date of this Agreement and continuing until the Closing, each of the Stockholder and the Company agrees, that neither the Stockholder nor the Company shall, and shall cause the Company Subsidiaries not to, engage in any business whatsoever other than in connection with the consummation of the transactions contemplated by this Agreement and the Merger Agreement, and shall use commercially reasonable efforts to preserve intact its business and assets, maintain its assets in good operating condition and repair (ordinary wear and tear excepted), retain the services of its officers, employees and independent contractors and use reasonable commercial efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained with respect to its business, unless, in any case, BBI consents otherwise in writing.
(b) During the period from the date of this Agreement and continuing until the Closing, each of the Stockholder and the Company agrees as to itself and, with respect to the Effective Time or earlier termination of this AgreementCompany, the Company Subsidiaries, that except as expressly contemplated or permitted by this Agreement Agreement, or to the extent that the other party shall otherwise consent in writing:
(including i) It shall not amend or propose to amend its certificate of incorporation or by-laws or equivalent organizational documents except as set forth contemplated in this Agreement.
(ii) It shall not, nor in the case of the Company Disclosure Schedule)shall it permit the Company Subsidiaries to, required by law issue, deliver, sell, redeem, acquire, authorize or as consented propose to in writing by Purchaser (orissue, deliver, sell, redeem, acquire or authorize, any shares of its capital stock of any class or any securities convertible into, or any rights, warrants or options to acquire, any such shares or convertible securities or other ownership interest and, in the case of clause (b)the Stockholder, shall not sell or otherwise transfer the Company) (such consent not Shares, provided that the Company shall be permitted to issue the shares of its Common Stock to be unreasonably withheldissued to the stockholders of BBI under the terms of the Merger Agreement.
(iii) It shall not, conditioned or delayed), (a) nor in the case of the Company shall, and shall cause its it permit any of the Company Subsidiaries to, conduct nor shall it propose to: (i) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its business capital stock or (ii) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock.
(iv) Other than dispositions in the ordinary course of business consistent with past practice which would not cause a Material Adverse Effect, individually or in all material respects the aggregate, to it and use commercially reasonable efforts to maintain and preserve intact its business organizationsubsidiaries, the services taken as a whole, it shall not, nor shall it permit any of its employees and subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of its advantageous business relationships, and assets.
(bv) except as expressly required by this Agreement (including as set forth It shall promptly advise the other party hereto in writing of any change in the Company Disclosure Schedule condition (financial or otherwise), operations or properties, businesses or business prospects of such party or any of its subsidiaries which would result in a Material Adverse Effect.
(vi) It shall not permit to occur any (1) change in accounting principles, methods or practices, investment practices, claims, payment and processing practices or policies regarding intercompany transactions, (2) incurrence of Indebtedness or any commitment to incur Indebtedness, any incurrence of a contingent liability, Contingent Obligation or other liability of any type, (3) cancellation of any debt or waiver or release of any contract, right or claim, except for cancellations, waivers and releases in the ordinary course of business consistent with its past practice which do not exceed $10,000 in the aggregate, (4) amendment, termination or revocation of, or a failure to perform obligations or the Purchaser Disclosure Schedule)occurrence of any default under, required by law (Y) any contract or agreement (including, without limitation, leases) to which it is or, as consented to in writing by the other of December 31, 2006, was a party, each other than in the ordinary course of the Company and Purchaser business consistent with past practice, or (Z) any License, (5) execution of termination, severance or similar agreements with any of its officers, directors, employees, agents or independent contractors or (6) entering into any leases of real property or agreement to acquire real property.
(vii) It shall not, and the Company shall cause their respective not permit any of the Company Subsidiaries not to, knowingly take or agree or commit to take any action action, (i) that would is reasonably be expected likely to adversely affect make any of its representations or materially delay the ability to obtain any necessary approvals of any Regulatory Agency warranties hereunder inaccurate; or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything (ii) that is prohibited pursuant to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which provisions of this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2Article VI.
Appears in 1 contract
Sources: Stock Purchase Agreement (Captech Financial Group, Inc)
Covenants Relating to Conduct of Business. 5. 1Conduct Section 7.1 Conduct of Business Prior to by New Company and the Company Pending the Mergers. From the date hereof until the First Effective Time. During , unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, delayed or conditioned (provided that consent of Parent shall be deemed to have been given if Parent does not object within ten (10) Business Days after a written request for such consent is provided by the period from Company to Parent) or except (i) as listed in Section 7.1 of the date of this Agreement to the Effective Time Company Disclosure Letter, (ii) as otherwise expressly permitted by or earlier termination of provided for in this Agreement, except as expressly contemplated (iii) for payment by New Company, the Company or permitted by this Agreement any Company Subsidiary of the amount with respect to a particular line item (including as plus ten percent (10%) of the amount set forth with respect to any particular line item listed therein) set forth in the 2025 annual projection materials set forth in Section 7.1 of the Company Disclosure Schedule)Letter (the “2025 Budget”) or in a budget for the 2026 fiscal year which 2026 fiscal budget either (x) is approved by Parent in writing, required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent approval not to be unreasonably withhelddelayed, withheld or conditioned or delayed(y) conforms to the requirements of Section 7.1 of the Company Disclosure Letter (the “2026 Budget”), (aiv) as required by (A) Applicable Law or Governmental Entities or (B) Company Contracts in effect as of the date hereof and have been made available to Parent (other than such Company Contracts that the Company is restricted by confidentiality obligations from disclosing), or entered into in compliance with Section 7.1 or (v) for actions in connection with the F-Reorganization, the Upstairs Restructuring or the DIK Transaction, New Company and the Company shall, and shall cause its each of the Company Subsidiaries to, (x) conduct its business in the ordinary course of business in all material respects and (y) use commercially reasonable efforts to maintain and preserve substantially intact its business and organization and material assets and properties in good working order and condition (ordinary wear and tear excepted) and preserve in all material respects its material relationships with any employees, customers, suppliers, vendors, licensors and licensees with which it has material business relations; provided, however, that no action by New Company, the Company or the Company Subsidiaries with respect to matters specifically addressed by any provision of Section 7.1(a) through Section 7.1(z) shall be deemed a breach of clauses (x) or (y) unless such action would constitute a breach of such specific provision. In addition to and without limiting the generality of the foregoing, except (A) as listed in Section 7.1 of the Company Disclosure Letter, (B) as otherwise permitted by or provided for in this Agreement, (C) for payment by New Company, the Company or any Company Subsidiary of the amount with respect to a particular line item (plus ten percent (10%) of the amount set forth with respect to any particular line item listed therein) set forth in the 2025 Budget or in the 2026 Budget, (D) as (1) required by Applicable Law or Governmental Entities or (2) Company Contracts in effect as of the date hereof and have been made available to Parent (other than such Company Contracts that the Company is restricted by confidentiality obligations from disclosing), or entered into in compliance with Section 7.1, (E) for actions required to consummate the F-Reorganization, the Upstairs Restructuring or the DIK Transaction (if applicable) or (F) all transactions and
(i) subject to Section 7.1(e), merge or consolidate with any other Person, except that a Company Subsidiary may merge or consolidate with another Company Subsidiary as long as such merger or consolidation does not result in any material increase in Tax liabilities for the Company or for any Company Subsidiary (whether with respect to periods before the Closing or periods after the Closing), or (ii) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation or other reorganization, other than, with respect to the foregoing clause (ii), any mergers, consolidations or other reorganizations solely among the Company and its wholly-owned Subsidiaries or solely among its wholly-owned Subsidiaries; (d) sell, lease, license or subject to an Encumbrance (other than a Permitted Encumbrance) or otherwise surrender, relinquish or dispose of any assets or property of New Company, the Company or any Company Subsidiary, other than (i) inventory in the ordinary course of business, (ii) in an amount not in excess of Fifty Million Dollars ($50,000,000) in the aggregate, (iii) in connection with any Commodity Contract not in excess of the limits set forth for the Chief Executive Officer in the Company’s Risk Management Policy, in each case for this clause (iii), that are executed in accordance with the Risk Management Policy of the Company, (iv) disposals of any assets or property between or among (A) New Company, the Company and any of the wholly-owned Company Subsidiaries and (B) any wholly-owned Company Subsidiary and another wholly-owned Company Subsidiary, (v) in connection with the 2016 Receivables Purchase Agreement (as such term is defined in the Company Disclosure Letter), or (vi) Air Emission Allowances and Environmental Products as necessary to comply with Applicable Law (including Environmental Law); (e) subject to Section 8.2(e), make any acquisition (including by merger) of (i) the Equity Interests or a material portion of the assets of any other Person or (ii) any other properties 61 or assets of any other Person (other than New Company, the Company or any of the wholly-owned Company Subsidiaries) for consideration in excess of Fifty Million Dollars ($50,000,000) in the aggregate, in each case of clause (i) or (ii), except for (A) acquisitions of supplies, parts, fuel, materials, other inventory, Environmental Products and capacity in the ordinary course of business, (B) capital expenditures made in accordance with Section 7.1(q) or (C) pursuant to Contracts in force on the date of this Agreement; (f) (i) issue, sell, grant, pledge, transfer, dispose of, or otherwise encumber (or make payments based on the value of), or authorize the issuance, sale grant, pledge, transfer, disposal of, or Encumbrance on (or making of payments based on the value of), any shares of its capital stock or other Equity Interests (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or other security), other than (A) issuances of Common Shares or Company Common Shares in respect of Restricted Stock Units outstanding on the date hereof in accordance with their terms as in effect on the date hereof or (B) the creation of (x) transfer restrictions of general applicability on any securities of New Company or the Company imposed by Applicable Law or (y) Encumbrances securing indebtedness for borrowed money pursuant to the outstanding Debt Instruments of the Company and the Company Subsidiaries as in effect on the date hereof or as any Debt Instrument may be amended, modified or replaced or entered into in accordance with this Section 7.1, (ii) split, combine, subdivide or reclassify any shares of capital stock or any other Equity Interests of New Company, the Company or any Company Subsidiary or (iii) purchase, repurchase or redeem or otherwise acquire any shares of capital stock or any other Equity Interests of New Company, the Company or any Company Subsidiary or any rights, warrants or options to acquire any such shares or interests, other than in connection with the vesting of Restricted Stock Units pursuant to their terms as in effect on the date hereof (including in connection with any required withholding Taxes related to such vesting); (g) (i) incur, guarantee or assume, or otherwise become liable for, or modify in any material respect the terms of, any Specified Debt Instruments, (ii) issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities of New Company, the Company or any of the Company Subsidiaries, (iii) assume, guarantee, endorse or otherwise become liable for any indebtedness of any Person that is not the Company, the New Company or any Company Subsidiary, (iv) make any loans, advances or capital contributions to, or investments in, any Person that is not the Company, the New Company or any Company Subsidiary, (v) issue letters of credit or guaranties in exchange for the release of cash or cash equivalent collateral that was previously posted to satisfy any credit support obligations under any Specified Debt Instrument of the Company, New Company or any Company Subsidiary in an amount in excess of Seventy Five Million Dollars ($75,000,000) in the aggregate or (vi) enter into any arrangement having the economic effect of any of the foregoing, in each case, other than (A) new indebtedness for borrowed money in an amount not in excess of Two Hundred Million Dollars ($200,000,000) in the aggregate; provided that, with respect to this clause (A), New Company, the Company and each Company Subsidiary, as applicable, shall use commercially reasonable efforts to the extent practicable under the circumstances to (1) consult with the Parent with respect to the amounts of such indebtedness and the expected timing of the incurrence, guarantee or assumption thereof, (2) promptly provide Parent with drafts of all material definitive documentation in respect of such indebtedness with reasonable time for Parent and its advisors to review and comment on such definitive documentation, to the extent the terms of such indebtedness are materially less favorable to the Company than the terms of the current indebtedness and (3) keep Parent reasonably informed 62 of the status of its efforts with respect to the incurrence, guarantee or assumption of such indebtedness, (the requirements in clauses (1)-(3), the “Permitted Indebtedness Requirements”) (B) any intercompany indebtedness, loan, advance, capital contribution or investment among New Company, the Company and/or any wholly-owned Company Subsidiary, (C) guaranties, letters of credit, surety bond obligations or other credit support obligations or borrowings by (x) New Company or the Company of obligations of any wholly-owned Company Subsidiary or (y) any Company Subsidiary of obligations of New Company, the Company or a wholly-owned Company Subsidiary, in each case of this clause (C), (I) in the ordinary course of business, (II) pursuant to the Debt Instruments in effect on the date hereof or as any Debt Instrument may be amended, modified or replaced or entered into in accordance with this Section 7.1 or (III) in connection with the sale or purchase of Derivative Products within the CEO Limits of Authority under, and executed pursuant to and in accordance with the Risk Management Policy, (D) refinancings, replacements, renewals, substitutions or modifications of or similar amendments to existing indebtedness in the ordinary course of business, in each case of this clause (D), that (x) do not increase the aggregate principal amount of any such existing indebtedness, (y) are in respect of indebtedness that is within three (3) months of its final stated maturity date and (z) are in compliance with the Permitted Indebtedness Requirements, or (E) in respect of existing Debt Instruments as of the date hereof, including any borrowings under the Revolving Credit Agreement (as defined in the Company Disclosure Letter) or as any Debt Instrument may be amended, modified or replaced or entered into in accordance with this Section 7.1(g); (h) repay, redeem, repurchase, prepay, defease, cancel, any obligations for borrowed money or otherwise evidenced by bonds, debentures, notes, or other similar instruments other than (i) as required pursuant to the terms thereof, (ii) existing indebtedness at or within three (3) months of maturity, or (iii) in the ordinary course of business; (i) other than any existing union, works council, labor organization, or other employee representative, recognize or certify any union, works council, labor organization, or other employee representative for any current or former employees of the services Company or any Company Subsidiary; (j) implement or announce any employee furloughs, reductions in force, plant closings, material reductions in compensation or other similar actions that, in each case, would implicate the Worker Adjustment and Retraining Notification Act of its employees and its advantageous business relationships1988, as amended, and any similar Applicable Laws; (bk) except waive or release any (i) noncompetition or nonsolicitation covenant or obligation of any current or former employee or individual independent contractor of the Company or any Company Subsidiary or (ii) material nondisclosure or other restrictive covenant obligation of any current or former employee or individual independent contractor of the Company or any Company Subsidiary with a title of Vice President or above; (l) other than as expressly required by the terms of any Company Benefit Plan in existence on the date of this Agreement and set forth on Section 5.15 of the Company Disclosure Letter (including but excluding, for the avoidance of doubt, any commitment or obligation to establish, maintain or otherwise grant awards under a long-term incentive plan not in effect as of the date hereof, pursuant to any promotion letter or otherwise), by an applicable Labor Agreement, as contemplated by 63 Section 4.4 or as set forth in Section 7.1(l) of the Company Disclosure Schedule Letter, (i) increase the compensation or benefits of any member of the New Company or the Purchaser Disclosure ScheduleCompany Board of Directors (“Director”) or executive officer of New Company or the Company or any Company Subsidiary (except for annual cash incentive grants and merit salary increases consistent with past practice), required by law (ii) provide increases in salaries, wages, other compensation or as consented benefits (or communicate increases in bonuses to the extent bonuses are based on salary or wage level) of (A) employees who are not executive officers or Directors of New Company, the Company or any Company Subsidiary or (B) individual independent contractors of New Company, the Company or any Company Subsidiary, in writing by each case, other than in the ordinary course of business, (iii) enter into any long-term incentive, equity or equity-based award, change-in-control, retention, employment (other partythan unwritten at- will employment arrangements in connection with new hires otherwise permitted pursuant to this Section 7.1(l)), each severance, termination or other similar Contract with, or grant any long-term incentive, equity or equity-based award, change-in-control, retention, severance, termination or similar compensation or benefits to, any officer, Director, employee or individual independent contractor of New Company, the Company or any Company Subsidiary, (iv) establish, adopt, terminate or materially amend any Company Benefit Plan or any plan, program, arrangement, practice or Contract that would be a Company Benefit Plan if it were in existence on the date hereof, except to the extent that such amendment would not materially increase the cost to the Company under such arrangement or plan, (v) accelerate the time of payment or vesting of any compensation or benefits for any current or former employee, officer, Director or individual independent contractor of New Company, the Company or any of the Company and Purchaser shall notSubsidiaries, (vi) hire or promote any employee or engage any other individual service provider of New Company, the Company or any of the Company Subsidiaries with a title of director or above, and shall cause their respective (vii) terminate any current employee, officer, Director or individual independent contractor of New Company, the Company or any of the Company Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(bfor cause (as reasonably determined by New Company, the Company, or any Company Subsidiary, as applicable, in its reasonable discretion) and 5.2(f)with a title of director or above; provided, to which this sentence however, that the foregoing clauses (i) through (vii) shall not apply)restrict New Company, a party and its Subsidiaries may take the Company or any commercially reasonable actions that such party reasonably determines are necessary Company Subsidiary from entering into or prudent for it making available to take newly hired employees or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party service providers (to the extent such actions would otherwise require consent of the other party hiring thereof was permitted under this Section 5.1 7.1(l)) or Section 5.2.to employees or service providers in the context of promotions based on job performance or
Appears in 1 contract
Sources: Merger Agreement (Constellation Energy Generation LLC)
Covenants Relating to Conduct of Business. 5. 1Conduct of Business Prior SECTION 7.1 CONDUCT OF BUSINESS BY ▇▇▇▇▇▇
(a) Except as otherwise expressly contemplated by this Agreement, or as consented to the Effective Time. During by PRI in writing (such consent not to be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time or earlier termination of this AgreementTime, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company ▇▇▇▇▇▇ shall, and shall cause its Subsidiaries to, conduct its business carry on their respective businesses in the ordinary course consistent with past practice and in compliance in all material respects and with all applicable Laws and, to the extent consistent therewith, use commercially all reasonable efforts to maintain and preserve intact its their current business organizationorganizations, use reasonable efforts to keep available the services of its their current officers and other key employees and its advantageous preserve their relationships with those persons having business relationshipsdealings with them to the end that their goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing (but subject to the above exceptions), and (b) except as expressly required by during the period from the date of this Agreement (including as set forth in to the Company Disclosure Schedule or the Purchaser Disclosure Schedule)Effective Time, required by law or as consented to in writing by the other party, each of the Company and Purchaser ▇▇▇▇▇▇ shall not, and shall cause not permit any of its Subsidiaries to:
(i) other than dividends and distributions by a direct or indirect wholly owned Subsidiary of ▇▇▇▇▇▇ to its parent, or by a Subsidiary that is partially owned by ▇▇▇▇▇▇ or any of its Subsidiaries, provided that ▇▇▇▇▇▇ or any such Subsidiary receives or is to receive its proportionate share thereof, (A) declare, set aside or pay any dividends on, make any other distributions in respect of, or enter into any agreement with respect to the voting of, any of its capital stock, (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except for issuances of ▇▇▇▇▇▇ Common Stock upon the exercise of ▇▇▇▇▇▇ Options or ▇▇▇▇▇▇ Warrants which are either outstanding as of the date hereof in accordance with their respective present terms, including cashless exercise, or are permitted to be issued pursuant to Section 7.1(a)(ii) hereof, or (C) purchase, redeem or otherwise acquire any shares of capital stock of ▇▇▇▇▇▇ or any of its Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such securities (except the deemed acceptance of shares of ▇▇▇▇▇▇ Common Stock upon cashless exercise of ▇▇▇▇▇▇ Options or ▇▇▇▇▇▇ Warrants, or in connection with withholding obligations relating thereto and except from former employees, directors and consultants in accordance with agreements existing on the date hereof and providing for the repurchase of shares in connection with any termination of service of such party);
(ii) issue, deliver, sell or subject to any Encumbrance any shares of the capital stock of ▇▇▇▇▇▇ or any of its Subsidiaries, any other voting securities or any securities convertible into or exchangeable or exercisable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, in any transaction which would materially delay or impair the ability of ▇▇▇▇▇▇ to perform its obligations under this Agreement, and in any such case not for less than the then current market price of such securities, provided that the foregoing shall not prohibit (A) the issuance of ▇▇▇▇▇▇ Common Stock or warrants to purchase ▇▇▇▇▇▇ Common Stock in connection with any acquisition permitted by Section 7.1(a)(iv) or the issuance (or deemed issuance, by way of assumption or otherwise) of options or warrants to purchase ▇▇▇▇▇▇ Common Stock in exchange for outstanding securities, rights, warrants or options to acquire any securities of another Person in connection with any such acquisition, (B) the issuance of ▇▇▇▇▇▇ Common Stock upon the exercise of ▇▇▇▇▇▇ Options or ▇▇▇▇▇▇ Warrants outstanding as of the date hereof in accordance with their present terms, (C) the issuance of ▇▇▇▇▇▇ Options (and shares of ▇▇▇▇▇▇ Common Stock upon the exercise thereof) granted after the date hereof either in the ordinary course of business or in connection with and promptly 38 following an acquisition permitted by Section 7.1(a)(iv), or (D) the issuance of ▇▇▇▇▇▇ Rights (and shares of ▇▇▇▇▇▇ Preferred Stock upon the exercise thereof) in accordance with the terms of the ▇▇▇▇▇▇ Rights Plan, as in effect on the date hereof so long as nothing permitted by the foregoing (A) through (D) shall materially delay or impair the ability of ▇▇▇▇▇▇ to perform its obligations under this Agreement.
(iii) amend any of its Organizational Documents other than as contemplated by this Agreement;
(iv) acquire or agree to acquire (by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner), any business or any Person in a manner which would materially delay or impair the ability of ▇▇▇▇▇▇ to perform its obligations under this Agreement or that would either involve aggregate consideration in excess of $200 million or require the approval of ▇▇▇▇▇▇ stockholders under the Organizational Documents of ▇▇▇▇▇▇ or the rules and regulations of the Nasdaq Stock Market, Inc. applicable to ▇▇▇▇▇▇. (For purposes hereof, "aggregate consideration" shall equal the sum of (A)(1) the amount of cash to be paid, (2) the value of any shares of ▇▇▇▇▇▇ Common Stock (valued at the closing price of the ▇▇▇▇▇▇ Common Stock on Nasdaq on the day prior to announcement of such acquisition) to be delivered, and (3) the fair market value of any non-cash or non-▇▇▇▇▇▇ Common Stock consideration (including the issuance (or deemed issuance, by way of assumption or otherwise) of options or warrants to purchase ▇▇▇▇▇▇ Common Stock in exchange for outstanding securities, rights, warrants or options to acquire any securities of another Person in connection with any such acquisition, and in any case as determined by the ▇▇▇▇▇▇ Board of Directors in good faith as of the day prior to announcement of such acquisition) to be delivered to the seller or its security holders in connection with such acquisition, and (B) the amount of liabilities directly or indirectly assumed by ▇▇▇▇▇▇ or its Subsidiaries or retired or defeased in connection with such acquisition, including contingent liabilities to the extent they can be estimated by the ▇▇▇▇▇▇ Board of Directors in good faith as of the day prior to the announcement of such acquisition);
(v) authorize, or commit or agree to take, any of the foregoing actions, provided that the limitations set forth in this Section shall not apply to any transaction between ▇▇▇▇▇▇ and any wholly owned Subsidiary or between any wholly owned Subsidiaries of ▇▇▇▇▇▇.
(b) Except as required by Law, ▇▇▇▇▇▇ shall not, and shall not permit any of its Subsidiaries to, knowingly voluntarily take any action that would would, or that could reasonably be expected to, result in (i) any of its representations and warranties set forth in this Agreement that are qualified as to materiality becoming untrue or inaccurate at the Effective Time, (ii) any of such representations and warranties that are not so qualified becoming untrue or inaccurate in any material respect at the Effective Time, or (iii) any of the conditions to the consummation of this Agreement and the transaction contemplated hereby as set forth in Article IX not being satisfied.
(c) ▇▇▇▇▇▇ shall promptly advise PRI orally and in writing to the extent it has Knowledge of (i) any representation or warranty made by it contained in this Agreement that is qualified as to materiality becoming untrue or inaccurate in any respect or any such representation or warranty that is not so qualified becoming untrue or inaccurate in any material respect, (ii) the failure by it or any of its Subsidiaries to comply in any material respect with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement and (iii) any Material Adverse Effect or any change or event having, or which, insofar as can reasonably be foreseen, could reasonably be expected to adversely affect have a Material Adverse Effect on the truth of their respective representations and warranties or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary conditions set forth in Section 5.1 Article IX to be satisfied; provided, however, that no such notification shall affect the representations, warranties, covenants or Section 5.2 agreements of the parties (other than Sections 5.2(bor remedies with respect thereto) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response the conditions to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent obligations of the other party parties under this Section 5.1 or Section 5.2Agreement.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as set forth in Section 5.2 of Business Prior the Seller Disclosure Schedules or as required by applicable Law or as otherwise expressly contemplated by the terms of this Agreement (including Section 5.14, Exhibit B and Section 5.19), or to the Effective Time. During extent related to the period Excluded Assets, the Retained Liabilities or the Retained Businesses, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, and except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to Purchaser may otherwise consent in writing by Purchaser (or, in the case of clause (b), the Company) to (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company Seller shall, and shall cause each other Seller Entity and each Purchased Entity (and Subsidiary thereof) to, use commercially reasonable efforts to, and shall vote its Subsidiaries interest in any Purchased Ventures (to the extent any relevant matter is voted upon by the holders of interests in the applicable Purchased Venture and the organizational documents of the applicable Purchased Venture grant Seller or such other Seller Entity or Purchased Entity or Subsidiary thereof the right to vote on such matter) and take such other action to the extent within its control so as to cause such Purchased Venture to use commercially reasonable efforts to, conduct its business the Business in all material respects in the ordinary course in all material respects and use commercially reasonable efforts to maintain of business and preserve intact its current business organization; provided, the services however, that no action by Seller or its Subsidiaries with respect to matters specifically addressed by any other provision of its employees and its advantageous business relationships, and this Section 5.2 shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of such other provision.
(b) except Except as expressly set forth in Section 5.2 of the Seller Disclosure Schedules or as required by applicable Law or as otherwise expressly contemplated by the terms of this Agreement (including as set forth in Section 5.14, Exhibit B and Section 5.19), or to the Company Disclosure Schedule extent related to the Excluded Assets or the Purchaser Disclosure Schedule)Retained Liabilities, required by law or as consented from the date of this Agreement to in writing by the other partyClosing, each of the Company and Purchaser Seller shall not, and shall cause their respective Subsidiaries each Seller Entity and each Purchased Entity (and Subsidiary thereof) not to, knowingly and shall vote its interests in any Purchased Venture (to the extent any relevant matter is voted upon by the holders of interests in the applicable Purchased Venture and the organizational documents of the applicable Purchased Venture grant Seller or any Seller Entity or Purchased Entity or Subsidiary thereof the right to vote on such matter) and take such other action to the extent within its control so as to cause such Purchased Venture not to, in each case solely with respect to the Business, do any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) except as (x) may be required under applicable Law as in effect from time to time or any Seller Benefit Plan as in existence on the date of this Agreement, (y) solely in the case of clauses (A) and (B), in connection with the Completion Bonuses or the Seller equity compensation awards outstanding as of the date of this Agreement held by any Business Employee or Former Business Employee, or (z) solely in the case of clause (B), in connection with any action taken with respect to a Seller Benefit Plan that applies uniformly to participating Business Employees and other similarly situated employees of Seller or its Affiliates, (A) grant to any Business Employee any increase in compensation or benefits (other than, if desired, increases in base salary in the ordinary course of business consistent with past practice with respect to any Business Employee that does not exceed 3% of annual base salary in the aggregate or 5% of annual base salary for any individual, and any corresponding increase in incentive compensation as a result of the increase in annual base salary), (B) adopt, enter into, terminate or materially amend or materially increase the benefits or accelerate the vesting or payment of benefits under, or change any actuarial or other assumption used to calculate funding obligations with respect to, any Purchased Entity Benefit Plan or, in respect of Business Employees or Former Business Employees, any Seller Benefit Plan, (C) make any loans or cash advances to any Business Employee or Former Business Employee (other than advances in connection with business travel and reimbursable expenses in the ordinary course of business consistent with past practice), (D) hire any Business Employee who has an annual base salary exceeding $275,000 or promote, terminate or otherwise change the employment status or title of any member of Senior Management of the Business, (E) enter into, modify or terminate any Collective Bargaining Agreement, other than entering into and renewals of Collective Bargaining Agreements on terms consistent with industry practice in the ordinary course of business, (F) transfer or change the title, position or duties of any employee who primarily provides services to the Business on the date hereof such that such employee ceases to be a Business Employee, (G) transfer or change the title, position or duties of any employee who does not primarily provide services to the Business on the date hereof such that such employee becomes a Business Employee (H) grant any retention, change in control, severance or termination pay to any Business Employee or Former Business Employee that would be a liability of Purchaser or its Affiliates, or result in payment of an amount by Purchaser or its Affiliates to Seller or any of its Affiliates, any Business Employee or Former Business Employee or to a Governmental Entity, following the Closing or (I) amend any restrictive covenant agreement with a Business Employee or Former Business Employee;
(ii) authorize or effect any amendment to, or change, the organizational documents of any Purchased Entity (or Subsidiary thereof), or consent to any amendment or change to the organizational documents of any Purchased Venture;
(iii) issue, sell, pledge, transfer, redeem or repurchase, or authorize or propose to issue, sell, pledge, transfer, redeem, repurchase or authorize any equity interests of any of the Purchased Entities (or any of their Subsidiaries) or consent to the issuance, sale, pledge, transfer, redemption, repurchase or authorization of any Purchased Venture Interests, or securities convertible into, or exchangeable or exercisable for, or options with respect to, or warrants to purchase, or rights to subscribe for, equity interests of any of the Purchased Entities (or any of their Subsidiaries) or the Purchased Ventures (or any of their Subsidiaries), as applicable, in each case other than (A) to Seller, a Seller Entity or a Purchased Entity (or any of their respective Subsidiaries) or (B) the granting of Permitted Liens;
(iv) permit any Purchased Entity (or Subsidiary thereof, but excluding any Close-Out Joint Venture) to incur, create or assume, or consent to any Purchased Venture (or any Subsidiary thereof, but excluding any Close-Out Joint Venture) incurring, creating or assuming, (A) any indebtedness for borrowed money (including debt evidenced by loans, notes, bonds, debentures or other similar instruments) in excess of $10,000,000 in the aggregate, other than in the ordinary course of business or that will be settled at or prior to Closing, or (B) any Lien, other than Permitted Liens, with respect to any material asset of the Business other than (A) in the ordinary course of business or (B) those that will be discharged or released at or prior to the Closing;
(v) permit any Close-Out Joint Venture (or Subsidiary thereof) to incur, create or assume any indebtedness for borrowed money (including debt evidenced by loans, notes, bonds, debentures or other similar instruments);
(vi) acquire any assets (but not for the avoidance of doubt, any Person or business), make any investment in any Person or business or dispose of, lease, license or transfer any assets of the Business, in each case, other than (A) any such acquisitions, investments or dispositions where the consideration paid or transferred in connection with such transactions would not exceed $20,000,000 in the aggregate and (B) acquisitions, dispositions, investments, leases, licenses or transfers from, to or in Seller, a Seller Entity or a Purchased Company (or any of their respective Subsidiaries);
(vii) (A) amend any material term of, or waive any material right under, fail to use reasonable efforts to enforce or voluntarily terminate (other than upon expiration in accordance with its terms), any Material Contract or Business Permit, or (B) enter into any Contract that, if in effect on the date hereof, would be a Material Contract (or make any Government Bid which, if accepted, would result in a Material Contract), other than, in each case of clauses (A) and (B), in the ordinary course of business (and other than any Material Contracts entered into after the date hereof in connection with transactions expressly permitted by another clause of this Section 5.2(b));
(viii) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law;
(ix) make any capital expenditures or commitments for capital expenditures in excess of $5,000,000 in the aggregate;
(x) settle or compromise any material Proceeding (other than any Proceeding in respect of Taxes or Tax matters) other than in the ordinary course of business to the extent such settlement or compromise imposes material ongoing restrictions on the operations of the Business;
(xi) terminate the coverage of any Business Insurance Policy (other than upon the expiration or exhaustion of such coverage in accordance with its terms);
(xii) make or change any Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, amend any Tax Returns, enter into any closing agreement with any Taxing Authority in respect of any Tax, settle any Tax claim, audit or assessment, or surrender any right to claim a Tax refund, in each case, except if such action would not reasonably be expected to adversely affect result in a material increase in the Tax liability of a Purchased Company or materially delay any of its Subsidiaries for any Post-Closing Tax Period;
(xiii) make any material change to its policies or practices regarding collection of accounts receivable or payment of accounts payable;
(xiv) sell, assign, transfer, license, dispose of, terminate, cancel or abandon any material right or material license in any Business Intellectual Property, in each case other than the ability grant of non-exclusive licenses in the ordinary course of business; or
(xv) authorize any of, or commit or agree to obtain take, whether in writing or otherwise, or do any necessary approvals of any Regulatory Agency of, the foregoing actions.
(c) Other than the right to consent or other Governmental Entity required for withhold consent subject to the transactions contemplated hereby or terms of, and with respect to perform its respective covenants and agreements under the matters set forth in, Section 5.2(b), nothing contained in this Agreement shall be construed to give to Purchaser, directly or indirectly, rights to consummate control or direct the transactions contemplated hereby on a timely basisBusiness’s operations prior to the Closing. Prior to the Closing, Seller (and its Subsidiaries) shall exercise, subject to the terms and conditions of this Agreement, complete control and supervision of the operations of the Business. Notwithstanding anything in this Agreement to the contrary set forth contrary, the Parties acknowledge and agree that nothing in Section 5.1 or this Section 5.2 (other than Sections 5.2(b) and 5.2(f), shall be deemed to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to limit the Pandemic transfer of the Excluded Assets or the Pandemic Measures; providedRetained Liabilities prior to, that such party shall provide prior notice to and consult at or after the Closing or prohibit Seller from implementing the Pre-Closing Restructuring Steps in good faith accordance with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.25.14.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Aecom)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except for matters (x) set forth in Schedule 5.01, (y) expressly agreed to by Purchaser or (z) otherwise contemplated by the terms of Business Prior to the Effective Time. During the period this Agreement, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing Date, except as expressly contemplated or permitted by this Agreement (including as set forth in Seller shall conduct the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause its Subsidiaries to, conduct its business Business in the ordinary course in all material respects and a manner consistent with past practice and, to the extent consistent therewith, use commercially reasonable efforts to maintain preserve the material business relationships of the Business with customers, suppliers, distributors and preserve intact its business organizationothers with whom the Business deals in the ordinary course of business. In addition, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in Schedule 5.01 or otherwise contemplated by the Company Disclosure Schedule terms of this Agreement, Seller shall not do any of the following in connection with the Business without the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) grant to any Business Employee any increase in compensation or benefits outside the ordinary course of business, except as may be required under existing agreements, or grant any new or modified severance or termination agreement or arrangement or increase or accelerate any benefits payable under the severance or termination pay policies in effect on the date of this Agreement;
(ii) create, incur or assume any liabilities, obligations or indebtedness for borrowed money related to the Business or guarantee any such liabilities, obligations or indebtedness, other than in the ordinary course of business consistent with past practice;
(iii) subject any of the Transferred Assets to any Lien of any nature whatsoever other than Permitted Liens;
(iv) waive any claims or rights of value that relate to the Business or to any Transferred Asset or settle any claims or lawsuits if such settlement imposes a continuing non-monetary obligation on the Business or any of the Transferred Assets;
(v) make any change in any method of accounting or accounting practice or policy that is applicable to the Business other than those required or permitted by GAAP or by Applicable Law;
(vi) acquire by merging or consolidating with, or by purchasing 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 or otherwise acquire any assets (other than the Seller Parties Transferred Inventory) that are material to the Business, if a substantial portion of the assets acquired would constitute Transferred Assets;
(vii) sell, lease, license or otherwise dispose of any asset that would constitute a Transferred Asset if owned, leased, licensed, held or used by Seller or the Purchaser Disclosure ScheduleBusiness on the Closing Date, except Seller Parties Transferred Inventory, obsolete or excess equipment, in each case sold or disposed of in the ordinary course of business;
(viii) enter into, renew, modify, supplement, amend or terminate any lease of real property that relates to the Business;
(ix) amend, modify or supplement in any material respect or voluntarily terminate any material Contract relating to the Business, or enter into or propose to enter into any new material Contract relating to the Business, in each case outside the ordinary course of business; or
(x) agree, whether in writing or otherwise, to do any of the foregoing.
(b) Seller shall keep, or cause to be kept, all insurance policies currently maintained with respect to the Transferred Assets (the “Seller Insurance Policies”), required or suitable replacements therefor, in full force and effect through the close of business on the Closing Date; it being understood that any and all Seller Insurance Policies are owned and maintained by law or Seller and its affiliates (and not the Business). Except as consented to set forth in Section 1.02(a)(x), Purchaser will not have any rights under the Seller Insurance Policies from and after the Closing Date.
(c) In connection with the continuing operation of the Business from the date of this Agreement until the Closing Date, Seller shall advise Purchaser in writing by the other party, each promptly upon becoming aware of the Company and Purchaser shall notoccurrence of any matters or events where the anticipated effect, and shall cause their respective Subsidiaries not toindividually or in the aggregate, knowingly take any action that would may reasonably be expected to adversely affect or materially delay cause a failure of the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary closing condition set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f7.02(a), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2.
Appears in 1 contract
Covenants Relating to Conduct of Business. 54.1. 1Conduct Conduct of Business Prior of Company Pending the Merger. Company covenants and agrees that, during the period from the date hereof to the Effective Time and except as otherwise agreed to in writing by Purchaser or as expressly contemplated by this Agreement, the businesses of Company and its Subsidiaries shall be conducted only in, and Company and its Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance with applicable laws; and Company and its Subsidiaries, except as expressly contemplated by this Agreement, shall each use its commercially reasonable efforts to preserve substantially intact the business organization of Company and its Subsidiaries, to keep available the services of the present officers and employees and to preserve the present relationships of Company and its Subsidiaries with such of the customers, suppliers, licensors, licensees, or distributors with which Company or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, without the prior written consent of Purchaser (which shall not be unreasonably withheld or delayed), neither Company nor any of its Subsidiaries shall, between the date of this Agreement and the Effective Time. During , except as set forth in Section 4.1 of the period Company Disclosure Schedule, directly or indirectly do, or propose or commit to do, any of the following:
(a) Amend its articles of incorporation or bylaws or equivalent organizational documents;
(b) Issue, deliver, sell, pledge, dispose of or encumber, or authorize or commit to the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including but not limited to stock appreciation rights or phantom stock), of Company or any of its Subsidiaries, except for (i) the issuance of securities issuable pursuant to options or other rights outstanding as of the date hereof under any Benefit Plan of Company (including the Company Employee Stock Purchase Plan (“Company ESPP”)), (ii) grants of equity or equity-based awards, and the issuance of securities in settlement thereof, in each case in accordance with Section 4.1(b) of the Company Disclosure Schedule or (iii) as permitted by Section 4.1(q) hereof;
(c) Declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, other than dividends payable by a directly or indirectly wholly owned Subsidiary of Company to Company or to another directly or indirectly wholly owned Subsidiary of Company;
(d) Acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division or line of business, except for cash acquisitions not to exceed $100 million per individual acquisition or $150 million in the aggregate;
(e) Modify its current investment policies or investment practices in any material respect except to accommodate changes in applicable law;
(f) Transfer, sell, lease, mortgage, or otherwise dispose of or subject to any Lien any of its assets, including capital stock of its Subsidiaries, with a fair market value in excess of $30 million individually or $50 million in the aggregate (except (i) by incurring Permitted Liens (as defined in Section 8.13(k); (ii) in the ordinary course of business consistent with past practice; and (iii) equipment and property no longer used in the operation of Company’s or any of its Subsidiaries’ business);
(g) Except as may be required as a result of a change in law or in generally accepted accounting or actuarial principles, make any material change to the accounting practices or principles or reserving or underwriting practices or principles used by it;
(h) Settle or compromise any pending or threatened suit, action or claim involving a payment by Company or its Subsidiaries in excess of $5,000,000;
(i) Adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Company or any of its Subsidiaries;
(j) Fail to use reasonable commercial efforts to maintain in full force and effect the existing insurance policies covering Company or its Subsidiaries or their respective properties, assets and businesses or comparable replacement policies;
(k) Authorize or make capital expenditures other than aggregate capital expenditures during the fiscal years 2003 and 2004 not to exceed the amounts set forth in Section 4.1(k) of the Company Disclosure Schedule, in each case plus $10 million;
(l) Make any material Tax election or settle or compromise any material federal, state, local or foreign Tax liability, change any method of Tax accounting in any material respect, enter into any closing agreement relating to any material amount of Tax, or surrender any right to claim a material Tax refund;
(m) Knowingly take, or knowingly permit any of its Subsidiaries to take, any action that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(n) Reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, stock options or debt securities (except pursuant to any stock-for-stock exercise of any employee or director stock options issued pursuant to the Company Benefit Plans);
(i) Repay or retire any indebtedness for borrowed money or repurchase or redeem any debt securities, except upon the maturity date of such indebtedness or as otherwise required by the terms of such indebtedness or securities or as required by Section 5.15 hereof; (ii) incur any indebtedness for borrowed money or issue any debt securities except for indebtedness of borrowed money under Company’s existing commercial paper program or credit facilities (the “Company Short-Term Borrowings”) provided that the Company Short-Term Borrowings may not exceed $600 million in the aggregate at any time; or (iii) assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans, advances or capital contributions to, or investments in, any other Person in excess of $5 million individually or $10 million in the aggregate (it being understood that (i) any commercial paper issued by Company or any of its Subsidiaries shall be considered indebtedness for purposes of this provision and (ii) trade payables, ordinary course business funding mechanisms between Company and its customers and providers and guarantees of indebtedness by Company and its Subsidiaries to Company and its Subsidiaries shall not be considered indebtedness for purposes of this provision);
(p) Except as may be permitted pursuant to any other subsection of this Section 4.1, enter into or amend in a manner materially adverse to Company, any of its Subsidiaries or the Surviving Corporation (i) any contract or other agreement not made in the ordinary course of business which is material to Company or any of its Subsidiaries; (ii) any contract or other agreement upon which Company’s business is substantially dependent; (iii) any contract or other agreement expressly restricting the payment of dividends or the repurchase of stock or other equity; (iv) except as may be required by law or regulation, collective bargaining agreements that are not renewals or replacements of existing collective bargaining agreements; (v) material joint venture, partnership agreements or other similar agreements; (vi) leases for real property involving annual expense in excess of $2,500,000 that are not renewals or replacements of existing leases; (vii) any non-competition agreement or any other agreement or arrangement that by its express terms (A) materially limits or otherwise materially restricts Company or any of its Subsidiaries or any successor thereto or (B) would, after the Effective Time, materially limit or otherwise materially restrict Company, any of its Subsidiaries or the Surviving Corporation, from engaging or competing in any line of business material to Company and its affiliates (taken as a whole) or Purchaser and its affiliates (taken as a whole) or in any geographic area material to Company and its Subsidiaries (taken as a whole) (other than exclusivity provisions or arrangements with providers of health care services) or (viii) except for any agreement in the ordinary course of business and that is not inconsistent with Section 5.15, any contract or agreement with an affiliate of Company;
(i) except (X) as set forth in Section 4.1(q)(ii) below or in Section 4.1(q) of the Company Disclosure Schedule, (Y) as required by this Agreement or by applicable law, or (Z) as otherwise required by any Company Benefit Plan as in effect on the date hereof or collective bargaining agreement to which such party is subject:
(1) enter into, adopt, amend, renew, terminate or take any other action in respect of any Benefit Plan, or any other employee benefit plan or policy, that would materially increase the level of benefits under, the number of participants in or the annual cost to Company and its Subsidiaries, in the aggregate, of such plan and all similar plans maintained by them (e.g., for illustrative purposes, group health plans or retirement plans);
(2) enter into, adopt, amend or terminate any individual agreement or arrangement with one or more directors, officers or employees holding a position of a regional or staff vice president of Company (or any equivalent position in a Subsidiary) (any such position, a “Regional or Staff Vice President”) or a more senior position (except as is consistent with paragraph (3) below);
(3) increase in any manner the compensation of any officer, director or employee, except for:
(a) individual salary adjustments (within salary bands (as such may be adjusted to reflect competitive information) for such position) made in the ordinary course of business consistent with past practice, including annual merit increases, promotional increases and equitable adjustments, provided that, for employees holding a position of Regional or Staff Vice President of Company (or an equivalent position in a Subsidiary) or a more senior position, such salary adjustments (on an annualized basis) do not exceed 8 percent of the aggregate salary amounts currently payable to such employees and for employees in a more junior position, such salary adjustments (on an annualized basis) do not exceed 6 percent of the aggregate salary amounts currently payable to such employees;
(b) the establishment of individual annual target bonus awards (within the established range (as such may be adjusted to reflect competitive information) for such position) for participants in such party’s incentive compensation plans in the ordinary course of business consistent with past practice;
(c) the payment of a cash retention bonus to any employee other than an employee holding a position of Regional or Staff Vice President or more senior position, payable out of a retention bonus pool the amount of which pool will not be in excess of the aggregate amount set forth in Section 4.1(q) of the Company Disclosure Schedule;
(4) take any action not expressly required by the terms of the Benefit Plans as in effect on the date of this Agreement to accelerate the Effective Time vesting, exercisability or earlier termination payment of this Agreementany stock options, except as expressly contemplated restricted stock or permitted by this Agreement other equity-based or cash incentive awards or otherwise alter in any material respect the terms of any such award; or
(including as set forth in the Company Disclosure Schedule), required by law 5) enter into a contract or as consented agreement to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause its Subsidiaries to, conduct its business in the ordinary course in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organization, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each do any of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. foregoing.
(ii) Notwithstanding anything to the contrary set forth in Section 5.1 4.1(q)(i) above, Company and its Subsidiaries shall be permitted to:
(1) operate in the ordinary course of business consistent with past practice with respect to hiring, promoting, severing and entering into individual employment, severance or Section 5.2 separation letters or agreements in each case with respect to any employee holding a position below that of Executive Vice President (or an equivalent position in a Subsidiary), and
(2) with respect to employees holding a position of a senior vice president of Company (or any equivalent position in a Subsidiary) or a more junior position, enter into individual employment offer letters or agreements with, and/or grant compensation (including equity compensation and participation in the Company’s Change-in-Control Plan provided that Company provide prior written notice to Purchaser of the inclusion of any new participant in the Company’s Change-in-Control Plan) and benefits to, any employee who is hired to replace a terminated employee or fill a vacancy or any employee who is promoted in the ordinary course of business consistent with past practice, which employment offer letters or agreements, compensation and benefits, are commensurate with the position to which the employees are being appointed and the terms of which are consistent with such party’s past practice in the ordinary course of business, except that in the case of (1) or (2), in no event shall any such offer letters, employment agreements, and/or grants of compensation or benefits, or separation or severance contain terms providing for acceleration of vesting, exercisability or payment solely by virtue of the consummation of the transactions contemplated by this Agreement, without regard to any change in status, duties, responsibilities, reporting obligations or benefits of such person (“Single-Trigger Accelerated Vesting”);
(3) establish, pay and provide compensation and other benefits (other than Sections 5.2(bequity grants; provided that equity grants may be made in accordance with paragraph (4) below) to its officers, directors and 5.2(f)employees in the ordinary course of business consistent with past practice; and
(4) grant stock options and deferred share rights in the ordinary course of business, using the standard form of award agreements (including, without limitation, for the Company stock options vesting in six, semi-annual, equal installments and deferred share rights vesting in three, equal annual installments; provided, however, that no such grant shall contain terms providing for Single-Trigger Accelerated Vesting; provided, further, that in no event shall the aggregate number of shares of Company Common Stock to which be granted under this sentence shall not apply)subsection after the date hereof to all officers, a party directors and employees of Company and its Subsidiaries may subject to such grants exceed 6,000,000.
(r) Take, or offer or propose to take, or agree to take in writing or otherwise, any of the actions described in Sections 4.1(a) through 4.1(q) or any action which would result in any of the conditions set forth in Article VI not being satisfied or materially delay the Closing.
4.2. Conduct of Business of Purchaser Pending the Merger. Purchaser covenants and agrees that, during the period from the date hereof to the Effective Time and except as otherwise agreed to in writing by Company or as expressly contemplated by this Agreement, the businesses of Purchaser and its Subsidiaries shall be conducted only in, and Purchaser and its Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance with applicable laws; and Purchaser and its Subsidiaries, except as expressly contemplated by this Agreement, shall each use its commercially reasonable actions that efforts to preserve substantially intact the business organization of Purchaser and its Subsidiaries, to keep available the services of the present officers and employees and to preserve the present relationships of Purchaser and its Subsidiaries with such party reasonably determines are necessary of the customers, suppliers, licensors, licensees, or prudent for it to take distributors with which Purchaser or any of its Subsidiaries has significant business relations. By way of amplification and not take in response to limitation, without the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require written consent of Company (which shall not be unreasonably withheld or delayed), neither Purchaser nor any of its Subsidiaries shall, between the other party under date of this Agreement and the Effective Time, except as set forth in Section 5.1 4.2 of the Purchaser Disclosure Schedule, directly or Section 5.2.indirectly
Appears in 1 contract
Sources: Merger Agreement (Anthem Inc)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as set forth in Section 5.2 of Business Prior to the Effective Time. During Seller Disclosure Schedules or as required by applicable Law or as otherwise contemplated by the period terms of this Agreement (including Section 5.13), from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing, and except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to Purchaser may otherwise consent in writing by Purchaser (or, in the case of clause (b), the Company) to (such consent not to be unreasonably withheld, conditioned or delayed), Seller shall (a) Company shall, and shall cause its Subsidiaries and Affiliates to, conduct its business in the ordinary course in all material respects and ) use commercially reasonable efforts to maintain (i) conduct the Business in all material respects in the ordinary course and consistent with past practice and (ii) preserve substantially intact the Business; provided, that no action by Seller or its business organization, the services Subsidiaries with respect to matters specifically addressed by any other provision of its employees and its advantageous business relationships, and this Section 5.2 shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of such other provision.
(b) except Except as expressly set forth in Section 5.2 of the Seller Disclosure Schedules or as required by applicable Law or as otherwise contemplated by the terms of this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure ScheduleSection 5.6 and Section 5.13), required by law or as consented and solely with respect to in writing by the other partyBusiness, each of the Company and Purchaser Seller shall not, and shall cause their respective Subsidiaries each Seller Entity and each Purchased Entity not to (and with respect to the Purchased Ventures, shall not consent to or affirmatively authorize to), knowingly take do any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) except as may be required under any Benefit Plan or, provided that Purchaser receives advance written notice thereof from Seller, in connection with any action that applies uniformly to each employee of Seller or any of its Affiliates who is, as of the date of this Agreement, either a Purchased Company Employee, actively and primarily engaged in the Business or primarily dedicated to supporting the Business (each, a “Current Business Employee”) and each other similarly situated employee of Seller and its Affiliates, (A) subject to clause (C) below, grant to any Current Business Employee any increase in compensation or benefits (except for increases in the ordinary course of business consistent with past practice for Current Business Employees who are not members of the Senior Management of the Business), (B) enter into, amend or terminate any employment, change in control, retention or similar agreement with, any Current Business Employee (other than (x) any employment offer letter providing for “at-will” employment and no rights to severance pay or benefits with newly hired employees who are hired in the ordinary course of business consistent with past practice and (y) separation agreements with terminating Current Business Employees entered into in the ordinary course of business consistent with past practice), (C) increase the level of severance pay or benefits in respect of any Current Business Employee from the level described in the policy set forth on Section 5.7(d) of the Seller Disclosure Schedules, (D) adopt, enter into, terminate or amend any Purchased Company Benefit Plan (or any plan, program, policy, agreement or other arrangement that would be a Purchased Company Benefit Plan if it were in existence as of the date hereof), or (E) cause any Seller Benefit Plan to become a Purchased Company Benefit Plan or otherwise transfer any Seller Benefit Plan (including any related assets and Liabilities thereunder) to any Purchased Company;
(ii) with respect to the Business, (A) employ or agree to employ any new persons full-time or part-time at grade level 179 or above, (B) dismiss any Current Business Employee (except for incompetence or gross misconduct) at grade level 179 or above, or (C) transfer the employment or reallocate the duties or responsibilities of any Current Business Employee, such that such person would not be a Business Employee at Closing;
(iii) permit the JCI Retained Business to solicit or hire any Current Business Employee;
(iv) authorize or effect any amendment to or change the organizational documents of any Purchased Entity or consent to or affirmatively authorize any amendment of the organizational documents of any Purchased Venture, or create any new Subsidiary of any Purchased Entity or consent to or affirmatively authorize the creation of any new Subsidiary of a Purchased Venture;
(v) issue or authorize the issuance of any equity interests or grant any options, warrants, or other rights to purchase or obtain any of its equity securities or issue, sell, pledge, encumber or otherwise dispose of any of its equity securities or redeem, or reclassify, split, combine or subdivide, repurchase or otherwise acquire any securities of any Purchased Entity, or consent to or affirmatively authorize any of the foregoing with respect to a Purchased Consolidated Venture;
(vi) (A) incur any Indebtedness (other than (x) trade payables in the ordinary course of business, (y) intercompany debt that will be extinguished as of the Closing or (z) Credit Enhancements in connection with a Purchased Customer Contract entered into in accordance with Section 5.2(b)(xii)), (B) acquire or agree to acquire, by merger, consolidation stock or asset purchase, or otherwise, any business or corporation, partnership, limited liability company, association or other business organization or division thereof or assets, other than (x) purchases of inventory in connection with the operation of the Business and (y) other assets in connection with the obligations of the Seller Entities or Purchased Companies pursuant to a Purchased Customer Contract, Third-Party Account-Level Supplier Contract or Affiliated Account-Level Service Contract, in each case in the ordinary course of business and consistent with past practice, (C) sell, license, pledge, abandon, dispose of or encumber any assets or businesses other than (x) assets not in excess of $500,000 individually or (y) sales of inventory or non-exclusive licenses of Intellectual Property, in each case, in the ordinary course of business consistent with past practice, or (D) enter into any binding Contract with respect to any of the foregoing;
(vii) enter into any Contract in relation to the Business for the purchase of real property by the Business or lease (as lessee) of real property or exercise any option to extend any leases related to the Transferred Leases, except for extensions of any such leases that terminate in accordance with their terms prior to the Closing, so long as such extensions provide for annual rental payments of no more than 110% of the current annual rent with respect to such Transferred Lease and do not extend the term in excess of three (3) years;
(viii) settle any Proceeding other than in the ordinary course of business consistent with past practice involving solely money damages or initiate any Proceeding against any customer, supplier or vendor of the Business;
(ix) recognize any union or other labor organization as the representative of any Business Employees, or enter into any new, or materially amend any existing, collective bargaining or works council agreement with any labor organization, works council or other representative of any of the Business Employees;
(x) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law or are consistent with the Transaction Accounting Principles or otherwise apply generally to Seller;
(xi) declare, authorize, make or pay any dividend or other distribution (payable in stock, property or otherwise) with respect to the equity interests of a Purchased Entity, or consent to or affirmatively authorize the foregoing with respect to the equity interest of a Purchased Venture, in each case except for lawful cash dividends and distributions, and except for any lawful dividends or distributions solely of any Excluded Assets;
(A) except in each case in the ordinary course of business consistent with past practice terminate or materially modify, amend or waive any right under any Material Contract (other than a Purchased Customer Contract), or enter into a new Contract that would have been a Material Contract (other than a Purchased Customer Contract), in each case under clauses (iv) – (vii) of Section 3.11(a) if in effect on the date hereof; (B) except in the ordinary course of business consistent with past practice, terminate or materially modify, amend or waive any right under any Purchased Customer Contract or enter into a new Purchased Customer Contract; or (C) except in the ordinary course of business consistent with past practice, cancel, compromise or settle any material claim, or intentionally waive or release any material right with respect to any Material Contract (other than a Purchased Customer Contract) or the Business;
(xiii) enter into any Contract that (A) limits or purports to limit the ability of any Seller Entity (solely in respect of the Business), any Purchased Entity, any Purchased Venture or Purchaser or any of its Affiliates after the Closing to compete in any business or with any Person or in any geographic area or (B) grants “most favored nation” or similar best available pricing terms;
(xiv) fail to make any capital expenditures necessary to operate the Business in the ordinary course consistent with past practice;
(xv) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or file for bankruptcy;
(xvi) terminate, suspend, amend or modify in any material respect, any Business Permit, except (A) as required by applicable Law or a Governmental Entity or (B) in the ordinary course of business consistent with past practice;
(xvii) make or agree to make any loans, or advances or investments in any Person, or agree to guarantee any loans or advances to, or investments in, any Person, other than extensions of credit to customers in the ordinary course of business consistent with past practices;
(xviii) accelerate, delay or alter in any material respect practices and policies relating to the rate of collection of accounts receivable or payment of accounts payable;
(1) change any method of Tax accounting, annual accounting period or tax year end, (2) change any entity classification for U.S. federal income tax purposes, (3) make (other than in the ordinary course of business), revoke or modify any Tax election, (4) file any amended Tax Return, (5) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or foreign Law) with respect to any Tax, or (6) settle or compromise any Tax liability or surrender any right to claim a Tax refund, in each case (other than in the case of clause (2)), to the extent such action would reasonably be expected to adversely affect have an adverse effect on Purchaser or materially delay any of its Affiliates (including the ability Purchased Companies for a Post-Closing Period) that is material;
(xx) enter into or modify any Intercompany Arrangement, other than (A) any Intercompany Arrangement that is terminated and settled at Closing in accordance with Section 5.6, or (B) any Affiliated Account-Level Service Contract that constitutes a purchase order on terms no less favorable to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required the Business than arms’ length market terms would be, containing a purchase requirement for the transactions contemplated hereby Business to purchase during the twelve (12)-month period immediately following, or pursuant to perform its respective covenants and agreements under this Agreement which the Business has purchased during the twelve (12)-month period immediately preceding, the date hereof, in each case, in the aggregate, no more than $500,000 of goods and/or services on an annual basis; or
(xxi) authorize any of, or commit or agree to consummate take, whether in writing or otherwise, or do any of, the transactions contemplated hereby on a timely basis. Notwithstanding anything foregoing actions.
(c) Anything to the contrary set forth in Section 5.1 or this Agreement notwithstanding, the parties hereto acknowledge and agree that nothing in this Section 5.2 shall be deemed to limit the transfer of Excluded Assets prior to, at or after the Closing.
(other than Sections 5.2(bd) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response Anything to the Pandemic contrary in this Agreement notwithstanding, nothing in this Section 5.2 shall prohibit or otherwise restrict in any way the Pandemic Measures; providedoperation of the business of Seller, that such party shall provide prior notice to and consult in good faith with the other party Seller Entities or their respective Affiliates, except solely with respect to the extent such actions would otherwise require consent conduct of the Business by Seller, the other party under this Section 5.1 or Section 5.2Seller Entities, the Purchased Entities, the Purchased Consolidated Ventures and their respective Affiliates.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (Cbre Group, Inc.)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except (i) as set forth in Section 5.2 of Business Prior to the Effective Time. During Disclosure Schedules, (ii) in connection with the period from PLPA Termination, (iii) as required by applicable Law or as a result of any Health Measures, (iv) as otherwise expressly required by the date of this Agreement to the Effective Time or earlier termination terms of this Agreement, except (v) as expressly contemplated reasonably required to implement the Pre-Closing Reorganization, or permitted by this Agreement (including vi) as set forth in the Company Disclosure Schedule), required by law or as consented Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and Sellers shall cause its Subsidiaries to, conduct its business in the ordinary course in all material respects and Transferred Entities to use commercially reasonable efforts to maintain and conduct the Business in all material respects in the ordinary course and, to the extent consistent therewith, use commercially reasonable efforts to preserve intact its business organizationthe Business’s organizations and goodwill, and to manage cash and other working capital items of the Business consistent with past practice (including the timing of collection of accounts receivables and the payment of accounts payable subject to any seasonal, cyclical or market fluctuations affecting the Business); provided that (A) the failure of any Transferred Entities to take any action prohibited by Section 5.2(b) shall not be deemed a breach of this Section 5.2(a) and (B) Purchaser’s written consent with respect to any action or matter pursuant to Section 5.2(b) shall be deemed to constitute consent for purposes of this Section 5.2(a).
(b) Except (w) as set forth in Section 5.2 of the Disclosure Schedules, (x) as required by applicable Law or as a result of any Health Measures, (y) as otherwise expressly required, expressly permitted by the terms of this Agreement, or (z) as reasonably required to implement the Pre-Closing Reorganization, Sellers shall not and shall cause the Transferred Entities not to do any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) authorize or effect any amendment to, or change, the services Organizational Documents of its employees any Transferred Entity in any material respect;
(ii) issue, sell, pledge (or grant any Lien on) or transfer or propose to issue, sell, pledge or transfer any equity or equity-based interests of any of the Transferred Entities, or securities convertible into, or exchangeable or exercisable for, or options with respect to, or warrants to purchase, or rights to subscribe for, equity interests or any of the Transferred Entities, in each case other than to a Transferred Entity;
(iii) except as required by the terms of any Benefit Plan or Collective Bargaining Agreement in effect as of the date hereof and its advantageous set forth on Section 3.17(b) of the Disclosure Schedules, (A) grant to any Business Employee, Former Business Employee or any other current or former individual independent contractor of the Transferred Entities any increase in compensation or benefits (other than immaterial increases in base salary (and any corresponding increases in target annual bonuses to the extent tied to a percentage of base salary) in the ordinary course of business relationshipsconsistent with past practice (including in connection with ordinary course of business promotions) with respect to any Business Employees whose annual base salary is less than [***] (prior to such increase)); (B) accelerate or commit to accelerate the funding, payment or vesting of the compensation or benefits provided to any Business Employees, Former Business Employee or any other current or former individual independent contractor of the Transferred Entities, including under any Benefit Plan or any other benefit or compensation plan, agreement, contract, program, policy or arrangement; (C) establish, adopt, modify, amend or terminate any Benefit Plan or any other benefit or compensation plan, policy, program, contract, agreement or arrangement that would be a Benefit Plan if in effect on the date hereof (other than actions taken with respect to Seller Benefit Plans that do not increase annual or long-term incentive compensation of any Business Employee or any other individual independent contractor of the Transferred Entities or materially increase the cost or liability of the Business or Transferred Entities); or (D) grant or announce any cash or equity or equity-based incentive awards, bonus, retention, change in control, transaction, severance or similar compensation or any increase in the salaries, bonuses or other compensation and benefits payable to any of the Business Employees, Former Business Employees or any other current or former individual independent contractor of the Transferred Entities (or any of their respective dependents or beneficiaries);
(iv) transfer (or accept the transfer of) the sponsorship of or any liabilities or obligations relating to any Seller Benefit Plan to a Transferred Entity, or transfer the sponsorship of any Transferred Entity Benefit Plan to any non-Transferred Entity;
(v) (A) hire, promote or engage, or otherwise enter into any employment or consulting agreement or arrangement with, any individual who would be a Business Employee or individual independent contractor of a Transferred Entity whose annual base salary would be more than [***] (other than the hiring of any individual below the level of director to replace any Business Employee who resigns or whose employment is terminated, in each case on the same or substantially similar terms and conditions of employment as similarly situated individuals of the Transferred Entities and pursuant to a form offer letter that is Benefit Plan set forth on Section 3.17(b) of the Disclosure Schedules), or (B) terminate any Business Employee, other than for cause, whose annual base salary exceeds [***];
(vi) (A) make any acquisition (by merger, consolidation or acquisition of stock or assets or otherwise) of any assets, interests in any business enterprise or businesses in excess of [***] individually or in the aggregate or (B) sell, pledge, dispose of or encumber any material assets of a Transferred Entity for consideration in excess of [***] individually or in the aggregate, other than sales or dispositions of inventory in the ordinary course of business;
(vii) enter into any Contract for the purchase or lease (as lessee) of real property providing for a purchase price or annual payments in excess of [***];
(viii) settle, pay, discharge, cancel, or compromise any Proceeding (other than a Tax Proceeding) or intentionally waive or release any material rights of a Transferred Entity other than involving solely money damages in an amount less than [***];
(ix) except (A) in the ordinary course of business consistent with past practice with respect to Material Contracts described in Section 3.12(a)(i), (ii), and (bxii) or (B) as expressly permitted as an exception to another clause of this Section 5.2(b), enter into any new Contract that would have been a Material Contract (or waive any material provision of, materially amend, terminate, fail to renew, or cancel any Material Contract) if entered into prior to the date hereof;
(x) make any change in any material method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law;
(xi) (A) sell, assign, transfer or grant any exclusive license to any material Business Owned Intellectual Property, (B) allow any material Business Registered Intellectual Property to lapse or go abandoned, other than at the end of its maximum statutory term, or (C) disclose any material Trade Secrets or other confidential information of the Transferred Entities to any Person (other than pursuant to a written agreement with reasonable confidentiality obligations and use restrictions);
(xii) permit any Transferred Entity to incur, create or assume any Indebtedness or commitment in respect of any Indebtedness (including debt evidenced by loan, notes, bonds, debentures or other similar instruments) in excess of [***] in the aggregate, other than revolving credit borrowings that will be repaid at or prior to the Closing or to grant or suffer to exist any Lien on its assets other than Permitted Liens;
(xiii) permit any Transferred Entity to make loans or advances to, guarantees for the benefit of, or any investments in, any Person, other than (A) loans, advances, guarantees and investments made solely among the respective Affiliates of Sellers that will be settled at or prior to the Closing, or (B) the granting of trade credit in the ordinary course of business;
(xiv) with respect to any Transferred Entity, (A) make (except in the ordinary course of business), revoke or change any material Tax election, (B) settle or compromise any material Tax Proceeding or other material Tax claim or assessment, (C) adopt (except in the ordinary course of business) or change any material Tax accounting method or period, (D) file any material amended Tax Return, (E) enter into any material closing agreement relating to Taxes, or (F) consent to any extension or waiver of any limitation period with respect to any material Tax Proceeding or other material Tax claim or assessment, or (G) surrender any right to claim a material Tax refund; in each case excluding, for the avoidance of doubt, any such action with respect to any Seller Tax Group or Seller Tax Group Return;
(xv) except as expressly may be required by this Agreement Law or any bargaining obligations, (including A) enter into, adopt, extend, renew, modify, terminate or materially amend any Collective Bargaining Agreement, or (B) recognize or certify any labor union, labor organization, works council, employee representative or group of employees as the bargaining representative for any Business Employees;
(xvi) implement or announce any employee layoffs, furloughs, reductions in force, plant closings, reductions in compensation or other similar actions that trigger notice obligations under the WARN Act;
(xvii) waive or release any noncompetition, nonsolicitation, nondisclosure or other restrictive covenant obligation of any Business Employee, Former Business Employee or current or former independent contractor of the Transferred Entities or the Business;
(xviii) except as contemplated by Section 5.6(a), alter or change the duties, or transfer the employment, of (A) any Business Employee such that the individual is no longer employed by the Transferred Entities or primarily or exclusively devoted to the Transferred Entities or the Business; or (B) any other employee of Sellers or their Affiliates (other than the Transferred Entities) such that the individual is employed by the Transferred Entities or primarily or exclusively devoted to the Transferred Entities or the Business;
(xix) liquidate, dissolve, or propose or adopt any plan of complete or partial liquidation, dissolution, restructuring, recapitalization, bankruptcy, receivership, insolvency or similar Proceeding with respect to any Transferred Entity;
(xx) make any capital expenditures or commitments in excess of [***] in the aggregate, or fail to make any capital expenditures as set forth in the Company budget set forth on Section 5.2(b)(xx) of the Disclosure Schedule Schedules in excess of [***] in the aggregate, except (A) as set in the budget set forth on Section 5.2(b)(xx) of the Disclosure Schedules or (B) amounts to be paid in full prior to the Purchaser Disclosure Schedule)Closing or reflected in Closing Working Capital; or
(xxi) authorize any of, required by law or as consented commit or agree to take, whether in writing by or otherwise, or do any of, the other party, each of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything foregoing actions.
(c) Anything to the contrary set forth in Section 5.1 or this Agreement notwithstanding, nothing in this Section 5.2 (other than Sections 5.2(b) and 5.2(f)shall prohibit or otherwise restrict in any way the operation of the businesses of the Remaining Seller Group or the Transferred Entities, to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response except solely with respect to the Pandemic conduct of the Business by the Remaining Seller Group and the Transferred Entities.
(d) Other than the right to consent or withhold consent with respect to the Pandemic Measures; foregoing, nothing contained in this Agreement shall be construed to give to Purchaser, directly or indirectly, rights to control or direct the Business’s operations prior to the Closing. Prior to the Closing, Sellers and their Affiliates shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of the operations of the Business. Purchaser acknowledges and agrees that Sellers and their Affiliates may (i) repay or cause to be repaid any Indebtedness or Transaction Expenses of the Transferred Entities or (ii) settle or eliminate any intercompany balances and accounts pursuant to Section 5.12; provided, however, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require that any Cash Amounts are used to repay Indebtedness or Transaction Expenses or to settle or eliminate any intercompany balance and accounts after 12:01 a.m. (Eastern Time) on the Closing Date, then the Cash Consideration shall be adjusted accordingly on a dollar-for-dollar basis. The Transferred Entities may make any distribution of Cash Amounts, in each case, at any time prior to 12:01 a.m. (Eastern Time) on the Closing Date without the consent of, or notice to, Purchaser or any of the other party under this Section 5.1 its Affiliates or Section 5.2Representatives.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct of Business Prior to the Effective Time. During the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as expressly contemplated or permitted by this Agreement (including a) Except (i) as set forth in Section 5.2(a) of the Company Seller Disclosure Schedule)Schedules, (ii) as required by law applicable Law or Contract, (iii) as otherwise contemplated or required by the terms of this Agreement or (iv) as consented to by the Purchaser Parties in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company from the date of this Agreement to the Closing or, if earlier, the termination of this Agreement, Seller shall, and shall cause its Subsidiaries each Seller Entity to, conduct its business in the ordinary course in all material respects and use commercially reasonable efforts to maintain and (A) conduct the Business in all material respects in the ordinary course, (B) preserve intact its business organizationintact, in all material respects, the services operation of the Business and (C) preserve in all material respects their respective commercial relationships with customers, suppliers, employees and other Persons with whom any Seller Entity deals in connection with the conduct of the Business in the ordinary course; provided that no action by Seller or any of its employees and its advantageous business relationships, and Subsidiaries with respect to matters specifically addressed by any provision of Section 5.2(b) shall be deemed a breach of this Section 5.2(a).
(b) except as expressly required by this Agreement Except (including i) as set forth in Section 5.2(b) of the Company Seller Disclosure Schedule or the Purchaser Disclosure Schedule)Schedules, (ii) as required by law applicable Law or Contract, (iii) as otherwise expressly permitted or required by the terms of this Agreement or (iv) as consented to by the Purchaser Parties in writing by (such consent not to be unreasonably withheld, conditioned or delayed), with respect to the other partyBusiness, each from the date of this Agreement to the Company and Purchaser Closing or, if earlier, the termination of this Agreement, Seller shall not, and shall cause their respective Subsidiaries each Seller Entity not to, knowingly take do any of the following:
(i) amend its Organizational Documents in a manner that reasonably would be expected to prevent or materially delay or impede the consummation of the Transaction;
(ii) make capital expenditures or acquire any property, plant and equipment constituting Purchased Assets or Assumed Liabilities for an aggregate cost in excess of $200,000;
(iii) settle or release any Proceedings relating to the Business, Purchased Assets or Assumed Liabilities for an amount in excess of $100,000 or involving nonmonetary remedies that would be binding on the Purchaser Parties or any of the Purchased Assets following the Closing, except with respect to matters arising under or in connection with this Agreement or the Transaction;
(iv) except as required by the terms of any Benefit Plan as in effect on the date hereof or, provided that Parent receives advance written notice thereof from Seller, for any commitment for which Seller and its Subsidiaries are solely obligated to pay or in connection with any action that would reasonably be expected applies uniformly to adversely affect Business Employees and other similarly situated employees of Seller or materially delay its Subsidiaries, (A) grant to any Business Employee any increase in compensation or benefits; (B) grant any equity or equity-based or other incentive awards to, or accelerate the ability to obtain any necessary approvals vesting, funding or payment of any Regulatory Agency such awards held by, any Business Employee; (C) enter into, terminate or amend any severance, change in control, retention, termination, employment or other Governmental Entity required service agreement with any Business Employee; (D) adopt, enter into, terminate or amend any Transferred Benefit Plan (or any plan, program, policy, agreement or other arrangement that would be a Transferred Benefit Plan if it were in existence as of the date hereof); or (E) cause any Seller Benefit Plan to become a Transferred Benefit Plan;
(v) (A) terminate or transfer the employment of, or reallocate the duties or responsibilities of, any Business Employee such that such person would not be a Business Employee at the Closing, other than terminations for cause, (B) transfer the transactions contemplated hereby employment of any employee of Seller or its Affiliates who is not a Business Employee as of the date hereof to perform its respective covenants and agreements under this Agreement cause such person to become a Business Employee at the Closing, or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything (C) hire any individual who is primarily related to the contrary set forth Business with a base salary in Section 5.1 excess of $100,000, other than in the ordinary course of business but only with respect to any new hires occurring on or Section 5.2 prior to September 1, 2019;
(vi) enter into or amend any labor or collective bargaining agreement relating to any Business Employee, other than entering into or amending any labor or collective bargaining agreements if such action applies uniformly to Business Employees and other similarly situated employees of Seller or its Subsidiaries, or recognize, certify or negotiate with any labor union or labor organization as the bargaining representative of any of the Business Employees;
(vii) abandon, dispose of or terminate any rights to any material Transferred Intellectual Property or otherwise permit any of its rights to any such Transferred Intellectual Property to lapse or expire (other than Sections 5.2(bexpiration upon its statutory term);
(viii) and 5.2(f(A) amend in a way that is materially adverse to the Purchaser Parties, voluntarily terminate or cancel any Material Contract (other than any nonrenewal or expiration of such Material Contract according to such Material Contract’s terms), (B) waive any material right under any Material Contract or (C) enter into any Contract that, if in effect on the date hereof, would have been a Material Contract;
(ix) voluntarily terminate, cancel or fail to which this sentence shall not applyrenew any Transferred Permit;
(x) sell, assign, lease, sublease, license, transfer, divest or otherwise dispose of or encumber any Purchased Assets, or grant or otherwise create or consent to the creation of any Liens on any Purchased Assets (other than Permitted Liens), a party in each case other than (A) dispositions of used, obsolete, damaged, worn-out or surplus equipment, property or other assets, (B) transactions (including sales and its Subsidiaries may take other transfers) with or to customers in the ordinary course and (C) dispositions of any commercially reasonable actions that such party reasonably determines are necessary other immaterial assets in the ordinary course (other than nonexclusive licenses of Intellectual Property Rights granted in the ordinary course of business consistent with past practice);
(xi) sell, assign, lease, sublease, license, transfer, divest or prudent for it to take otherwise dispose of or not take in response to the Pandemic encumber any Seller Licensed Patents or the Pandemic Measures; providedSeller Licensed IP, that such party shall provide prior notice to and consult in good faith with the other party except to the extent not in conflict with the rights contemplated to be granted to the Purchaser pursuant to this Agreement;
(xii) acquire any ownership interest in any real property for the Business or enter into any purchase and sale or option agreement or any other similar agreement relating to acquiring any ownership interest in any real property for the Business;
(xiii) mortgage, pledge, encumber or materially amend, modify or terminate any Transferred Lease (other than any nonrenewal or expiration of such actions would otherwise require consent Transferred Lease according to such Transferred Lease’s terms);
(xiv) enter into any material financing or guarantee arrangement, agreement or undertaking with any customer of the other party under this Section 5.1 Business or Section 5.2any financial institution that permits recourse to the Purchaser Parties or any of their Subsidiaries that would constitute an Assumed Liability; or
(xv) authorize any of or commit or agree to take the foregoing actions.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except (i) as set forth in Section 5.2 of Business Prior to the Effective Time. During Seller Disclosure Schedules, (ii) as required by applicable Law, (iii) as required or otherwise expressly contemplated by the period terms of this Agreement (including Section 5.12) or (iv) as part of any COVID-19 Measures, from the date of this Agreement to the Effective Time Closing or earlier the valid termination of this AgreementAgreement in accordance with Section 8.1, and except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to Purchaser may otherwise consent in writing by Purchaser (or, in the case of clause (b), the Company) to (such consent not to be unreasonably withheld, conditioned or delayed), Seller shall (a) Company shall, and shall cause its Subsidiaries to, ) use reasonable best efforts to (A) conduct its business the Business in all material respects in the ordinary course in all material respects and use commercially reasonable efforts (B) preserve substantially intact the Business; provided, that no action by any Seller Entity with respect to maintain and preserve intact its business organization, the services matters specifically addressed by any other provision of its employees and its advantageous business relationships, and this Section 5.2 shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of such other provision.
(b) except Except (i) as expressly set forth in Section 5.2 of the Seller Disclosure Schedules, (ii) as required by applicable Law, (iii) as required or otherwise expressly contemplated by the terms of this Agreement (including Section 5.12) or (iv) as set forth part of any COVID-19 Measures, from the date of this Agreement to the Closing or the valid termination of this Agreement in accordance with Section 8.1 (or upon (1) any purported termination of this Agreement by Purchaser or (2) any Proceeding brought by Purchaser to terminate, or declare invalid, this Agreement, in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, case of each of the Company foregoing clauses (1) and Purchaser (2), from and after the Outside Date) and solely with respect to the Business, Seller shall not, and shall cause their respective Subsidiaries each Seller Entity and each Purchased Entity not to, knowingly do any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) except as may be required under any Benefit Plan currently in effect, (A) grant or announce to any Business Employee or other individual service provider of Seller or any of its Affiliates primarily dedicated to the Business any new compensation or benefits or any increase in compensation or benefits, (B) accelerate the vesting, funding or time of payment of any compensation or benefits, (C) hire, terminate (other than for cause), furlough or temporarily lay off any Business Employee or other individual service provider of Seller or any of its Affiliates primarily dedicated to the Business, other than in the ordinary course of business with respect to any such Business Employee or other individual service provider whose annual base compensation is no greater than $175,000, or (D) establish adopt, enter into, materially modify or amend or terminate any (1) Purchased Entity Benefit Plan (or any other benefit or compensation plan, policy, agreement or arrangement that would be a Purchased Entity Benefit Plan if in effect on the date hereof) or (2) Seller Benefit Plan, other than any such actions taken in the ordinary course that apply equally to Business Employees and similarly situated employees of the Seller Entity and its Subsidiaries;
(ii) authorize or effect any amendment to or change the organizational documents of any Purchased Entity;
(iii) issue or authorize the issuance of any equity interests or grant any options, warrants, or any equity appreciation rights, phantom units or profit participation rights in respect of equity interests, or other rights to purchase or obtain any of its equity securities or issue, sell or otherwise dispose of any of its equity securities or redeem, repurchase or otherwise acquire any securities of any Purchased Entity (other than to another Purchased Entity);
(iv) (A) incur any Indebtedness of any Purchased Entity or the Business other than (x) borrowings under Seller’s and its Affiliates’ current Credit Facilities in the ordinary course of business, (y) intercompany transactions among Purchased Entities in the ordinary course of business or which are settled at or prior to the Closing and (z) intercompany transactions between Seller Entities, on the one hand, and Purchased Entities, on the other hand, which are settled at or prior to the Closing, (B) make any acquisition of any assets or businesses or any capital investment in or loan to any Person other than acquisitions of inventory, supplies and similar assets in the ordinary course of business and acquisitions of businesses or assets already contracted by any Seller Entity, Seller, any Purchased Entity or their respective Affiliates and set forth on Section 3.11(a)(v) of the Seller Disclosure Schedules, or (C) sell, pledge, dispose of or encumber any material assets or businesses other than sales of inventory, supplies and similar assets in the ordinary course of business and sales or dispositions of businesses or assets already contracted by any Seller Entity, Seller, any Purchased Entity or their respective Affiliates and set forth on Section 3.11(a)(v) of the Seller Disclosure Schedules, to a wholly owned Purchased Entity or as may be required by applicable Law;
(A) enter into any Contract in relation to the Business for (1) the purchase of real property or (2) the lease (as lessee) of real property providing for annual payments in excess of $200,000 or (B) exercise any option to extend any leases related to the Transferred Leased Property providing for annual payments in excess of $200,000 individually or in the aggregate;
(vi) initiate, settle or otherwise compromise any Proceeding with respect to the Business other than any Proceeding involving solely money damages in an amount no greater than $250,000 individually or $1,500,000 in the aggregate with all such Proceedings;
(vii) make any material change in any method of financial accounting, cash management, working capital or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law or are consistent with the Transaction Accounting Principles or otherwise apply generally to Seller;
(viii) (A) enter into, extend, terminate (other than any expiration of such Material Contract according to such Material Contract’s terms) or materially modify, materially amend or waive any right under any Material Contract, except in the ordinary course of business with respect to Material Contracts described in clauses (i), (iii), (viii) (but solely clause (x) thereof), (x), (xi), (xii) and (xv) of Section 3.11(a) or (B) cancel, compromise or settle any material claim, or intentionally waive or release any material right with respect to any Material Contract or the Business;
(ix) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or file for bankruptcy with respect to any Purchased Entity;
(x) terminate, suspend, amend or modify in any material respect, any Business Permit, except as required by applicable Law or a Governmental Entity;
(xi) sell, dispose of or permit to lapse any material Business IP, other than non-exclusive licenses granted in the ordinary course of business and statutory expirations of registered Business IP;
(xii) disclose any material trade secrets included in the Business IP to any third party, other than pursuant to confidentiality agreements (or equivalent legally binding obligations of confidentiality) in the ordinary course of business;
(xiii) (A) make any capital expenditure (which, for the avoidance of doubt, does not include internal labor or other internal costs that are capitalized) in excess of $250,000, individually or $500,000 in the aggregate, except as expressly provided by the budget set forth on Annex 1 to Section 5.2(b)(xiii) of the Seller Disclosure Schedules (the “Budget”) or (B) fail to make any capital expenditure contemplated to be made in Section 3.10(c)(2) of the Seller Disclosure Schedules (except a failure to complete any capital expenditure on the time set forth on such Seller Disclose Schedule shall not be a breach of this Section 5.2(b)(xiii)(B) if otherwise undertaken in good faith) or;
(xiv) delay or postpone the payment of accounts or other amounts payable or other obligations or liabilities, recognize any deferred revenue or accelerate the collection or billing of any accounts or other amounts receivable, in each case, outside the ordinary course of business;
(xv) (A) make or change any material Tax election, (B) adopt or change any material Tax accounting method or change any material Tax accounting period, (C) settle or compromise any material Tax Proceeding, (D) file any material amended Tax Return, (E) request or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment in respect of material Taxes (other than pursuant to customary extensions of the due date to file a Tax Return obtained in the ordinary course of business), (F) surrender any right to claim a material Tax refund or credit or (G) initiate participation in any voluntary disclosure program or enter into any voluntary disclosure agreement with any Taxing Authority with respect to material Taxes;
(xvi) (A) enter into, materially modify, or terminate any Labor Agreement (other than any termination in accordance with its terms) or (B) recognize or certify any labor union, works council or other labor organization or group of employees as the bargaining representative for any Business Employees;
(xvii) implement or announce any employee layoffs, plant closings, or other actions that triggers the notice obligations under the WARN Act;
(xviii) with respect to Business Employees whose annual base compensation is $175,000 or above, any former employee of the Business, or any individual independent contractor of the Business, enter into an agreement to waive or release any noncompetition, non-solicitation, nondisclosure or other restrictive covenant obligations;
(xix) (A) reassign or modify the duties of (x) a Business Employee such that he or she is no longer a Business Employee or (y) any other employee of the Sellers Entities such that he or she would become a Business Employee, or (B) transfer any employee into or out of the Purchased Entities (other than as expressly contemplated by Section 5.7);
(xx) enter into, extend, or increase the amount of any Credit Enhancement; or
(xxi) authorize any of, or commit or agree to take, whether in writing or otherwise, or do any of, the foregoing actions.
(c) Anything to the contrary in this Agreement notwithstanding, the parties hereto acknowledge and agree that nothing in this Section 5.2 shall be deemed to limit the transfer of Excluded Assets prior to, at or after the Closing, and for the avoidance of doubt, nothing in this Section 5.2 shall limit Seller’s ability to take any action that would reasonably be expected to adversely affect the extent exclusively related to the Excluded Assets or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything Retained Liabilities.
(d) Anything to the contrary set forth in Section 5.1 or this Agreement notwithstanding, nothing in this Section 5.2 (shall prohibit or otherwise restrict in any way the operation of the business of Seller, the other than Sections 5.2(b) and 5.2(f)Seller Entities or their respective Affiliates, to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response except solely with respect to the Pandemic or conduct of the Pandemic Measures; providedBusiness by Seller, that such party shall provide prior notice to and consult in good faith with the other party to Seller Entities, the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2Purchased Entities and their respective Affiliates.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (Alight, Inc. / Delaware)
Covenants Relating to Conduct of Business. 5. 1Conduct Section 6.1 Conduct of the Business of the Acquired Company Prior to the Effective TimeClosing. During the period Except as otherwise expressly permitted by this Agreement, from the date of this Agreement to the Effective Time or earlier termination Closing Date, the Acquired Company shall, and ▇▇▇▇▇▇ shall cause the Acquired Company to, conduct the Business in the Ordinary Course of this AgreementBusiness and will use reasonable efforts to preserve intact the Business, keep available the services of its current officers and employees and keep and maintain its relationships with customers, suppliers, licensors, licensees, distributors and other third parties with the Acquired Company to the end that the Acquired Company’s goodwill and ongoing business shall be materially unimpaired at the Closing Date. In addition, and without limiting the generality of the foregoing, except as otherwise expressly contemplated or permitted by this Agreement (including as set forth in or described on Schedule 6.1, from the Company Disclosure Schedule), required by law or as consented date of this Agreement to in writing by Purchaser (or, in the case of clause (b)Closing Date, the Company) (such consent Acquired Company covenants and agrees that, it shall not do or cause to be unreasonably withheld, conditioned or delayed), (a) Company shall, and shall cause its Subsidiaries to, conduct its business in the ordinary course in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organization, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in the Company Disclosure Schedule or the Purchaser Disclosure Schedule), required by law or as consented to in writing by the other party, each occur any of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect changes or materially delay the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary events set forth in Section 5.1 3.11 or Section 5.2 any of the following without the prior written consent of the Purchaser:
(other than Sections 5.2(ba) and 5.2(f)issue, deliver, sell or grant (i) any shares of its capital stock, (ii) any securities convertible into or exchangeable for, or any options, warrants to which this sentence shall not apply)purchase or rights to subscribe for, a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary shares, voting securities or prudent for it convertible or exchangeable securities, (iii) any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or (iv) enter into an agreement to take do any of the foregoing;
(b) (i) grant to any employee, officer or not take director of the Acquired Company any increase in response to the Pandemic or the Pandemic Measures; providedcompensation, that such party shall provide prior notice to and consult in good faith with the other party including, without limitation, bonus opportunity, except to the extent required under employment agreements in effect as of the date hereof or applicable Law, and other than in the Ordinary Course of Business, (ii) grant to any employee, officer or director of the Acquired Company any increase in severance or termination pay, except to the extent required under any agreement in effect as of the date hereof or applicable Law, (iii) enter into any employment, consulting, indemnification, severance or termination agreement with any such actions employee, officer or director, (iv) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or Benefit Plan, or (v) take any action to accelerate any rights or benefits, or make any determinations not in the Ordinary Course of Business, under any collective bargaining agreement or Benefit Plan;
(c) (i) incur any Indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Acquired Company, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the Ordinary Course of Business or (ii) make any loans, advances or capital contributions to, or investments in, any other Person;
(d) make or change any election in respect of Taxes, file any Tax Return (without prior opportunity for the Purchaser to review and comment thereon) or any amendment to a Tax Return (without prior opportunity for the Purchaser to review and comment thereon), enter into any closing agreement, settle any claim or assessment in respect of any amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(e) (i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of liabilities or obligations in the Ordinary Course of Business, (ii) cancel any material Indebtedness (individually or in the aggregate) or waive any claims or rights or (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Acquired Company is a party;
(f) acquire by merging or consolidating with, or by purchasing assets of, or by any other manner, any Person or division, or business of or equity interest in any Person, except for purchases of inventory, components or supplies in the Ordinary Course of Business;
(g) sell, lease, or otherwise dispose of, or agree to sell, lease or otherwise dispose of, any of its assets, except for sales of inventory, components or supplies in the Ordinary Course of Business;
(h) renew or enter into any non-compete, exclusivity or similar agreement that would restrict or limit the operations of the Acquired Company, or, after the Closing, of the Purchaser and its subsidiaries, including Merger Sub;
(i) settle or compromise any material litigation, or waive, release or assign any material claims;
(j) engage in any forward selling or acceleration of customer orders or contracts, any deferral in paying payables, any deferral in making capital expenditures that are necessary to maintain the fixed assets of the Acquired Company in the Ordinary Course of Business or any delay in capital projects that are necessary to maintain the fixed assets of the Acquired Company in the Ordinary Course of Business, any grant of any discount to customers or any other change in the terms of conditions of sale or purchase (including payment and delivery terms) other than in the Ordinary Course of Business or any other changes intended to increase the current income and cash collection of the Acquired Company prior to the Closing Date by accelerating revenue that would otherwise require consent be collected after the Closing Date or deferring payment that would otherwise be expected to be made prior to the Closing Date;
(k) fail to maintain insurance coverage at presently existing levels so long as such insurance is available at commercially reasonable rates;
(l) authorize any of, or commit or agree to take any of, the foregoing actions; or
(m) do or cause to occur any of the other party under this foregoing with respect to Fast Food Services.
Section 5.1 or Section 5.26.2 [Intentionally Left Blank.]
Appears in 1 contract
Sources: Merger Agreement (Flowers Foods Inc)
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except (w) as set forth in Section 5.2 of Business Prior to the Effective Time. During Seller Disclosure Schedules, (x) as required by applicable Law, (y) as otherwise contemplated by the period from the date of this Agreement to the Effective Time or earlier termination terms of this Agreement, except or (z) as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented Purchaser may otherwise consent to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), from the date of this Agreement to the Closing, Seller shall cause the Purchased Entities (aand Subsidiaries thereof) Company shallto use commercially reasonable efforts to, and shall vote its interest in any Joint Venture (to the extent any relevant matter is voted upon by the holders of interests in the applicable Joint Venture and the organizational documents of the applicable Joint Venture grant the applicable Seller Entity or Purchased Entity or Subsidiary thereof the right to vote on such matter) and take such other action to the extent within its control so as to cause its Subsidiaries such Joint Venture to use commercially reasonable efforts to, conduct its the business in of the ordinary course Purchased Entities, their Subsidiaries and the Joint Ventures in all material respects and use commercially reasonable efforts in the Ordinary Course of Business; provided, however, that no action by the Purchased Entities, their Subsidiaries or the Joint Ventures with respect to maintain and preserve intact its business organization, the services matters specifically addressed by any other provision of its employees and its advantageous business relationships, and this Section 5.2 shall be deemed a breach of this Section 5.2(a) unless such action would constitute a breach of such other provision.
(b) except as expressly required by this Agreement Except (including w) as set forth in Section 5.2 of the Company Seller Disclosure Schedule or the Purchaser Disclosure Schedule)Schedules, (x) as required by law applicable Law, (y) as otherwise contemplated by the terms of this Agreement, or (z) as consented Purchaser may otherwise consent to in writing by (such consent not to be unreasonably withheld, conditioned or delayed), Seller shall cause the other party, each of the Company Purchased Entities (and Purchaser shall notSubsidiaries thereof) not to, and shall vote its interest in any Joint Venture (to the extent any relevant matter is voted upon by the holders of interests in the applicable Joint Venture and the organizational documents of the applicable Joint Venture grant such Seller Entity or Purchased Entity or Subsidiary thereof the right to vote on such matter) and take such other action to the extent within its control so as to cause their respective Subsidiaries such Joint Venture not to, knowingly take do any of the following:
(i) effect any amendment to, or change, the organizational documents of any Purchased Entity, Subsidiary thereof or any Joint Venture;
(ii) issue, sell, pledge or transfer or propose to issue, sell, pledge or transfer any equity interests of any Purchased Entity (or any of its Subsidiaries or any Joint Ventures), or securities convertible into, or exchangeable or exercisable for, or options with respect to, or warrants to purchase, or rights to subscribe for, equity interests of any Purchased Entity (or any of its Subsidiaries or any Joint Ventures);
(iii) incur, create or assume (A) any indebtedness for borrowed money, other than (x) in the Ordinary Course of Business (excluding indebtedness incurred for the payment of dividends), (y) any Shareholder Loans pursuant to the Investor Loan Facility or (z) that will be settled at or prior to Closing, or (B) any Lien, other than Permitted Liens, with respect to any material asset other than (x) those that will be discharged at or prior to the Closing or (y) in the Ordinary Course of Business;
(iv) acquire any assets or dispose of any assets (excluding Real Property, which shall be governed by clause (vi), and Business Intellectual Property, which shall be governed by clause (v)), in each case, outside of the Ordinary Course of Business, other than transactions where the amount of upfront consideration paid or transferred in connection with such transactions would not exceed $1,000,000 in the aggregate;
(v) acquire or dispose of any material right or material license in any owned Business Intellectual Property, in each case other than the grant of non-exclusive licenses in the Ordinary Course of Business;
(vi) (A) acquire any interest in real property or sell, assign, transfer, lease, license, encumber or abandon any Real Property, in each case other than (x) in the Ordinary Course of Business and for consideration not in excess of $1,000,000 (including the granting of any access rights or licenses with respect to Owned Real Property for telecommunications, apiary, hunting, walking, mountain biking or similar access licenses which do not materially affect the operations of the business of the Purchased Entities, their Subsidiaries and the Joint Ventures), or (y) transactions among the Purchased Entities, their Subsidiaries or the Joint Ventures, or (B) voluntarily terminate or cancel (other than upon expiration in accordance with its terms), or amend, modify or waive any material right or material benefit under, any Contract for Leased Real Property other than (x) in the Ordinary Course of Business and with respect to any Contract the value of which does not exceed $1,000,000 or (y) any such action that is more favorable to the Purchased Entities, their Subsidiaries and the Joint Ventures;
(vii) (A) amend any material term of, or waive any material right under, or voluntarily terminate (other than upon expiration in accordance with its terms), any Material Contract unless such action is more favorable to the Purchased Entities, their Subsidiaries and the Joint Ventures, or (B) enter into any Contract that, if in effect on the date hereof, would be a Material Contract, other than, in each case of clauses (A) and (B), (x) in the Ordinary Course of Business, (y) as expressly permitted by another provision of this Section 5.2(b) or (z) for the automatic renewal or extension of any Material Contract pursuant to its terms;
(viii) make any capital expenditures or commitments for capital expenditures that exceed the amounts set forth in the 2025 business plan and budget delivered to Purchaser by more than $500,000;
(ix) settle or compromise any Proceeding, or enter into any consent decree or settlement agreement with any Governmental Entity, against any Purchased Entity (or Subsidiary thereof or any Joint Venture), other than settlements or compromises of any Proceeding (A) in the Ordinary Course of Business, (B) in which any Purchased Entity (or Subsidiary thereof or any Joint Venture) is named as a nominal defendant, or (C) where the amount paid in settlement or compromise does not exceed $[* * * * *] individually or $[* * * * *] in the aggregate (excluding any amounts paid by insurance or by Seller and its Subsidiaries (other than the Purchased Entities, their Subsidiaries and the Joint Ventures)) (it being agreed and understood that this clause (ix) shall not apply with respect to Tax matters, which shall be governed by clause (x));
(x) solely with respect to any Purchased Entity (or Subsidiary thereof or Joint Venture), (A) make, change or revoke any material Tax election, (B) change any annual accounting period or change any material method of accounting for Tax purposes, (C) settle any claim or assessment in respect of a material amount of Taxes, (D) file or amend any income, premium or other material Tax Return inconsistent with past practice, (E) file any request for a ruling with any Taxing Authority, (F) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or foreign Law), or (G) surrender any right to claim a material Tax refund, offset or other reduction, in each case, to the extent such action would reasonably be expected to adversely affect any of the Purchaser or its Affiliates (including, after the Closing, the Purchased Entities, their Subsidiaries and the Joint Ventures) in any Post-Closing Period;
(xi) voluntarily terminate or permit to lapse the coverage of any material insurance policy held by a Purchased Entity or Subsidiary thereof or a Joint Venture unless an alternative insurance policy providing materially delay comparable coverage for the Purchased Entities, their Subsidiaries and the Joint Ventures is obtained concurrently therewith;
(xii) make any material change in any method of financial accounting or financial accounting practice or policy applicable to the Purchased Entities, their Subsidiaries or the Joint Ventures, other than such changes as are required by IFRS (or, in the case of RCL, U.S. GAAP) or applicable Law or are consistent with the Transaction Accounting Principles or otherwise apply generally to Seller Parent and its Subsidiaries;
(xiii) form or dissolve, wind down or liquidate any Purchased Entity (or Subsidiary thereof or any Joint Venture) or merge or consolidate any Purchased Entity (or Subsidiary thereof or any Joint Venture) with any other Person;
(A) terminate other than for cause any Senior Employee or (B) change the compensation of any Senior Employee (except for normal annual adjustments);
(xv) enter into non-compete or exclusivity agreements or to any agreements that include a change of control provision, unless the consent for the change of control in connection with this Transaction is obtained on or before the Closing;
(xvi) amend any corporate policies other than any changes that otherwise apply generally to Seller Parent and its Subsidiaries;
(xvii) with respect to RCL, engage in any business other than owning MFG; or
(xviii) authorize any of, or commit or agree to take, whether in writing or otherwise, or do any of, the foregoing actions.
(c) Nothing contained in this Agreement shall be construed to give to Purchaser, directly or indirectly, rights to control or direct the business or operations of the Purchased Entities, their Subsidiaries or the Joint Ventures prior to the Closing. Prior to the Closing, Seller (and its Subsidiaries) shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of the operations of the Purchased Entities, their Subsidiaries and the Joint Ventures. For the avoidance of doubt, nothing herein shall restrict the ability of the Purchased Entities, their Subsidiaries and the Joint Ventures to obtain make any necessary approvals of cash dividends or distributions to any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything Person prior to the contrary set forth Closing so long as indebtedness for borrowed money is not incurred in Section 5.1 connection with such dividends or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2distributions.
Appears in 1 contract
Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except for matters (x) set forth in Schedule 5.01(a), (y) expressly agreed to by Purchaser or (z) otherwise contemplated by the terms of Business Prior to the Effective Time. During the period this Agreement, from the date of this Agreement to the Effective Time or earlier termination of this AgreementClosing Date, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) (such consent not to be unreasonably withheld, conditioned or delayed), (a) Company shall, and Seller shall cause its Subsidiaries to, the Acquired Companies and their respective subsidiaries to conduct its business their respective businesses in the ordinary course in all material respects and a manner consistent with past practice and, to the extent consistent therewith, use commercially reasonable efforts to maintain preserve their material business relationships with customers, suppliers, distributors and preserve intact its business organizationothers with whom they deal in the ordinary course of business. In addition, the services of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including as set forth in Schedule 5.01(a) or otherwise contemplated by the terms of this Agreement, Seller shall not cause any of the Acquired Companies or any of their respective subsidiaries to do any of the following without the prior written consent of Purchaser (which consent shall not be unreasonably withheld or delayed):
(i) amend its articles of association or other comparable Organizational Documents;
(ii) declare or pay any dividend or make any other distribution to its shareholders whether or not upon or in respect of any shares of its capital stock; PROVIDED, HOWEVER, that (A) at any time prior to the close of business on the Closing Date, Seller will be allowed to withdraw or cause to be withdrawn any cash balances of the Acquired Companies and their respective subsidiaries, (B) dividends and distributions may continue to be made by the subsidiaries of each Acquired Company Disclosure Schedule to such Acquired Company or to other wholly owned subsidiaries of such Acquired Company and (C) dividends and distributions of cash and cash equivalents may continue to be made by (x) the Purchaser Disclosure ScheduleAcquired Companies to Seller and (y) Widia India to its shareholders;
(iii) redeem or otherwise acquire any shares of its capital stock or issue any capital stock (except upon the exercise of outstanding options) or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of capital stock;
(iv) adopt or amend in any material respect any Acquired Companies Benefit Plan maintained or contributed to, or required to be maintained or contributed to, by an Acquired Company or a subsidiary of an Acquired Company in respect of any Affected Employee (as defined in Section 5.06(a)) or Former Employee (as defined in Section 5.06(d)), except as required by law Applicable Law;
(v) grant to any executive officer or other key employee of an Acquired Company or a subsidiary of an Acquired Company any increase in compensation or benefits, except in the ordinary course of business consistent with past practice or as consented to may be required under existing agreements and except for any increases or bonuses for which Seller shall be solely obligated;
(vi) incur or assume any liabilities, obligations or indebtedness for borrowed money or guarantee any such liabilities, obligations or indebtedness, other than in writing by the other party, each ordinary course of business consistent with past practice;
(vii) subject any of the assets owned by an Acquired Company or a subsidiary of an Acquired Company as of the date of this Agreement to any Lien of any nature whatsoever that would have been required to be set forth in Schedule 2.06 or 2.07 if existing on the date of this Agreement;
(viii) waive any claims or rights of material value;
(ix) make any change in any method of accounting or accounting practice or policy other than those required or permitted by GAAP or required by Applicable Law;
(x) acquire by merging or consolidating with, or by purchasing all 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 or otherwise acquire any assets (other than inventory) that are material to the Acquired Companies and Purchaser shall not, and shall cause their respective Subsidiaries subsidiaries, taken as a whole;
(xi) make or incur any capital expenditure, other than capital expenditures (A) set forth in Schedule 5.01(a)(xi) or (B) which, individually, is not toin excess of (euro)50,000;
(xii) sell, knowingly take lease, license or otherwise dispose of any action asset that is material to the Acquired Companies and their respective subsidiaries, taken as a whole, except (A) inventory and obsolete or excess equipment or machinery sold or disposed of in the ordinary course of business, (B) leases set forth in Schedule 5.01(a)(xii) and (C) sales, leases, licenses or other disposals of assets to an Acquired Company or a subsidiary of an Acquired Company;
(xiii) enter into any lease, or renew any existing lease, of real property, except (A) any lease or renewal of lease set forth in Schedule 5.01(a)(xiii) and (B) any lease, or renewal of lease, which, individually, provides for rental payments not in excess of (euro)50,000 for the term of such lease or renewal;
(xiv) (A) terminate the Receivables Agreement dated as of December 27, 2001 (the "RECEIVABLES AGREEMENT") among Widia India, ICICI Bank of India and HDFC Bank or (B) amend or otherwise modify the Receivables Agreement in a way that would reasonably be expected to adversely affect have a material adverse effect on the financial condition of Widia India;
(xv) settle or materially delay compromise any suit, other than the ability to obtain any necessary approvals of any Regulatory Agency WIS Litigation (as defined in Schedule 2.12) in accordance with the Settlement Agreement (as defined below), or other Governmental Entity required for litigation matter or matter constituting the transactions contemplated hereby subject matter of an arbitration proceeding on terms which would require Purchaser to take any action, assume any liability or to perform its respective covenants and agreements under this forego any right;
(xvi) terminate, amend or otherwise modify any of the Separation Agreements;
(xvii) terminate, amend or otherwise modify the Settlement Agreement or the Share Purchase Agreement (as defined below), in each case, on terms which would require Purchaser to consummate take any action, assume any liability or forego any right; or
(xviii) agree, whether in writing or otherwise, to do any of the transactions contemplated hereby on a timely basis. Notwithstanding anything foregoing.
(b) Parent and Seller shall keep all insurance policies currently maintained by Seller or Parent, as applicable, with respect to the contrary set forth Acquired Companies and their respective subsidiaries and their respective assets and properties (the "GROUP INSURANCE POLICIES"), or suitable replacements therefor, in Section 5.1 or Section 5.2 full force and effect through the close of business on the Closing Date; it being understood that any and all Group Insurance Policies are owned and maintained by Parent, Seller and their respective affiliates (other than Sections 5.2(bthe Acquired Companies and their respective subsidiaries) and 5.2(fnone of Purchaser, the Acquired Companies or their respective subsidiaries will have any rights under such insurance policies from and after the Closing Date. Seller shall cause to be kept all insurance policies currently maintained by the Acquired Companies and their respective subsidiaries with respect to themselves and their respective assets and properties (the "ACQUIRED COMPANIES INSURANCE POLICIES" and, together with the Group Insurance Policies, the "INSURANCE POLICIES"), to which this sentence shall not apply)or suitable replacements therefor, a party in full force and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response effect through the close of business on the Closing Date. Purchaser acknowledges that, subsequent to the Pandemic Closing, neither Seller nor Parent shall have any responsibility to maintain, or the Pandemic Measures; providedcause to be maintained, that such party shall provide prior notice to in full force and consult in good faith with the other party to the extent such actions would otherwise require consent effect any of the other party under this Section 5.1 Insurance Policies or Section 5.2obtain any suitable replacement therefor covering any loss, liability, claim, damage or expense of the Acquired Companies or any of their respective subsidiaries.
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Covenants Relating to Conduct of Business. 5. 1Conduct (a) Except as set forth in Section 6.1 of Business Prior the Georgia Disclosure Schedules or as required by applicable Law, or as otherwise expressly required or permitted by the terms of this Agreement (including Section 6.10), or to the Effective Time. During extent related solely to the period Excluded Assets, the Retained Liabilities or the Retained Businesses, from the date of this Agreement to the Effective Time or earlier termination Closing, and except with the prior written consent of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in writing by Purchaser (or, in the case of clause (b), the Company) Florida (such consent not to be unreasonably withheld, conditioned or delayed), Georgia shall, and shall cause each other Georgia Entity and the Purchased Entity (aand any Subsidiary thereof) Company shallto, conduct the Business in all material respects in the ordinary course and use commercially reasonable efforts to preserve intact and maintain its current business organization and operations and relationships with customers and suppliers of, or others having material business dealings with, the Business; provided that no action by Georgia or its Subsidiaries that is specifically addressed by Section 6.1(b) shall be deemed a breach of this Section 6.1(a) unless such action would constitute a breach of Section 6.1(b).
(b) Except as set forth in Section 6.1 of the Georgia Disclosure Schedules or as required by applicable Law, or as otherwise expressly required or permitted by the terms of this Agreement (including Section 6.4, Section 6.10 or Article IX), or to the extent related solely to the Excluded Assets or Retained Liabilities, from the date of this Agreement to the Closing, Georgia shall not, and shall cause its Subsidiaries and the Purchased Entity (and each Subsidiary thereof) not to, conduct do any of the following with respect to the Business, the Transferred Assets, the Assumed Liabilities or the Purchased Entity (and each Subsidiary thereof) without the prior written consent of Florida (such consent not to be unreasonably withheld, conditioned or delayed):
(i) except (x) as may be required by a Georgia Benefit Plan as in effect on the date hereof or as may be established or amended not in contravention of this Agreement, (y) in connection with any action that generally applies to participating Business Employees and other similarly situated employees of Georgia and its business Affiliates or (z) for any grant, payment, award or arrangement for which Georgia or any of its Affiliates (other than the Purchased Entity or any of its Subsidiaries) shall retain all Liabilities, (A) grant or increase any compensation or benefit to any Key Business Employee, other than increases to base salary (and corresponding increases in incentive opportunities or other compensation or benefits calculated by reference to base salary) adopted in the ordinary course of business consistent with past practice, (B) accelerate the vesting, funding or payment of any compensation or benefits to any Key Business Employee, (C) adopt, establish, enter into, terminate, modify or materially amend any Purchased Entity Benefit Plan, other than in all material respects and use commercially reasonable efforts the ordinary course of business consistent with past practice, (D) hire, engage or promote (in each case other than to maintain and preserve intact its business organizationfill a vacancy) or terminate (other than for cause) the employment or engagement of any Key Business Employee, or (E) other than as required by applicable Law or deemed by Georgia in good faith as necessary to satisfy the Labor Process Obligations, enter into, modify, extend or terminate any Business Collective Bargaining Agreement or recognize or certify any labor union, works council, or other labor organization or group of employees as the bargaining representative for any Business Employees;
(ii) authorize or effect any amendment to, or change, or waiver under, the services organizational documents of the Purchased Entity (or any Subsidiary thereof) in any manner adverse to Florida;
(iii) (A) issue, sell, pledge, transfer, redeem or repurchase, or authorize or propose to issue, sell, pledge, transfer, redeem, repurchase or authorize, or reclassify, any equity interests of the Purchased Entity (or any of its Subsidiaries) or securities convertible into, or exchangeable or exercisable for, or options with respect to, or warrants to purchase, or rights to subscribe for, equity interests of the Purchased Entity (or any of its Subsidiaries) or (B) with respect to the Purchased Entity, declare, set aside or pay any non-cash dividend or non-cash distribution with respect to any equity interests thereof;
(iv) permit the Purchased Entity (or Subsidiary thereof) to incur, create or assume, or otherwise incur, create or assume with respect to the Business (and in the case of the following clauses (A) and (B), excluding Settlement Indebtedness and Settlement Liens (as such terms are defined in the Chicago Transaction Agreement)), (A) any indebtedness for borrowed money in excess of $50,000,000 in the aggregate, other than in the ordinary course of business (provided that such indebtedness for borrowed money constitutes Purchased Entity Funded Debt to the extent outstanding immediately prior to the Closing) or that will be settled at or prior to the Closing or (B) any Lien, other than Permitted Liens, with respect to any material asset of the Business other than those (1) in the ordinary course of business or (2) that will be discharged or released at or prior to the Closing;
(A) acquire any material assets, Person or business (whether by merger, consolidation or acquisition of stock or assets or otherwise), (B) enter into any joint venture with any Person or (C) make any loans, investments or advances to or in any Person (other than routine advances of business expenses to employees and its advantageous extensions of credit to customers in the ordinary course of business relationshipsand loans, and investments or advances solely between or among Georgia, a Georgia Entity, the Purchased Entity or any of their respective Subsidiaries);
(bvi) dispose of, lease, license, transfer or, abandon any material Transferred Assets or other material assets of the Business (including material Business Intellectual Property), in each case, other than disposals, leases, non-exclusive licenses, transfers or abandonment in the ordinary course of business;
(vii) (A) except as expressly contemplated by Section 6.11(e) with respect to Shared Contracts, amend, cancel, extend, renew or waive any material right under, or voluntarily terminate (other than upon expiration or automatic extension or renewal in accordance with its terms), any Business Permit or any Business Material Contract or the portion relating to the Business of any Shared Contract, except in each such case, for immaterial amendments or modifications in the ordinary course of business consistent with past practice, or (B) enter into any Contract that, if in effect on the date hereof, would be a Business Material Contract outside the ordinary course of business consistent with past practice;
(viii) make any material change in any method of financial accounting or financial accounting practice or working capital or cash management (including with respect to settlement liabilities, settlement receivables, settlement deposits, accounts receivable and accounts payable, but excluding the utilization of cash to repay outstanding indebtedness for borrowed money) practice or policy applicable to the Business, other than such changes as are required by this Agreement GAAP or applicable Law;
(including ix) other than as set forth in the Company Disclosure Schedule capital expenditure budget made available to Florida, make any capital expenditures or commitments for capital expenditures that have post-Closing obligations in excess of $5,000,000 individually, or $50,000,000 in the aggregate;
(x) settle, initiate or compromise any Proceeding, audit or investigation (other than any Proceeding, audit or investigation in respect of Taxes or Tax matters) if such settlement or compromise (A) requires payment to any other Person or involves a claim by Georgia (or any Subsidiary thereof) of amounts in excess of $5,000,000, (B) imposes ongoing restrictions on the operations of the Business or the Purchaser Disclosure SchedulePurchased Entity (or Subsidiary thereof) (other than customary confidentiality obligations), (C) is brought by a Governmental Entity or (D) involves criminal penalties;
(xi) other than with respect to any Georgia Combined Tax Return or any Georgia Tax Group, (A) make (other than consistent with past practice), revoke or change any material Tax election, (B) change any annual accounting period, (C) adopt, elect (other than consistent with past practice) or change any material method of accounting, (D) surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, (E) enter into any closing or similar agreement with any Taxing Authority in respect of any material Tax, (F) settle or abandon any material Tax claim, audit, or assessment or material Proceeding in respect of Taxes or Tax matters for an amount materially in excess of amounts reserved therefor, (G) amend any material Tax Return, or (H) consent to any extension or waiver of the limitations period applicable to any material Tax audit, claim, Proceeding or assessment, other than any such extension that is automatic or automatically granted (it being agreed and understood that none of clauses (i) through (x) nor clauses (xii) through (xviii) of this Section 6.1(b) shall apply with respect to Tax compliance matters (other than clause (xviii) insofar as it relates to this clause (xi));
(xii) make any material change to (A) the operation or security of, or any administrative, technical or physical safeguards related to, any Information Technology or privacy or data security or (B) any policies or procedures with respect to Personally Identifiable Information or confidential or other sensitive information (including customer data) or Business Data Security Requirements, except (x) as required by law applicable Law, any Governmental Entity or any Contract in effect as consented of the date hereof, (y) as would not be material and adverse to the Business, taken as a whole, or (z) as may be necessary or reasonable to contain or remediate a breach, cybersecurity incident, cybersecurity vulnerability, or other Security Incident, or any other occurrence that requires the Business to remediate its cybersecurity program;
(xiii) enter into any material new line of business or agree to or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization under applicable Law;
(xiv) enter into, amend or modify any Related Party Agreement, solely with respect to any such Contracts that will survive the Closing and not be terminated pursuant to Section 6.4;
(xv) (A) amend, cancel, extend, or renew any material term of, or waive any material right under, or voluntarily terminate (other than upon expiration or automatic extension or renewal in accordance with its terms), any lease governing a Business Leased Real Property, except in each such case, for immaterial amendments or modifications in the ordinary course of business consistent with past practice, or (B) grant any party the right to use or occupy any Business Owned Real Property, except in the ordinary course of business consistent with past practice;
(xvi) issue, sell, grant or pledge to any Business Employee, Former Business Employee or Business Independent Contractor (A) any equity interest in Georgia or any of its Subsidiaries or (B) any warrant, option, “phantom” stock right, stock appreciation right, stock-based performance unit or other right, agreement, arrangement, Contract or commitment pursuant to which Georgia or any of its Subsidiaries is or may become obligated to issue, sell, grant or pledge any equity interest in, or voting security of, Georgia or any of its Subsidiaries;
(xvii) transfer or reassign the duties of (A) a Business Employee such that he or she is no longer a Business Employee or (B) any other employee of Georgia or its Affiliates such that he or she would become a Business Employee, other than as expressly contemplated pursuant to Section 9.1 herein or with respect to any transfers of employment (including as a result of a written internal transfer request initiated by an employee) in the ordinary course and consistent with past practice (notice of which shall be promptly delivered to Florida); or
(xviii) authorize any of, or commit or agree to take, whether in writing by or otherwise, or do any of, the other partyforegoing actions.
(c) Nothing contained in this Agreement shall be construed to give to Florida, each directly or indirectly, rights to control or direct the Business’s operations prior to the Closing. Prior to the Closing, Georgia (and its Subsidiaries) shall exercise, subject to the terms and conditions of this Agreement, complete control and supervision of the Company and Purchaser shall not, and shall cause their respective Subsidiaries not to, knowingly take any action that would reasonably be expected to adversely affect or materially delay operations of the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its respective covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basisBusiness. Notwithstanding anything in this Agreement to the contrary set forth contrary, the Parties acknowledge and agree that nothing in this Section 5.1 6.1 shall be deemed to limit the Georgia Entities’ ability to transfer the Excluded Assets or Section 5.2 the Retained Liabilities to Georgia or any of its Subsidiaries (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party the Purchased Entity and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary Subsidiaries) in accordance with this Agreement (including Section 6.10) or prudent for it to take the Transferred Assets or not take in response Assumed Liabilities to the Pandemic Purchased Entity and its Subsidiaries, in each case prior to, at or after the Pandemic Measures; provided, that such party shall provide prior notice to and consult Closing or prohibit Georgia from implementing the Georgia Pre-Closing Restructuring Steps in good faith accordance with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.26.10.
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Covenants Relating to Conduct of Business. 5. 1Conduct Except as set forth in Schedule 6.01 of Business Prior to the Effective Time. During Seller Disclosure Schedules or as required by applicable Law or as otherwise expressly permitted or required by the period terms of this Agreement or the Other Purchase Agreements, from the date of this Agreement to the Effective Time Closing, the Sellers shall (i) promptly notify the Purchaser of any event that has or earlier termination would reasonably be expected to have a Business Material Adverse Effect and (ii) conduct the Business in the usual, regular and ordinary course in substantially the same manner as previously conducted and, to the extent consistent therewith, use commercially reasonable efforts to keep intact their respective businesses, keep available the services of this Agreementtheir current employees and preserve their relationships with customers, suppliers, licensors, licensees, distributors and others with whom they deal, in each case, as it relates to the Business. Notwithstanding the foregoing, except as expressly contemplated or permitted by this Agreement (including as set forth in Schedule 6.01 of the Company Seller Disclosure Schedule), Schedules or as required by law applicable Law or as consented to in writing otherwise expressly permitted or required by Purchaser (or, in the case terms of clause (b)this Agreement or the Other Purchase Agreements, the CompanySellers shall not do (or permit their Affiliates to do) any of the following without the prior written consent of the Purchaser (such consent not to be unreasonably withheld, conditioned withheld or delayed), ):
(a) Company shallgrant to any Business Employee any increase in compensation or benefits (including the acceleration of time of payment or vesting of any benefits) or make any bonus (other than retention or similar bonuses that are provided for in any Assigned Contract or Assumed Employee Plan), and shall cause its Subsidiaries toexcept as (i) required by Law, conduct its business (ii) in the ordinary course of business and consistent with past practice, (iii) as may be required under existing Contracts, (iv) as otherwise provided for in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organization, the services budget of its employees and its advantageous business relationships, and (b) except as expressly required by this Agreement (including the Business as set forth in Schedule 6.01(a) of the Company Seller Disclosure Schedules, or (v) for any increases or bonuses for which the Sellers or their respective Affiliates shall be solely obligated to pay;
(b) incur or assume any liabilities, obligations or indebtedness, in each case, for borrowed money with respect to the Business or guarantee any such liabilities, obligations or indebtedness, other than in the ordinary course of business and consistent with past practice;
(c) permit, allow or suffer any of the Purchased Assets to become subjected to any Lien, other than Permitted Liens, of any nature whatsoever that would have been required to be set forth in Schedule 4.01 of the Seller Disclosure Schedules if existing on the date of this Agreement;
(d) make any material change in any method of accounting or accounting practice or policy applicable to the Business, other than those required by GAAP;
(e) make or incur any capital expenditure in connection with the Business or agree to any commitment of a capital nature with respect to the Business that is not included in the budget for the 12 month period commencing on the Balance Sheet Date attached hereto as Schedule 6.01(e) of the Seller Disclosure Schedules (the “Capital Expenditures Budget”);
(f) sell, lease, license or otherwise dispose of any of the Purchased Assets that are material, individually or in the aggregate, to the Business, except services provided and inventory and obsolete or excess equipment sold in the ordinary course of business and consistent with past practice;
(g) modify or terminate any Lease for Leased Real Property other than any modifications directly related to space reductions that (A) do not increase the Purchaser’s duties or obligations under the relevant sublease and do not decrease the Purchaser’s rights or benefits under the relevant sublease, or (B) are otherwise reasonably acceptable to the Purchaser;
(h) enter into, modify (except as permitted below) or terminate any Material Contract, submit binding bids, proposals or commitments which, if accepted, would result in any Seller, or the Purchaser Disclosure Schedule)Business, required by law entering into a Material Contract, or as consented agree to any work order, change order or other addition or modification to a Customer Contract with a value of more than $500,000 to the Business, in writing by the each case, other partythan any such modification, each termination, work order, change order or other addition set forth in Schedule 6.01(h) of the Company and Purchaser shall notSeller Disclosure Schedules or that does not adversely affect the Business;
(i) except with respect to the waiver, and shall cause their respective Subsidiaries not release, assignment, settlement or compromise of accounts payable in the ordinary course of business, waive, release, assign, settle or compromise any material claims or litigation of, or with respect to, knowingly take the Business, (i) of more than $500,000 individually, or (ii) taking into account only the waiver, release, assignment, settlement or compromise of any action material claims or litigation of, or with respect to, the Business of more than $50,000, $2,000,000 in the Combined Aggregate;
(j) terminate or waive any right or rights that individually or in the aggregate would reasonably be expected to adversely affect be material in value to the Business;
(k) adopt any collective bargaining agreement applicable to the Business, or materially delay adopt or amend, in any material respect, any Assumed Employee Plan other than as required by Law; fail to give all notices and other information required to be given to the ability to obtain Business Employees of the Sellers, any necessary approvals collective bargaining unit representing any group of Business Employees of the Sellers and any Regulatory Agency or applicable Governmental Authority under the WARN Act, the National Labor Relations Act, the Code, the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) and other Governmental Entity required for applicable Law in connection with the transactions contemplated hereby provided for in this Agreement; or
(l) authorize any of, or commit or agree to perform its respective covenants and agreements under this Agreement take, whether in writing or to consummate otherwise, or do any of, the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in Section 5.1 or Section 5.2 (other than Sections 5.2(b) and 5.2(f), to which this sentence shall not apply), a party and its Subsidiaries may take any commercially reasonable actions that such party reasonably determines are necessary or prudent for it to take or not take in response to the Pandemic or the Pandemic Measures; provided, that such party shall provide prior notice to and consult in good faith with the other party to the extent such actions would otherwise require consent of the other party under this Section 5.1 or Section 5.2foregoing actions.
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