Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to: (i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents; (ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries; (iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement; (iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences); (v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice; (vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests; (vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs); (viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million; (ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise; (x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity; (xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages; (xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax; (xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business; (xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements; (xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice; (xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment; (xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement; (xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement; (xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws); (xx) implement any broad-based early retirement plan or announce the planning of such a program; (xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries; (a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract; (xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect; (xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or (xxv) agree, authorize or commit to do any of the foregoing. (b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement. (c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 3 contracts
Sources: Bid Conduct Agreement, Bid Conduct Agreement (ARRIS International PLC), Bid Conduct Agreement (CommScope Holding Company, Inc.)
Interim Operations. (a) Except The Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Wax Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (x1) required by applicable Law, (y2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly required by this Agreement or (z) otherwise set forth disclosed in Section 6.1 5.01(a) of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct their business the Retained Business in the ordinary course of business consistent with past practice practice, and in compliance with all applicable Laws and, to the extent consistent therewith, it Company shall, and shall cause each of its SubsidiariesSubsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable best efforts to preserve their material business organizations the Retained Business’ organization intact and maintain in all material respects the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates. associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement until and prior to the earlier of the Wax Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the termination of this Agreement in accordance with its termsCompany Overview Presentation, and except as (A1) required by applicable Law or as contemplated Law, (2) expressly required by the Scheme Document Annex, Transaction Documents (Bincluding in connection with the Separation and the Distribution) or (3) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth disclosed in Section 6.1 5.01(b) of the Company Disclosure Letter), the Company will shall not and will cause shall not permit any of its Subsidiaries not to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, incorporation or bylaws (or other applicable comparable governing documents;
) (ii) merge, enter into other than amendments to the governing documents of any scheme Subsidiary of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company that would not prevent, delay or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock impair the Wax Merger or assets or otherwise) any corporation, partnership or the other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwiseTransactions), dispose of(B) split, grantcombine, transfer, subdivide or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company (including Ordinary Shares) or any which remains a wholly owned Subsidiary after consummation of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPPtransaction), (C) declare, set aside or pay any dividend or distribution payable in connection with the Comcast Warrants or Charter Warrants (including exercise thereof)cash, each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any another direct or indirect wholly owned Subsidiary of the Company or to the Company or to any other direct or indirect wholly owned Subsidiary (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the ordinary course of business consistent with past practiceCompany Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock stock, or other equity interests;
(viiE) reclassifypurchase, splitrepurchase, combine, subdivide or redeem, purchase redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock, Company Securities stock or any Other Subsidiary Securities securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the acquisition forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any Ordinary Shares tendered wholly owned Subsidiary of the Company by current the Company or former employees or directors in order to pay Taxes in connection with any other wholly owned Subsidiary of the vesting of Company RSUsCompany);
(viiiii) incur merge or consolidate with any Indebtedness other Person, or guarantee restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Indebtedness of another Person (except Subsidiary is the surviving entity in connection with respect to obligations of an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of Company Plan as in effect on the Company or any of its Subsidiaries, except for date hereof: (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreementestablish, (B) loans adopt, amend or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make terminate any material changes with respect to Company Plan or amend the terms of any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries outstanding equity-based awards other than settlements any such action taken for purposes of replacing, renewing or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose extending a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the broadly applicable material Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or as required by agreements, plans, programs or arrangements in effect benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase in any manner the compensation, bonus or pension, welfare or other benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, of any director, consultant officer or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in with respect to (1) employees below the aggregate level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the case of employees who are executive officers severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as Company or any such increases are consistent with past practiceof its Subsidiaries, (CE) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend take any Benefit Plan (other than routine changes action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of benefits under any Person or funding of any Benefit Company Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereofincluding any equity-based awards), (DF) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP determined or (EG) except as required by Law, establish, adopt, enter into or amend forgive any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former loans to directors, consultants, officers or employees of the Company or any of their beneficiariesits Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, howeverfurther, that notwithstanding anything to the contrary in Separation Agreement shall provide that SpinCo shall assume the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent obligations of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other with respect to such Indebtedness (and Holdco, Parent and their Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(xviv) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or respect to the Company or any Subsidiary thereof in excess of $120,000Retained Business, other than the agreements expressly contemplated by this Agreement;
with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (xviiiincluding sports rights) enter into any Contract that would require payment with third parties or video game production, which is subject to Section 5.01(b)(x), make or give rise commit to any rights (capital expenditures other than notice(A) to such other party or parties in connection with the transactions contemplated repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by this Agreement;
(xixinsurance or if the portion of which that is not covered by insurance is less than $100,000,000) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (bB) other than in the ordinary course of business consistent with past practice or expirations of any such Contract and in the ordinary course aggregate not in excess of business consistent 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with past practice in accordance with respect to the terms of such ContractRetained Business, amendtransfer, modifylease, supplementlicense, waive, terminatesell, assign, conveylet lapse, subject to abandon, cancel, mortgage, pledge, place a Lien upon or otherwise transfer, in whole or in part, rights or interest pursuant to or in dispose of any Material Contract;
material Intellectual Property; provided that this clause (xxiiivi) other than renewals in the shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of businessfilm and television programming or video game production, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or letting lapse, replacement policies underwritten by insurance abandonment, and reinsurance companies of nationally recognized standing or selfcancellations, and Liens that are ordinary course non-insurance programsexclusive licenses, in each case, providing coverage equal to of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or greater $75,000,000 individually in any event (other than transactions among the coverage under Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force SpinCo Business and effect(E) Affiliation Agreements;
(xxivvii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not exercise including any rights under Intellectual Property, which is governed by Section 5 5.01(b)(vi)), except for (A) sales, leases, licenses or Section 6 other dispositions of any properties or assets (excluding capital stock of the Company’s current articles Retained Subsidiaries) with a fair market value not in excess of association $50,000,000 individually if the transaction is not in the ordinary course or otherwise adopt $100,000,000 individually in any event or implement (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any “poison pill” shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other shareholder rights plan to acquire, any such shares, except (or otherwise issue A) for any Rights Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Company’s current articles of associationBridge Facility) or similar interests (C) by wholly owned Subsidiaries to the Company or rightsto any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii); or;
(xxvix) agreewith respect to the Retained Business, authorize other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to do spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of the foregoing.
(b) Neither Buyer nor Company its Retained Subsidiaries shall knowingly take enter into any such transaction that would, or permit any of their Subsidiaries to take any action that is would reasonably likely to prevent be expected to, prevent, materially delay or materially interfere with impair the consummation of the transactions contemplated by this Agreement.Transactions;
(cx) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date other than capital expenditures made in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each 5.01(b)(v) and other than purchases and licenses of the Company film and Arris US Holdings Inc. is not, television and has not been within the five production programming (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iincluding s
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Fox Corp), Agreement and Plan of Merger (Walt Disney Co/), Agreement and Plan of Merger (Twenty-First Century Fox, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by From the date of this Agreement or (z) otherwise until the Tender Offer Purchase Time, except as set forth in Section 6.1 5.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time Schedule or the termination as expressly contemplated by any other provision of this Agreement Agreement, unless the Parent has consented in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)writing thereto, the Company shall, and shall cause each of its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not subsidiaries to:
(ia) amend or otherwise change, or authorize or propose to amend or otherwise change conduct its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, operations only in the ordinary course of business consistent with past practice;
(vib) declareuse reasonable efforts to preserve intact the business, set asideorganization, make goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or pay any dividend modify its respective Articles of Incorporation, Bylaws or other distributioncharter or organizational documents, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to that the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement shall file Articles Supplementary with respect to the voting of its capital stock or other equity interestsSeries B Preferred Stock with the SDAT;
(viie) reclassifynot authorize for issuance, splitissue, combinesell, subdivide grant, deliver, pledge or redeemencumber or agree or commit to issue, purchase sell, grant, deliver, pledge or otherwise acquire, directly or indirectly, encumber any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition shares of any Ordinary Shares tendered by current class or former employees or directors in order to pay Taxes in connection with the vesting series of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security capital stock of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns subsidiaries or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle other equity or compromise any litigation, audit, claim, action voting security or other Proceedings against equity or voting interest in the Company or any of its Subsidiaries subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than settlements or compromises issuances of any litigationShares or, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate case of clause (including for such purpose a reasonable estimate iv), shares of anticipated royalties or similar obligationsSeries B Preferred Stock (i) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) exercise of the Company included in the Company Reports filed Stock Options granted prior to the date hereof andof this Agreement to directors, officers, employees and consultants of the Company in accordance with the Option Plans as currently in effect; (ii) conversion of the Convertible Preferred Stock, (iii) exercise of the Warrants and (iv) exercise by Acquisition of the Option);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in each caselieu of, such settlement or compromise does not include in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any criminal liabilitydividends on, material injunctive relief or obligation make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to be performed by repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its Subsidiaries other than subsidiaries, except that the payment Company may pay an aggregate dividend of money damages$43,533.00 on the Convertible Preferred Stock on November 12, 2000 and as contemplated by Section 2.10 with respect to settlement of Company Stock Options;
(xiig) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) not (i) increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $85,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of subsidiaries except that the Company or any may enter into new employment agreements with each of its Subsidiaries, except Messrs. ▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇ (1"Management Employment Agreements") in the case of employees or consultants who are not executive officers of the Companyform attached hereto as Exhibits D and E, in the ordinary course of business consistent respectively, with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except thereto as may be required approved by GAAP Parent), or (Eiii) except as required by Law, establish, adopt, enter into or amend in any material respect or take action to accelerate, any material rights or material benefits under any collective bargaining bargaining, bonus, profit sharing, thrift, compensation, stock option (except as contemplated by Section 2.10), restricted stock (except to the extent described in existing employment agreements), pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current director or former directors, consultants, officers officer or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary employee (other than in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent ordinary course of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equitybusiness) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice;
practice in an aggregate amount not to exceed $1,000,000 or (xviiii) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries advances in the ordinary course pursuant to (A) working capital lines of business credit in an amount not to exceed $1,000,000 in the aggregate and (B) warehouse lines of credit set forth in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402Section 3.15(a)(v) of the Company (Disclosure Schedule, or any immediate family member renewal or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreementreplacement thereof;
(xviiik) enter into any Contract that would require payment not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employeesotherwise dispose of, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations properties or assets of the Company or any of its Subsidiariessubsidiaries, other than in the ordinary course of business;
(al) not authorize or make any capital expenditures (including by lease) in excess of $100,000 in the aggregate other than new Contracts with customers the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or suppliers financial reporting (including tax accounting and reporting) methods, principles or practices, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, enter into not amend, modify or terminate any material Contract that would have been a Material Contract had it been entered into prior to this Agreement or waive, release or assign any material rights or claims thereunder;
(bp) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in business, not enter into contracts that reasonably would involve financial obligations by the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material ContractCompany exceeding $100,000;
(xxiiiq) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program reorganization of the Company or any of its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effectsubsidiaries;
(xxivr) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not exercise any rights under Section 5 agree or Section 6 of the Company’s current articles of association commit in writing or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 3 contracts
Sources: Merger Agreement (Ac Acquisition Subsidiary Inc), Merger Agreement (Ac Acquisition Subsidiary Inc), Merger Agreement (Chesapeake Biological Laboratories Inc)
Interim Operations. (a) Except From the date of this ------------------ Agreement until the Closing Time, except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 5.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time Schedule or the termination as expressly contemplated by any other provision of this Agreement Agreement, unless the Parent has consented in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)writing thereto, the Company shall, and shall cause each of its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not subsidiaries to:
(ia) amend or otherwise change, or authorize or propose to amend or otherwise change conduct its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, operations only in the ordinary course of business consistent with past practice;
(vib) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its properties and assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective charter or certificate of incorporation, by-laws, partnership agreement or other charter or organization documents;
(e) except as required under Section 2.1, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock, (ii) in solely the case of the Company, declare, set aside, make aside or pay any dividend dividends on, or make other distributions in respect of, any of the Company's stock, or (iii) except as required under Section 2.1, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other distribution, payable in cash, stock, property equity or otherwise, with respect to debt securities or equity interests of the Company or any of its shares subsidiaries;
(g) not amend or other equity interests (except for cash dividends paid by otherwise modify the terms of any direct Company Stock Options or indirect wholly owned Subsidiary the Company Option Plan, the effect of which shall be to make such terms more favorable to the Company holders thereof or to any persons eligible for participation therein;
(h) other direct or indirect wholly owned Subsidiary than regularly scheduled seniority increases in the ordinary course of business consistent with past practice) , not increase the compensation payable or enter into to become payable to any agreement with respect to the voting of its capital stock directors, officers or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiariessubsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreementor grant any severance or termination pay to, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing employment or severance agreement with respect to any material amount of Tax director or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee officer of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits ofsubsidiaries, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or benefits under any collective bargaining bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current director, officer or former directors, consultants, officers or employees or employee of the Company of any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsits subsidiaries;
(xvi) grant a license not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any material Intellectual Property owned by other person outside the ordinary course of business consistent with past practice or any interest in any real properties (whether or not in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue or sell any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its Subsidiaries subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $100,000 in the aggregate; and (ii) advances, loans or other than indebtedness in the ordinary course of business consistent with past practicepractice in an aggregate amount not to exceed $100,000;
(xvik) allow any lapse not sell, lease, license, encumber or abandonment of otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material Intellectual Property, properties or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations assets of the Company or any of its Subsidiariessubsidiaries;
(al) other than new Contracts with customers not authorize or suppliers make any capital expenditures (including by lease) in excess of $100,000 in the aggregate for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, except as may be required by GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, enter into not amend, modify or terminate any Contract that would have been a Material Contract had it been entered into prior required to this Agreement be listed in Section 3.15 of the Company Disclosure Schedule or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien release or otherwise transfer, in whole or in part, assign any material rights or interest pursuant to or in any Material Contractclaims thereunder;
(xxiiip) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program reorganization of the Company or any of its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effectsubsidiaries;
(xxivq) not exercise take any rights action that would, or would be reasonably likely to, result in any of the representations and warranties set forth in this Agreement not being true and correct in any material respect (as if such representation or warranty were made and in effect on the date such action would have been taken, notwithstanding any other provisions hereof) or (except as to any action permitted under Section 5 or Section 6 5.4) any of the Company’s current articles conditions set forth in Article 7 or 8 not being satisfied; and
(r) except as to subsections (a), (b) and (c) of association Section 5.1, not agree or commit in writing or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 3 contracts
Sources: Merger Agreement (Marriott International Inc /Md/), Merger Agreement (Mi Subsidiary I Inc), Merger Agreement (Execustay Corp)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by From and after the execution and delivery of this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in accordance with its terms Section 7.1(a) of the Company Disclosure Schedule or (unless Buyer iii) as Parent shall otherwise approve consent in writing, such approval writing (which consent shall not to be unreasonably withheld, delayed or conditioned), the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their business respective businesses in the ordinary course consistent with past practice and Ordinary Course of Business in compliance with all applicable Laws andmaterial respects, to the extent consistent therewith, it (B) shall, and shall cause its SubsidiariesSubsidiaries to, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and (x) maintain in all material respects existing relations relationships and goodwill with Governmental Entities, key customers, supplierssuppliers and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, employees and business associates. Without (C) without limiting the generality of the foregoing foregoing, shall not, and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will shall cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws or other applicable governing documentsOrganizational Documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructurePerson, reorganize or completely or partially liquidate except for any such transactions solely among Wholly Owned Subsidiaries of the Company or any of its Subsidiaries;Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire (or agree to acquire by merger, scheme of arrangement, consolidation, acquisition of stock stock, equity or assets or otherwise) , any corporationbusiness, partnership Person, division, properties or assets from any other business organization Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any assets constituting a division individual transaction or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement$2 million in the aggregate;
(ivvi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or authorize otherwise enter into any Contract or understanding with respect to the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant voting of or transfer of any shares of capital stock of the Company (including Ordinary Shares) or capital stock or other equity or equity-based interests of any of its Subsidiaries Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any Company Securities options, warrants or Other Subsidiary Securities other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the issuance delivery of Ordinary any Common Shares upon (1) the vesting conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company RSUs (Notes in accordance with the Indenture and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Ordinary Preferred Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as payment of dividends on the Preferred Shares in effect as accordance with the terms of the date hereof Preferred Shares or (DB) the issuance or transfer of common stock or shares of such capital stock, other equity interests securities or convertible or exchangeable securities (1) by a wholly owned Wholly Owned Subsidiary of the Company to the Company or another wholly owned Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the ordinary course date of business this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and in a manner that would not have any material Tax consequencessubject to Section 4.3(g));
(vviii) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than to any direct or indirect wholly owned Subsidiary of between the Company and any of its Wholly Owned Subsidiaries in the ordinary course Ordinary Course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceBusiness);
(viix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise with respect to any of its shares capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for cash (A) dividends paid by any direct or indirect wholly owned Wholly Owned Subsidiary to the Company or to any other direct Wholly Owned Subsidiary of the Company or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice(B) or enter into any agreement with respect dividends payable to the voting holders of its capital stock Preferred Shares, payable in cash or other equity interestsPreferred Shares, in accordance with the terms of the Preferred Shares;
(viix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquireacquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, Company Securities other equity interests or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities (shares of its capital stock or other equity interests, other than (A) the acquisition withholding of any Ordinary Common Shares tendered by current to satisfy the payment of the exercise price on the exercise of a Company Option or former employees withholding Tax obligations upon the exercise, vesting or directors in order to pay Taxes in connection with the vesting settlement of Company RSUs)Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(viiixi) incur or assume any Indebtedness or indebtedness for borrowed money, guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness enter into a “keep well” or similar arrangement in an amount respect of indebtedness for borrowed money except for any such indebtedness not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize 2.5 million individually or make any capital expenditures in excess of $40 5 million in the aggregate;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except for (A) expenditures as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in in, the current Company’s capital forecast budget set forth in Section 6.1(a)(ix7.1(a)(xii) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwiseSchedule;
(xxiii) make enter into, terminate or materially amend any material changes with respect Contract pursuant to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against which the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where purchase from a third party service provider Software (A“Third Party IT Contracts”) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course Ordinary Course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement Business with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other involve aggregate annual payments of less than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws$300,000);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Benefitfocus, Inc.), Merger Agreement (Benefitfocus, Inc.), Merger Agreement (Benefitfocus, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed withheld or conditioned), the Company shalldelayed, and shall cause except as otherwise expressly contemplated by this Agreement, and except as required by applicable Laws) the business of it and its Subsidiaries to, conduct their business shall be conducted in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associatesassociates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required contemplated by this Agreement, (CB) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld, delayed withheld or conditioneddelayed) or (DC) as for transactions set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause not permit any of its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws incorporation or by-laws or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any of agreements or arrangements imposing material changes or restrictions on its Subsidiariesassets, operations or businesses;
(iii) acquire (by mergerassets outside of the ordinary course of business consistent with past practice from any other Person, scheme other than acquisitions pursuant to Contracts in effect as of arrangement, consolidation, acquisition the date of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementthis Agreement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any Shares or any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of business and in a manner that would not have such capital stock, or any material Tax consequences)options, warrants or other rights of any kind to acquire any Shares or any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien in excess of $5 million on any assets of the Company or any of its Subsidiaries;
(vi) make or forgive any loans, advances or capital contributions to or investments in any Person (Person, other than non-material advances to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business vendors and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, employees in the ordinary course of business consistent with past practice;
(vivii) enter into any agreement with respect to the voting of its capital stock or declare, set aside, make or pay any dividend or other distribution, or purchase, redeem or otherwise acquire any of its capital stock payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (capital stock except for cash (x) dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary of the Company or (y) a regular quarterly dividend paid in the ordinary course fourth quarter of business 2006 consistent with past practice, which shall not exceed $200,000 in the aggregate as set forth in Section 5.1(f) or enter into any agreement with respect to of the voting of its capital stock or other equity interestsCompany Disclosure Letter;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, Company Securities or ;
(ix) incur any Other Subsidiary Securities indebtedness for borrowed money (other than borrowings under the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company Company’s existing working capital debt facilities in the ordinary course of business and in a manner that would not have any material Tax consequences)consistent with past practice to fund working capital of the Company) or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ixx) shall not make or authorize or make any capital expenditures in excess of $40 5 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(xxi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xii) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental EntityGAAP;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xiixiii) other than in the ordinary course of business consistent with past practice, amend, modify or to the extent required terminate any Material Contract, or cancel, modify or waive any debts or claims held by Law, it or waive any rights;
(xiv) make any material Tax election, file take any material amended income position on any material Tax ReturnReturn filed on or after the date of this Agreement or adopt any tax accounting method that is inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, or settle or compromise resolve any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Taxcontroversy;
(xiiixv) other than pursuant to Contracts in effect prior to the date of this Agreement, transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess including capital stock of $50 million in the aggregateany of its Subsidiaries, except for (Ax) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of businessbusiness consistent with past practice, (By) any abandonment for sales of Intellectual Property that the Company obsolete assets or any Subsidiary determines (z) for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $5 million in the exercise aggregate;
(xvi) except as otherwise required by applicable Law, (i) increase the compensation, bonus or pension or welfare benefits of its reasonable business judgment to abandon (other than those increases in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) consistent with past practice (A) grantto employees below the Senior Vice President level or (B) resulting from the Company’s improved performance, increase based on existing 2005 incentive formulas), or provide make any retentionnew equity awards to, change of control, severance or termination payments or benefits to any director, consultant officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (Bii) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, amend or terminate or amend any Benefit Plan or amend the terms of any Benefit Plan or outstanding equity-based awards, or (other than routine changes iii) take any action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment payment, or fund or in any other way secure the payment, of any compensation or equity for the benefit of any Person or funding of benefits under any Benefit Plan (except (x) as required in connection with the termination of the Arris GroupPlan, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be extent not already required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementssuch Benefit Plan;
(xvxvii) grant a license of settle, or consent to any material Intellectual Property owned by settlement of, any actions, suits, claims or proceedings against the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration obligation or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate liability of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequencesi) alleging personal injury or named executive officer (as defined in 17 CFR 229.402) of the Company (property damage arising from exposure to asbestos or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights asbestos-containing materials (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined disputes paid under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local LawsCompany’s insurance not exceeding $50,000 per claimant);
, or (xxii) implement alleging any broad-based early retirement plan other injury or announce the planning of such a program;
damage (xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts disputes with customers or suppliers in the ordinary course of business consistent with past practicepractice and not exceeding $50,000 per claimant);
(xviii) take any action or omit to take any action that will waive, modify, compromise or extinguish any of the Company’s rights with respect to (A) any insurance coverage relating to any actions, suits or claims against the Company or any of its Subsidiaries alleging personal injury or property damage arising from exposure to asbestos or asbestos-containing materials, or (B) any agreements, understandings or arrangements relating to any such coverage;
(xix) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied, except actions or omissions expressly permitted by Section 6.2; provided that the foregoing shall not expand, diminish or modify in any way any of the Company’s express obligations hereunder;
(xx) enter into, terminate, amend or modify any Contract or transaction with any officer, director or Affiliate of the Company or any of its Subsidiaries or any Person beneficially owning five percent or more of the outstanding Shares or of the outstanding shares of any Subsidiary of the Company;
(xxi) enter into any Contract that would have been a Material Contract had it been purchase order (other than purchase orders entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract and in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other an amount less than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights$10 million); or
(xxvxxii) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or Parent will not and will not permit any of their its Subsidiaries to take any action or omit to take any action that is reasonably likely to prevent or materially interfere with the consummation result in any of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts conditions to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described Merger set forth in Section 897(c)(1) 7.2 or Section 7.3 not being satisfied, except actions or omissions expressly permitted by Section 6.12(c); provided that the foregoing shall not expand, diminish or modify in any way any of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the CompanyParent’s and Arris US Holdings Inc.or Merger Sub’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iexpress obligations hereunder.
Appears in 3 contracts
Sources: Merger Agreement (McJunkin Red Man Corp), Merger Agreement (Goldman Sachs Group Inc), Merger Agreement (McJunkin Red Man Holding Corp)
Interim Operations. (a) Except Each of the Company and Parent covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (x) unless Parent or the Company, as applicable, shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement, as provided in any Contract in effect as of the date of this Agreement, or as required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 the business of the Company Disclosure Letter, the Company covenants it and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business shall be conducted in the ordinary course consistent with past practice and in compliance with all applicable Laws Ordinary Course and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing, from the date of this Agreement until the earlier Effective Time, except as otherwise expressly: (i) contemplated by this Agreement; (ii) contemplated by any Contract entered into prior to, concurrently with or after the date of this Agreement by Parent with respect to the Other Parent Transactions (as such Contract may be amended, supplemented or otherwise modified from time to time); (iii) required by applicable Law or the terms of any Contract in effect on the date of this Agreement, (iv) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed) by the other Party; or (v) set forth in the corresponding subsection of Section 7.1 of the Effective Time Company Disclosure Letter, as it relates to the Company and its Subsidiaries, or on Section 7.1 of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries, each Party, on its own account, shall not and shall not permit its Subsidiaries to:
(i) make any material change to the nature of its business and operations;
(ii) make any change to its Organizational Documents as in effect on the date of this Agreement in any manner that would reasonably be expected to prohibit, prevent or materially impede, hinder or delay the ability of such Party to satisfy any of the conditions to, or the termination consummation of, the Merger or the other Transactions;
(iii) (A) merge or consolidate itself or any of its Subsidiaries with any other Person (expressly excluding, for the avoidance of doubt, any of the Other Parent Transactions), or (B) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, in each case, except (1) such transactions solely between or among, or solely involving, such Party and one or more of its wholly owned Subsidiaries, or a Subsidiary of such Party and one or more wholly owned Subsidiaries of such Subsidiary, (2) as would not reasonably be expected to result in a Company Material Adverse Effect or Parent Material Adverse Effect, as applicable, or (3) as would not reasonably be expected to prohibit, prevent or materially impede, hinder or delay the ability of such Party to satisfy any of the conditions to, or the consummation of, the Merger or the other Transactions;
(iv) except as required by the Company Agreement, issue, sell, grant, transfer or authorize the issuance, sale or grant, or otherwise enter into any Contract with respect to the voting of, any of its partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable (other than the issuance of partnership interests, limited liability company interests, shares of capital stock or equity interests (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries or (B) in respect of equity-based awards outstanding as of the date of this Agreement in accordance with its termstheir terms and, except as (A) required by applicable Law or applicable, the plan documents as contemplated by in effect on the Scheme Document Annex, (B) otherwise expressly required by date of this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change), or authorize securities convertible or propose to amend exchangeable into or otherwise change its articles of associationexercisable for any partnership interests, certificate of incorporationlimited liability company interests, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or equity interests, as applicable, or any of its Subsidiaries options, warrants or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement rights of any new offering periods under the Company ESPP)kind to acquire any partnership interests, (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof)limited liability company interests, each as in effect as shares of the date hereof or (D) the issuance or transfer of common capital stock or other equity interests by a wholly owned Subsidiary of the Company to the Company interests, as applicable, or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)such convertible or exchangeable securities;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its partnership interests, limited liability company interests, shares of capital stockstock or equity interests, as applicable, or securities convertible or exchangeable into or exercisable for any partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable;
(vi) waive, release, assign, settle or compromise any claim, action or proceeding, including any state or federal regulatory proceeding seeking damages or injunction or other equitable relief, which waiver, release, assignment, settlement or compromise would reasonably be expected to result in a Company Securities Material Adverse Effect or any Other Subsidiary Securities Parent Material Adverse Effect, as applicable;
(vii) other than in the acquisition Ordinary Course, make, change or revoke any material Tax election, adopt or change any material Tax accounting method, file any material amended Tax Return, settle any material Tax claim, audit, assessment or dispute for an amount materially in excess of the amount reserved or accrued on such Party’s most recent consolidated balance sheet included in the Parent Reports or Company Reports, as applicable, or surrender any Ordinary Shares tendered by current or former employees or directors in order right to pay Taxes in connection with the vesting claim a refund of Company RSUs)a material amount of Taxes;
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedurespolicies, except as required by changes in GAAP or Law or by a Governmental EntityGAAP;
(xiix) except with respect to make or declare any litigation, audit, claim, action dividends or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior distributions to the date hereof andholders of Common Units or Parent Common Stock, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Ordinary Course; or
(xxvx) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly Notwithstanding anything to the contrary in this Agreement, a Party’s obligations under Section 7.1(a) to take an action or permit any of their not to take an action, or to cause its Subsidiaries to take an action or not to take an action, shall, with respect to any action Persons (and their respective Subsidiaries) controlled by such Party, or in which such Party otherwise has a voting interest, but that is reasonably likely to prevent are not wholly owned Subsidiaries of such Party or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing have public equity holders, only apply (i) executed affidavits dated as to the extent permitted by the organizational documents and governance arrangements of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2)such entity and its subsidiaries, certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each extent a Party is authorized and empowered to bind such Subsidiary does not own entity and its subsidiaries and (iii) to the extent permitted by the Party’s or its Subsidiaries’ duties (fiduciary or otherwise) to such entity and its subsidiaries or any U.S. real property iof its equity holders.
Appears in 2 contracts
Sources: Merger Agreement (Enbridge Energy Management L L C), Merger Agreement (Enbridge Inc)
Interim Operations. (a) Except Crown and King each covenant and agree as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants to itself and agrees its Subsidiaries that, after the date hereof of this Agreement and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Crown or King, as applicable, shall otherwise approve in writing, such writing (which approval shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed)), and except as otherwise expressly contemplated by this Agreement or as set forth in Section 7.1(a) of such Party’s Disclosure Letter, (i) the Company shall, business of it and shall cause its Subsidiaries to, conduct their business shall be conducted in all material respects in the ordinary course consistent with past practice Ordinary Course and in compliance with all applicable Laws and, (ii) to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees licensors, licensees, creditors, lessors, Service Providers and business associates. associates and keep available the services of its and its Subsidiaries’ present Service Providers and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the generality of the foregoing and in furtherance thereofof Section 7.1(a), from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as otherwise (Aw) required by applicable Law or as expressly contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (Cx) Buyer may approve required by applicable Law, (y) as approved in writing by the other Party (such which approval shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or (Dz) as set forth in Section 6.1 7.1(b) of the Company such Party’s Disclosure Letter, the Company will each Party, on its own account, shall not and will shall cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize make or propose any change to amend such Party’s Organizational Documents or, except for amendments that would both not materially restrict the operations of such Party’s businesses and not reasonably be expected to prevent, materially delay or otherwise change its articles materially impair the ability of associationsuch Party to consummate the Transactions, certificate the Organizational Documents of incorporationany of such Party’s Subsidiaries, bylaws or other applicable governing documentsincluding, in the case of King, King Sub’s Organizational Documents;
(ii) mergeexcept for any such transactions among its direct or indirect wholly owned Subsidiaries, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, (A) merge or consolidate itself or any of its Subsidiaries with any other Person Person, or (B) restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiariesliquidate;
(iii) acquire assets outside of the Ordinary Course from any other Person (by mergerA) with a fair market value or purchase price in excess of $10,000,000 in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), scheme in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of arrangement“holdback” or similar contingent payment obligation, consolidationor (B) that would reasonably be expected to prevent, acquisition materially delay or materially impair the ability of stock or assets or otherwise) any corporationsuch Party to consummate the Transactions, partnership in each case, other than acquisitions of inventory or other business organization goods in the Ordinary Course and transactions among such Party and its direct or any assets constituting a division indirect wholly owned Subsidiaries or business line of any Person among such Party’s direct or any equity interests of any Person or enter into any joint venture or similar arrangementindirect wholly owned Subsidiaries;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of Encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or of any of its Subsidiaries (other than the issuance of shares (A) by its direct or indirect wholly owned Subsidiary to it or another of its direct or indirect wholly owned Subsidiaries, (B) in respect of equity-based awards outstanding as of the Company date of this Agreement, or (including C) granted in accordance with Section 7.1(b)(xvi) in each of clauses (B) and (C), in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other than any Permitted Encumbrances) over any material portion of such Party’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the Ordinary Shares) Course on any of its assets or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than Subsidiaries, except for Encumbrances (A) that are required by or automatically effected by Contracts in place as of the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date day hereof, (B) that do not materially detract from the issuance value of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), assets or (C) in connection with that do not materially impair the Comcast Warrants operations of such Party or Charter Warrants (including exercise thereof), each as in effect as any of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)its Subsidiaries;
(vvi) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to or from Crown and any of its direct or indirect wholly owned Subsidiary Subsidiaries or to or from King and any of the Company its direct or indirect wholly owned Subsidiaries, as applicable, or in accordance with Section 7.1(b)(xvi)) in excess of $1,000,000 in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceaggregate;
(vivii) except to the extent expressly provided by, and consistent with, Section 7.1(b)(vii) of such Party’s Disclosure Letter, declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company it or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practiceSubsidiary) or enter into modify in any agreement with material respect to the voting of its capital stock or other equity interestsdividend policy;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase (through such Party’s share repurchase program or otherwise) or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, Company Securities or any Other Subsidiary Securities (other than with respect to (A) the capital stock or other equity interests of a direct or indirect wholly owned Subsidiary of such Party or (B) the acquisition of any Ordinary Shares shares of Crown Common Stock or King Common Stock, as applicable, tendered by current Service Providers in connection with a cashless exercise of Crown Options or former employees King Options, as applicable, outstanding as of the date of this Agreement or directors in order to pay Taxes in connection with the exercise or vesting of Company RSUs);
(viii) incur any Indebtedness Crown equity awards or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries King equity awards, as applicable, outstanding as of the Company date of this Agreement or granted in accordance with Section 7.1(b)(xvi), pursuant to the terms of the Crown Stock Plan or King Stock Plan, as applicable, and the applicable award agreement, in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 millionOrdinary Course;
(ix) shall except to the extent expressly provided by, and consistent with, Section 7.1(b)(ix) of such Party’s Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (A) not authorize or make any capital expenditures in excess of $40 180 million in the aggregate, except for aggregate during any consecutive twelve (A12) month period (other than capital expenditures set forth in within the current capital forecast thresholds set forth in Section 6.1(a)(ix7.1(b)(ix) of the Company such Party’s Disclosure Letter or Letter), (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million (net of insurance proceeds) in the aggregate, except for (A) sales aggregate that such Party reasonably determines are necessary to avoid a material business interruption or maintain the safety and non-exclusive licenses integrity of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company asset or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, property or (C) dispositions of obsolete paid by any direct or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its indirect wholly owned Subsidiaries Subsidiary to such Party or to any other direct or indirect wholly owned Subsidiary of such Party, in each case in response to any unanticipated and subsequently discovered events, occurrences or developments (provided, that such Party will use its reasonable best efforts to consult with the ordinary course of businessother Party prior to making or agreeing to any such capital expenditure);
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse Ordinary Course or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xixany transaction or potential transaction described on Section 7.1(a) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practiceParty’s Disclosure Letter, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such ContractAgreement, adversely amend, modify, supplement, supplement or waive, terminate, assign, convey, subject to a Lien Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract other than (A) expirations and renewals of any such Contract in the Ordinary Course in accordance with the terms of such Contract, (B) non-exclusive licenses under Intellectual Property owned by Crown and its Subsidiaries or King or any of its Subsidiaries, as applicable, in each case, granted in the Ordinary Course, or (C) any agreement among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xxiiixi) other than renewals in the Ordinary Course or with respect to amounts that are not material to such Party and its Subsidiaries, taken as a whole, cancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries except debts or claims among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xii) settle or compromise, or offer or propose to settle or compromise any material Proceeding, including before a Governmental Entity, except in accordance with the parameters set forth in Section 7.1(b)(xii) of such Party’s Disclosure Letter; provided, that no such settlement or compromise, or offer in respect thereof, may involve any injunctive or other non-monetary relief which, in either case, imposes any material restrictions on the business operations of such Party and its Subsidiaries or Affiliates;
(xiii) amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(xiv) make, change or revoke any material election with respect to Taxes, change any material Tax accounting method or period, enter into any material closing agreement with respect to Taxes, enter into any material Tax sharing, allocation or indemnification agreement or arrangement, settle, compromise or otherwise finally resolve any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, or fail to file when due (taking into account any available extensions) any material Tax Return;
(xv) transfer, sell, lease, divest, cancel, abandon, allow to lapse or expire or otherwise dispose of, or permit or suffer to exist the creation of any Encumbrance upon, any assets (tangible or intangible), product lines or businesses material to it and its Subsidiaries, taken as a whole, including capital stock of any of its Subsidiaries, except in connection with (A) sales of or non-exclusive licenses of the foregoing provided in the Ordinary Course, (B) sales of obsolete assets, (C) sales, leases, licenses or other dispositions of assets (not including services or sales of inventory in the ordinary course of business) with a fair market value not in excess of $150 million in the aggregate other than pursuant to Material Contracts in effect prior to the date of this Agreement, amendor entered into after the date of this Agreement in accordance with this Agreement and (D) sales among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xvi) except as required by the terms of any Benefit Plan as in effect on the date of this Agreement, modifyas permitted under this Agreement or as required by applicable Law, terminateincrease or change the compensation or benefits payable to any Service Provider other than in the Ordinary Course; provided, cancel that, notwithstanding the foregoing, except as expressly disclosed in Section 7.1(b)(xvi) of such Party’s Disclosure Letter or let lapse required pursuant to a material insurance policy (Crown Benefit Plan or reinsurance policy) or self-insurance program of the Company or its Subsidiaries King Benefit Plan, as applicable, in effect as of the date hereofof this Agreement, unless simultaneous the Parties shall not: (A) grant any new long-term incentive or equity-based awards or amend or modify the terms of any such outstanding awards under any Crown Benefit Plan or King Benefit Plan, as applicable, (B) grant any retention or transaction bonuses, (C) increase or change the compensation or benefits payable to any executive officer (other than changes in health and welfare benefits that are generally applicable to all salaried Service Providers in the Ordinary Course), (D) terminate, enter into, amend or renew any material Benefit Plan, other than routine amendments to health and welfare plans (other than severance plans) that do not materially increase benefits or result in a material increase in administrative costs, or, other than as permitted by Section 7.1(b)(xvi) of such Party’s Disclosure Letter, adopt any compensation or benefit arrangement that would be a material Benefit Plan if it were in existence as of the date of this Agreement, (E) accelerate the vesting of any compensation for the benefit of any Service Provider, (F) increase or change the severance terms applicable to any Service Provider, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) other than as required by GAAP, change any assumptions required by GAAP used to calculate funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding rate in respect of any Benefit Plan or (I) terminate the employment of any executive officer (other than for cause) or hire any new executive officer (other than as a replacement hire receiving substantially similar terms of employment); provided, that, to the extent that a Party intends to hire an individual to replace a named executive officer of such Party, such Party shall first consult in good faith with the other Party prior to, and with respect to, the hiring of such terminationindividual;
(xvii) recognize any labor union, cancellation works council, or lapseother labor organization or employee representative as the representative of any of the employees of the Party or its Subsidiaries, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or selfbecome a party to, establish, adopt, amend, commence negotiations for or terminate any collective bargaining agreement or other labor-insurance programsrelated Contract with a labor union, works council, or other labor organization or employee representative, in each case, providing coverage equal other than as required by applicable Law;
(xviii) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security) or greater than guarantee any such Indebtedness, except for (A) Indebtedness for borrowed money incurred in the coverage Ordinary Course under the terminated, canceled Crown’s or lapsed policies for substantially similar premiumsKing’s, as applicable, are revolving credit facilities and other lines of credit existing as of the date of this Agreement, (B) guarantees by Crown or any direct or indirect wholly owned Subsidiary of Crown of Indebtedness of Crown or any other direct or indirect wholly owned Subsidiary of Crown, (C) guarantees by King or any direct or indirect wholly owned Subsidiary of King of Indebtedness of King or any other direct or indirect wholly owned Subsidiary of King, (D) Indebtedness incurred in full force connection with a refinancing or replacement of existing Indebtedness (but in all cases which refinancing or replacement shall not increase the aggregate amount of Indebtedness permitted to be outstanding thereunder and effectin each case on customary commercial terms consistent in all material respects with the Indebtedness being refinanced or replaced), (E) Indebtedness incurred pursuant to letters of credit, performance bonds or other similar arrangements in the Ordinary Course, (F) interest, exchange rate and commodity swaps, options, futures, forward contracts and similar derivatives or other hedging Contracts (1) not entered for speculative purposes and (2) entered into in the Ordinary Course and in compliance with its risk management and hedging policies or practices in effect on the date of this Agreement, or (G) Indebtedness incurred among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xxivxix) not exercise convene any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan special meeting (or otherwise issue any Rights (adjournment or postponement thereof) of each Party’s respective stockholders other than the Crown Stockholders Meeting or King Stockholders Meeting, as defined in the Company’s current articles of association) or similar interests or rights)applicable; or
(xxvxx) agree, authorize agree or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date Nothing contained in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property ithis Agreement s
Appears in 2 contracts
Sources: Merger Agreement (C&J Energy Services, Inc.), Merger Agreement (Keane Group, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by From the date of this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the and termination of this Agreement in accordance with its terms (terms, the Company covenants and agrees as to itself and each of its Subsidiaries that it will use its commercially reasonable efforts, from the date of this Agreement until the Effective Time, unless Buyer Parent shall otherwise approve in writing, such approval not to cause the business of it and its Subsidiaries to be unreasonably withheldconducted, delayed or conditioned)in all material respects, the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shalland its Subsidiaries shall use their respective commercially reasonable efforts to (a) preserve their business organizations, assets and shall cause lines of business intact, (b) maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations that are material to the Company and its Subsidiaries, taken as a whole, (c) maintain all leases and all personal property (reasonable wear and tear excepted) that are material to use their respective reasonable best efforts the Company and its Subsidiaries, taken as a whole, used by the Company and its Subsidiaries and necessary to preserve their material conduct its business organizations intact in the ordinary course of business consistent with past practice (but with no obligation to renew or extend any lease or to otherwise exercise any rights or options it may have under any lease, including but not limited to rights to purchase or increase or decrease its current properties) and (d) maintain in all material respects its and their existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associatesagents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or and the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (CB) Buyer as Parent may approve consent in writing (such approval which consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (C) as required by applicable Laws or definitive interpretations thereof or by any Governmental Entity, or (D) as set forth in Section 6.1 4.1 of the Company Disclosure Letter, the Company will not not, and will cause not permit any of its Subsidiaries not Subsidiaries, to:
(i) amend adopt any amendments to its charter or otherwise changebylaws or, or authorize or propose to amend or otherwise change its articles in the case of associationany Subsidiary that is not a corporation, certificate of incorporation, bylaws or other similar applicable governing organizational documents;
(ii) merge(A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or other reorganization (other than this Agreement), (B) acquire by merging or consolidating with, or by purchasing an equity interest in or portion of the assets of (other than as set forth in Section 4.1(iii)), or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, (C) take or omit to take any action that would cause any rights under Material Intellectual Property, including with respect to any registrations or applications for registration, to lapse, be abandoned or cancelled, or fall into the public domain, other than actions or omissions in the ordinary course of business consistent with past practice and not otherwise in violation of this Section 4.1, or (D) enter into any scheme of arrangement a joint venture or bid conduct agreement partnership or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiariesthird-party business enterprise;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or any assets or otherwise) capital stock from any corporationother Person, partnership or other than acquisitions of assets in the ordinary course of business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementconsistent with past practice;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting exercise of Company RSUs Options and the settlement of RSU Awards and PSU Awards (and dividend equivalents thereon, if applicable) outstanding prior to on the date hereof, of this Agreement or (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as shares of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common capital stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company or (C) the issuance, sale, pledge, disposition of, grant, transfer, encumbrance, or authorization of the issuance, sale, pledge, disposition, grant, transfer or encumbrance of capital stock of any Subsidiary of the Company in connection with financing arrangements not restricted under this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(v) other than trade credit or otherwise in an amount not to exceed $5,000,000 in the aggregate, in each case, in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) business, make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practicePerson;
(vi) (A) declare, set aside, make aside or pay any dividend or other distribution, whether payable in cash, stock, property stock or otherwiseother property, with respect to any of its shares or other equity interests (capital stock, except for cash dividends paid by any wholly owned direct or indirect wholly owned Subsidiary of the Company to the Company or to any other wholly owned direct or indirect wholly owned Subsidiary in of the ordinary course of business consistent with past practiceCompany, (B) split, combine or enter into reclassify the Shares or any agreement with respect to the voting of its other outstanding capital stock of the Company or issue or authorize the issuance of any other equity interests;
securities in respect of, in lieu of or in substitution therefor, (viiC) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of its capital stockthe Company, except for acquisitions, or deemed acquisitions, of Shares or other equity securities of the Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with (1) the vesting satisfaction of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except Tax withholding obligations with respect to obligations Company Options, RSU Awards or PSU Awards outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Options outstanding on the date of this Agreement with Shares (including in connection with “net exercises”) and (3) forfeitures of Company Options, RSU Awards or PSU Awards outstanding on the date of this Agreement, in the case of each of (1), (2) and (3), pursuant to their terms as in effect on the date of this Agreement, and except for acquisitions or deemed acquisitions of Shares or other equity securities of the Company or any of its wholly owned Subsidiaries by the Company or any of its wholly owned Subsidiaries, or (D) enter into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of the Company’s capital stock or other Rights of the Company or any of its Subsidiaries; provided that nothing contained herein shall prohibit dividends and distributions paid or made on a pro rata basis by direct or indirect Subsidiaries of the Company in the ordinary course consistent with past practice;
(vii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for any Indebtedness or otherwise modify the terms of business and in a manner that would not have any material Tax consequences)Indebtedness, or issue or sell any debt securities or warrants or other rights to acquire any debt security than Indebtedness incurred under existing revolving credit facilities of the Company or any for working capital purposes in the ordinary course of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness business in an amount not to exceed an $150,000,000 in the aggregate principal amount (provided that Parent’s prior written consent shall be required in respect of $15 million;
(ix) shall not authorize or make any capital expenditures incremental incurrence of Indebtedness thereunder in excess of $40 million in the aggregate, except for 5,000,000). “Indebtedness” of any Person means (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or all indebtedness for borrowed money, (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or other indebtedness which is evidenced by a Governmental Entity;
note, bond, indenture, debenture or similar Contract, (xiC) except with respect all capitalized lease obligations of such Person or obligations of such Person to any litigationpay the deferred and unpaid purchase price of property and equipment, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries trade payables incurred in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal all obligations of any lease of real property that has expired by its terms such Person pursuant to securitization or the termination of a lease of real property that is not a Material Lease and factoring programs or arrangements, (E) transfers among all guarantees and arrangements having the Company economic effect of a guarantee of such Person of any other Indebtedness of any other Person, (F) net cash payment obligations of such Person under swaps, options, derivatives and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs other hedging agreements or arrangements in effect that will be payable upon termination thereof (assuming they were terminated on the date hereofof determination), (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2G) in the case reimbursement obligations under (i) letters of employees who are executive officers credit, bank guarantees and other similar contractual obligations entered into by or on behalf of the Companysuch Person or (ii) surety, increases in base salary in connection with the Company’s usual and customary annual review in 2019customs, so long as any such increases are consistent with past practice, (C) except as required by Law reclamation or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (performance bonds other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter those entered into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (QXO, Inc.), Merger Agreement (QXO, Inc.)
Interim Operations. (a) Except From the date hereof and until the earliest of the Acceleration Time and the termination of this Agreement, except (w) as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 7.1(a) of the Company Disclosure Letter, (x) as otherwise expressly contemplated or expressly permitted or required by this Agreement, (y) to the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement extent consented to in accordance with its terms writing by Parent (unless Buyer which consent shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)) or (z) as required by applicable Law, the Company shall, and shall cause its Subsidiaries to, conduct their cause the business of it and its Subsidiaries to be conducted in the ordinary course consistent with past practice course, and in compliance with all applicable Laws and, to the extent consistent therewith, it shallCompany shall use reasonable best efforts to, and shall cause each of its Subsidiaries, Subsidiaries to use their respective reasonable best efforts to to, preserve their material its business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting Notwithstanding the generality of the foregoing foregoing, and subject to the exceptions set forth in furtherance thereofclauses (w), (x), (y) and (z) of the immediately preceding sentence, the Company, from the date of this Agreement until the through earlier of the Effective Acceleration Time or and the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheldshall not, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will shall cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, the certificate of incorporation, bylaws or other applicable comparable governing documents;
(ii) merge, enter into any scheme documents of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(ivii) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, transfer or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of otherwise encumber any shares of capital stock stock, voting securities, partnership interest, membership interest or similar interest or any option, warrant, right or security convertible, exchangeable or exercisable therefor or other instrument or right the value of which is based on any of the foregoing of the Company (including Ordinary Shares) or any of its Subsidiaries or (including any Company Securities or Other Subsidiary Securities Equity Awards) (collectively, “Equity Interests”), other than (A) the issuance of Ordinary Shares upon pursuant to Company Stock Options outstanding on date hereof under the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to Plans in accordance with the date hereofterms thereof, (B) issuances of Shares in connection with the matching of contributions under the (1) Dynegy Midwest Generation, Inc. 401(k) Savings Plan for Employees Covered under a Collective Bargaining Agreement (As Amended and Restated Effective January 1, 2009); (2) Dynegy Midwest Generation, Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); (3) Dynegy Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); and (4) Dynegy Northeast Generation, Inc. Savings Incentive Plan (As Amended and Restated Effective January 1, 2009), in each case in accordance with the terms thereof, (C) the issuance of Ordinary the Top-Up Option Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof Top-Up Option and only (D) issuances of Equity Interests in accordance with such Company ESPP as the Rights Agreement;
(iii) split, combine, subdivide or reclassify any of its Equity Interests;
(iv) declare, set aside, establish a record date for, or pay any dividends on or make any other distributions (whether payable in effect as of the date hereof (for the avoidance of doubtcash, the Company shall not allow the commencement stock, property or a combination thereof) in respect of any new offering periods under the Company ESPP)of its Equity Interests, other than any dividends (CA) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a from any wholly owned Subsidiary of the Company to the Company or to another wholly owned such Subsidiary of the Company and (B) any dividends or distributions issued in accordance with the Rights Agreement;
(v) repurchase, redeem or otherwise acquire any of its Equity Interests, except for (A) mandatory sinking fund obligations existing on the date hereof and disclosed in Section 7.1(a)(v) of the Company Disclosure Letter, (B) redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options, employee severance, retention, termination, change of control and other contractual rights existing on the date of this Agreement on the terms in effect on the date of this Agreement, including with respect to Company Restricted Stock and (C) acquisition or exchange of Rights in accordance with Rights Agreement;
(vi) incur, issue, or modify in any material respect the terms of, any Indebtedness, or assume, prepay, defease, cancel, acquire, guarantee or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the Indebtedness of any Person, except for (A) advances of credit incurred under the Company’s existing credit facilities in an aggregate amount not to exceed $2,500,000, (B) letters of credit issued under the Credit Agreement (x) in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments consistent with past practices for non-trading activities but in any Person event in an aggregate amount not to exceed $25,000,000 or (other than y) in connection with the sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Company’s assets in the ordinary course of business consistent with past practices, (C) letters of credit issued under the Credit Agreement to support positions in place as of the date hereof, or (D) Indebtedness owed by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other wholly owned Subsidiary of the Company;
(vii) grant or incur any Lien, other than (A) Permitted Liens, (B) Liens for current Taxes, assessments or other charges of a Governmental Entity not yet due and payable or which is being contested in good faith through appropriate proceedings, (C) pledges or deposits by the Company or any of its Subsidiaries in the ordinary course of business and under workmen’s compensation Laws, unemployment insurance Laws or similar legislation, (D) good faith deposits in a manner that would not have any material Tax consequences) connection with Contracts (other than extending trade credit for the payment of Indebtedness) or leases to customers and advancing business expenses to employeeswhich the Company or one of its Subsidiaries is a party, in each case, in the ordinary course of business consistent with past practice;
, (viE) declare, set aside, make deposits to secure public or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to statutory obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any one of its Subsidiaries, except or to secure surety or appeal bonds to which such entity is a party, or deposits as security for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof andcontested Taxes, in each case, such settlement case incurred or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice, (F) licenses granted to third parties in the ordinary course of business consistent with past practice by the Company or accelerate its Subsidiaries, (G) Liens required under the vesting outstanding Indebtedness of the Company and its Subsidiaries as of the date hereof, (H) Liens granted in connection with any Indebtedness permitted under Section 7.1(a)(vi), and (I) Liens granted or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required incurred in connection with the termination sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Company’s assets in the ordinary course of business consistent with past practices or to support positions in place as of the Arris Group, Inc. Pension Plan as contemplated date of this Agreement;
(viii) (A) except (1) to the extent required by applicable Law or (2) to the extent required by written agreements existing on the date hereof of this Agreement, grant or announce any stock option, equity or incentive awards or increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or other independent contractors who provide services in an individual capacity of the Company or any of its Subsidiaries, (yB) pursuant except to the terms thereof as in effect extent required by written agreements existing on the date hereof)of this Agreement, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Company Plan to any employee, officer, director or other independent contractor who provide services in an individual capacity of the Company or any of its Subsidiaries, whether past or present, or take any action to accelerate vesting of any right to compensation or benefits, (C) except to the extent required by written agreements existing on the date of this Agreement, enter into or amend any Contracts of employment or any consulting, bonus, severance, retention, retirement or similar agreement, (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP, (E) change the accrual rate for the Company’s short-term incentive plans used to prepare the Company’s financial statements, (F) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries, or (EG) except as required to ensure that any Company Plan is not then out of compliance with applicable Law, enter into or adopt any new or renew, amend or terminate any existing Company Plan or benefit arrangement if such adoption, renewal, amendment or termination would result in a material cost to the Company or any of its Subsidiaries;
(ix) hire any employee or individual independent contractor with total expected annual base salary, including commissions, in excess of $100,000, other than to fill vacancies arising in the ordinary course of business at annual base salary levels not in excess of 120% of prevailing market rates, or, without consulting with Parent in advance, terminating any such employee or independent contractor;
(x) other than in the ordinary course of business and consistent with past practice, (A) make or change any material Tax election, or change the Company’s or such Subsidiary of the Company’s method of accounting for Tax purposes, (B) file any amended Tax Return involving a material amount of additional Taxes, (C) settle or compromise any material Tax liability, or any claim for a material refund of Taxes or enter into any closing agreement with respect to any material amount of Tax, or (D) agree to an extension or waiver of the statute of limitations applicable to the assessment or collection of any material Taxes except, in each case, as required by applicable Law;
(xi) except as required by GAAP, the SEC or applicable Law, establish, adopt, change any material accounting policies or principles;
(xii) except in the ordinary course of business (A) enter into or assume any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof, (B) terminate, materially amend or waive any collective bargaining agreementmaterial rights under any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract or (C) or waive any material default under, labor unionor release, plan, trust, fund, policy settle or arrangement for compromise any material claim against the benefit of Company or liability or obligation owing to the Company under any current or former directors, consultants, officers or employees Company Material Contract; provided in each case that the Company or any of their beneficiaries; provided, however, that notwithstanding anything its Subsidiaries shall be permitted to the contrary in the foregoing clauses (A)-(E), the renew or replace any Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (Material Contract with one or equity) or other equity-based or equity-related awards or other more Contracts on substantially similar arrangementsterms;
(xvxiii) grant subject to Section 7.16, waive, release, settle or compromise any pending or threatened action, litigation, claim or arbitration or other proceedings before a license of any material Intellectual Property owned Governmental Entity if such waiver, release, settlement or compromise by the Company or any of its Subsidiaries (A) is for an amount in excess of $2,500,000 individually or $5,000,000 in the aggregate, or (B) would entail the incurrence of (1) any obligation or liability of the Company in excess of such amount, including costs or revenue reductions or (2) obligations that would impose any material restrictions on the business or operations of the Company or its Subsidiaries;
(xiv) acquire (including by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets thereof, excluding acquisitions of supplies, parts, fuel, materials and other than inventory in the ordinary course of business consistent with past practice, or make any loan, advance or capital contribution to, or investment in, any Person or any division thereof, other than (A) any such acquisitions, loans, advances, contributions or investments that are for consideration not in excess of $1,000,000 individually or $5,000,000 for all such transactions by the Company and its Subsidiaries in the aggregate or (B) loans, advances or capital contributions to or among the Company and wholly owned Subsidiaries of the Company;
(xvixv) sell, transfer, lease, license, assign, allow any to lapse or abandonment otherwise dispose of any material Intellectual Property(including, by merger, consolidation, or sale of stock or assets) any registration entity, business, assets, rights or grant thereof, or any application related thereto to which, or under which, properties of the Company or any Subsidiary has any ownership interestof its Subsidiaries having a current value in excess of $1,000,000 individually, excluding any or $5,000,000 for all such lapse or abandonment made transactions by the Company or any Subsidiary thereof and its Subsidiaries in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (aggregate other than any (A) sales, transfers, leases, licenses assignments and other dispositions of its Subsidiaries inventory, electricity or other commodities or Derivative Products in the ordinary course of business and consistent with past practice, (B) dispositions of obsolete or worthless assets or properties in a manner that would not have any material Tax consequencesthe ordinary course of business consistent with past practice or (C) or named executive officer (as defined in 17 CFR 229.402) of transactions solely among the Company and/or any of its Subsidiaries;
(xvi) authorize or make any immediate family member or Affiliate of capital expenditure, other than (A) any capital expenditures contemplated by the foregoingCompany’s current business plan, (B) providing for payments by or to capital expenditures that are not, in the Company or any Subsidiary thereof aggregate, in excess of $120,000, other than 5,000,000 above the agreements expressly contemplated capital expenditures provided for in such business plan or (C) capital expenditures required by this AgreementLaw or in response to a casualty loss or property damage;
(xviiixvii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew adopt or enter into any non-compete a plan of complete or exclusivity agreement that would restrict partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or limit, in any material respect, the operations other reorganization of the Company or any of its Subsidiaries;
(axviii) merge or consolidate the Company or any of its Subsidiaries with and into any other than new Person;
(xix) enter into, with respect or related to Dynegy ▇▇▇▇ Landing, LLC, Dynegy Morro Bay, LLC, Dynegy Oakland, LLC and Casco Bay Energy Company, LLC, any Contracts with customers or suppliers a term extending beyond December 31, 2013;
(xx) fail to maintain in full force and effect material insurance policies covering the ordinary course of business consistent with past practiceCompany and its Subsidiaries and their respective properties, enter into any Contract that would have been assets and businesses in a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business form and amount consistent with past practice unless the Company determines in its reasonable commercial judgment that the form or expirations amount of such insurance should be modified;
(xxi) permit any letters of credit to be issued other than letters of credit issued under the Credit Agreement by JPMorgan Chase Bank, N.A., Citibank, N.A, Credit Suisse, Cayman Islands Branch and ABN AMRO BANK N.V.;
(xxii) subject to Section 7.2, take any action which would reasonably be expected to result in any of the Tender Offer Conditions or the conditions to the Merger set forth in Article VIII not being satisfied or delaying the satisfaction of any such Contract in the ordinary course of business consistent with past practice in accordance conditions, or that would reasonably be expected to prevent, delay, impair or interfere with the terms ability of such ContractParent to consummate the Offer or of Parent, amend, modify, supplement, waive, terminate, assign, convey, subject Merger Sub or the Company to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;consummate the Merger; or
(xxiii) other than renewals in the ordinary course of businesscommit, amend, modify, terminate, cancel authorize or let lapse a material insurance policy (or reinsurance policy) or self-insurance program agree to take any of the Company foregoing actions or its Subsidiaries in effect as enter into any letter of the date hereof, unless simultaneous with such termination, cancellation intent (binding or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of associationnon binding) or similar interests agreement or rights); or
(xxv) agree, authorize or commit arrangement with respect to do any of the foregoingforegoing actions.
(b) Neither Buyer Parent nor Company Merger Sub shall knowingly take or permit any of their Subsidiaries Affiliates to take any action that is reasonably likely to prevent or materially interfere with delay the consummation of the Offer or the Merger. Prior to making any written communications to the officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are directly affected by the transactions contemplated by this Agreement, the Company shall, to the extent legally permissible, provide Parent with a copy of the intended communication, Parent shall review and comment on the communication promptly (but in any event, Parent shall provide any comments it may have within forty-eight (48) hours after such communication has been provided to Parent for review), and the Company shall consider in good faith any comments reasonably proposed by Parent.
(c) The Company shall use its reasonable efforts Nothing contained in this Agreement is intended to cause give Parent or Merger Sub, directly or indirectly, the right to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth control or direct the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended or its Subsidiaries’ operations prior to the earlier of the Offer Closing Date)and the Effective Time, certifying that each such Subsidiary does not own any U.S. real property iand nothing contained in this
Appears in 2 contracts
Sources: Merger Agreement (Icahn Enterprises L.P.), Merger Agreement (Dynegy Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 6.01 of the Company Disclosure Letter, required by Law or consented to in writing in advance by Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the Company covenants and agrees that, after period from the date hereof and until the earlier of the Effective Time or and the valid termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not pursuant to be unreasonably withheld, delayed or conditioned)Section 9.01, the Company shall, and shall cause each of its Subsidiaries to, conduct their (x) carry on its business only in the ordinary course consistent with past practice and in compliance with all applicable Laws andof business, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to (y) use their respective commercially reasonable best efforts to preserve their material intact its current business organizations intact organization and maintain in all material respects existing relations to preserve its relationships and goodwill with Governmental Entities, customers, suppliers, employees employees, licensors, licensees, distributors, lessors and others having significant business associatesdealings with the Company or any of its Subsidiaries and (z) comply with applicable Law in all material respects. Without limiting the generality of the foregoing and foregoing, except as set forth in furtherance thereofSection 6.01 of the Company Disclosure Letter, required by Law or consented to in writing in advance by Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement hereof until the earlier of the Effective Time or and the valid termination of this Agreement pursuant to Section 9.01, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly:
(i) declare, set aside or pay any dividends on, or make any other distributions (whether in accordance with cash, stock or property) in respect of, any Company Securities or Company Subsidiary Securities or set any record date therefor, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its termsparent (provided that neither the Company nor any of its Subsidiaries shall repatriate any material amount of cash as a dividend from any Subsidiary outside of the United States to the Company or any of its U.S. Subsidiaries);
(ii) split, except as combine, reclassify or otherwise amend the terms of any Company Securities or Company Subsidiary Securities or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of Company Securities;
(iii) repurchase, redeem or otherwise acquire any Company Securities or Company Subsidiary Securities or any options, warrants or other rights to acquire any such Company Securities or Company Subsidiary Securities, other than (A) required by applicable Law or as contemplated the acquisition by the Scheme Document AnnexCompany of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay all or a portion of the exercise price of the Company Stock Options, (B) otherwise expressly required by this Agreementthe withholding of shares of Company Common Stock to satisfy all or a portion of any Tax obligations with respect to Company Equity Awards, and (C) Buyer may approve the acquisition by the Company of Company Equity Awards in writing connection with the forfeiture of such awards;
(iv) issue, deliver or sell any shares of Company Securities or Company Subsidiary Securities or other voting securities or equity interests, any securities convertible or exchangeable into any such approval not shares, voting securities or equity interests, any options, warrants or other rights to be unreasonably withheldacquire any such shares, delayed voting securities, equity interests or conditionedconvertible or exchangeable securities, any stock-based performance units, any Voting Company Debt or any other rights that give any person the right to receive any economic interest of a nature accruing to the holders of Company Common Stock, other than, in each case, (A) upon the exercise or settlement of Company Equity Awards outstanding on the date hereof or issuances pursuant to the ESPP, in each case in accordance with their terms as of the date hereof, (DB) by a wholly owned Subsidiary of the Company of such Subsidiary’s capital stock to the Company or another wholly owned Subsidiary of the Company and (C) as set forth described in Section 6.1 6.01(a)(iv) of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(iiv) mergemortgage, pledge, hypothecate, grant an easement with respect to, or otherwise encumber or restrict the use of Company Securities or Company Subsidiary Securities or assets, properties or rights (including Intellectual Property rights) of the Company or any of its Subsidiaries, or otherwise create, assume or suffer to exist any Liens thereupon except Permitted Liens and Liens granted as of the date of this Agreement with respect to the Company’s Existing Credit Facility;
(vi) amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vii) acquire or agree to acquire from any third person (A) by merging or consolidating with, purchasing an equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any person or business, or (B) any assets that are otherwise material to the Company and its Subsidiaries, other than (x) inventory, supplies or raw materials acquired in the ordinary course of business, (y) equipment and other assets acquired as contemplated under the Fixed Asset Plan as permitted pursuant to Section 6.01(a)(xi) below, and (z) any other assets for which the consideration payable by the Company or any of its Subsidiaries does not exceed $1,000,000 in the aggregate for all such assets;
(A) sell, lease, license, sub-license or otherwise dispose of, or otherwise encumber any of its properties, rights or assets (including Intellectual Property rights), other than (1) sales of inventory, licenses of Software or sales of professional services in the Ordinary Course of Business, (2) sales, relinquishment or other disposition of assets that are obsolete or that are no longer used in, or useful for, the conduct of the business of the Company and its Subsidiaries, in each case, in the Ordinary Course of Business, (3) sales, licenses, sublicenses or other dispositions in the Ordinary Course of Business permitted under Contracts existing as of the date of this Agreement, or (4) sales of assets with a value of less than $500,000 individually or in a series of related transactions, or $1,000,000 in the aggregate; or (B) abandon or permit to lapse any Company Registered IP; provided, however, that in any of the foregoing cases described in clause (A) or (B), neither the Company nor any of its Subsidiaries will distribute or make available (including by contribution to an open source project or community) any Software developed by the Company or any of its Subsidiaries as Open Source Materials without first obtaining Parent’s prior written consent;
(ix) adopt or enter into any scheme plan of arrangement complete or bid conduct agreement partial liquidation, dissolution, restructuring, recapitalization or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate reorganization of the Company or any of its Subsidiaries;
(iiix) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) incur, create, assume or otherwise become liable for, any Indebtedness (excluding letters of credit put in place, and capital leases entered into, in each case, in the issuance Ordinary Course of Ordinary Shares upon the vesting Business) owed to any third person, or amend, modify or refinance any Indebtedness owed to any third person (excluding with respect to letters of Company RSUs (credit and dividend equivalents thereon, if applicable) outstanding prior to capital leases in existence as of the date hereofof this Agreement in the Ordinary Course of Business), (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to to, or investments in in, any Person (other person, other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries (other than advances of expenses and other routine amounts to employees in the Ordinary Course of Business) or (C) redeem, repurchase, prepay, defease, cancel or otherwise acquire any Indebtedness (other Indebtedness than letters of credit and capital leases in an amount not to exceed an aggregate principal amount the Ordinary Course of $15 millionBusiness);
(ixxi) shall not authorize purchase, or make any commit to purchase, fixed or other capital expenditures assets except as contemplated by and in excess of $40 million in accordance with the aggregate, except for (A) expenditures set forth in the current capital forecast FY18 Fixed Asset Plan set forth in Section 6.1(a)(ix6.01(a)(xi) of the Company Disclosure Letter or (B) expenditures made in response to any emergencythe “Fixed Asset Plan”), whether caused which Fixed Asset Plan was approved as part of the Company’s FY2018 AOP by warthe Company Board on February 16, terrorism, weather events, public health events, outages, operational incidents or otherwise2017;
(xxii) make any material changes with respect to any method of Tax or financial accounting policies or procedurespay, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17discharge, settle or compromise satisfy any litigationmaterial claims, auditliabilities or obligations (whether absolute, claimaccrued, action asserted or other Proceedings against the Company unasserted, contingent or any of its Subsidiaries otherwise), other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement payment, discharge or compromise does not exceed $25 million individually or $100 million satisfaction in the aggregate (including for such purpose a reasonable estimate Ordinary Course of anticipated royalties Business, or similar obligations) as required by their terms as in effect on the date hereof of claims, liabilities or (B) the amount paid in settlement does not exceed the amount obligations reflected or reserved against such matter in the most recent audited financial statements (or the notes thereto) of the Company included in the Company Reports filed prior Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the Ordinary Course of Business, (B) payment of severance or other termination benefits to employees in the Ordinary Course of Business to the extent otherwise permitted pursuant to Section 6.01(a)(xix), (C) payment of fees and expenses to Representatives of the Company incurred in connection with the transactions contemplated by this Agreement; or (D) compromises, settlements or agreements to settle any Action which would not require Parent consent pursuant to Section 6.01(a)(xiii);
(xiii) commence any Action (other than any Action against Parent and Merger Sub with respect to the enforcement of this Agreement), or compromise, settle or agree to settle any Action made or pending by, or against, the Company or any of its Subsidiaries, other than the commencement or settlement of Actions in the Ordinary Course of Business that are unrelated to Intellectual Property Rights and involve only the payment by or to the Company or any of its Subsidiaries of money damages (net of insurance proceeds received) in an amount of no more than $1,000,000 individually or $5,000,000 in the aggregate; provided that the foregoing shall not permit the Company or any of its Subsidiaries to settle any Action (x) that would impose any restrictions or changes (other than de minimis restrictions or changes) to the business or operations of, or result in the imposition of equitable relief on, or require any admission of wrongdoing by, the Company or any of its Subsidiaries, or (y) for which such settlement is not permitted pursuant to Section 7.02;
(xiv) (A) enter into, terminate (except a termination of any Material Contract by its terms due solely to the passage of time), cancel, amend in any material respect or modify in any material respect any Material Contract or enter into any Contract that, if in effect on the date hereof andhereof, would have been a Material Contract, excluding, in each caseof the foregoing cases but subject to the following proviso, any such settlement Contract which (1) is or compromise would constitute a Material Contract under subsections (ii), (iii), (iv) or (xii) of Section 4.11(a), (2) is a renewal of a Contract made available to Parent on terms no less favorable in all material respects in the aggregate to Company and its Subsidiaries than the terms of such Contract as made available to Parent, (3) is a customer Contract providing for the sale of Company Products, (4) is a distributor Contract providing for third-party distribution of Company Products or (5) is a supplier or vendor Contract providing for the supply of goods or services for use in the production of Company Products, so long as such supplier or vendor Contract does not include require and would not reasonably be expected to result in any criminal liability, material injunctive relief payments (whether made directly or obligation to be performed indirectly via a third person) by the Company or any of its Subsidiaries to any counterparty to such Contract (or any of such counterparty’s Affiliates) in an aggregate amount in excess of $3,000,000 per Contract or series of related Contracts or $15,000,000 in the aggregate, in each case, in any fiscal quarter of the Company, with the foregoing threshold amounts to be pro rated for the remaining period of the current fiscal quarter as of the date of this Agreement; provided that no Contract described in any of the foregoing clauses (1) through (5) shall be so excluded from the restrictions of this Section 6.01(a) if such Contract is (or, if entered into prior to the date hereof, would have been) a Material Contract pursuant to subsection (v), (vi), (viii) or (ix) of Section 4.11(a); and provided, further that no Contract described in the foregoing clause (5) shall be so excluded from the restrictions of this Section 6.01(a) if such Contract contains any purchasing commitment by the Company or any of its Subsidiaries for a term in excess of six (6) months from the date thereof; (B) waive any material term of or any material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries or any material liability or material obligation owing to the Company or any of its Subsidiaries under, any Material Contract (except, in each case, as permitted pursuant to Section 6.01(a)(xiii)); (C) enter into any Contract which contains a change of control or similar provision that would require a payment to the other than party or parties thereto in connection with the payment of money damagesOffer, the Merger, the Support Agreement or the other transactions contemplated herein (including in combination with any other event or circumstance); or (D) amend or modify the Financial Advisor Agreement;
(xiixv) change its fiscal year or change any of its financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law, or (other than as required by GAAP for any assets that are required to be marked-to-market on a periodic basis) revalue any of its material assets;
(xvi) (A) change any material method of Tax accounting or make, change or revoke any material Tax election, (B) file any material amended Tax Return or claim for Tax refund, (C) settle or compromise any material Tax liability or refund, (D) extend the statutory period of limitations with respect to the assessment or collection of any material Tax, (E) change any tax period, (F) prepare or file any material Tax Return other than on a basis consistent with past practice (except as otherwise required by a change in applicable Tax Law), or (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 any Tax allocation, indemnification or sharing agreement (excluding any commercial agreements entered into in the ordinary course of business and not primarily relating to Taxes) or request any Tax ruling or Tax holiday;
(xvii) fail to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle keep in force insurance policies or compromise any material amount of Tax Liability, enter into any closing agreement replacement or revised provisions regarding insurance coverage with respect to any the material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales operations and non-exclusive licenses of products and services activities of the Company and its Subsidiaries as currently in effect;
(xviii) enter into any new lease of real property involving payments of more than $200,000 in the ordinary course of businessaggregate per year, (B) any abandonment of Intellectual Property that or amend the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal terms of any existing lease of real property that has expired by its terms or would require payments over the termination remaining term of a such lease in excess of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries $200,000 per year, other than renewals of existing leases in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (Cxix) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend terms of any Company Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c6.01(a)(xix) of the Company Disclosure Letter Letter, (as such schedule may be reasonably amended prior A) increase the compensation or benefits payable or to become payable to any of its directors, officers, employees or individual independent contractors (except for annual merit increases in base salary of employees who are not officers in the Closing DateOrdinary Course of Business by no more than 10% per individual and not to exceed 4.0% in the aggregate), certifying (B) grant to any of its directors, officers, employees or individual independent contractors any increase in severance or termination pay, (C) pay or award, or commit to pay or award, any bonuses or incentive compensation, (D) enter into any employment, consulting, severance, retention or termination agreement (including, for the avoidance of doubt, offer letters) with any of its directors, officers, employees or individual independent contractors, other than offer letters that each such Subsidiary does do not own provide any U.S. real property iseverance, retention, change in control or equity award commitments with new non-executive employee hires, and new contractor or consultant engagements, that are permitted under clause (H) or clause (I) hereof or in connection with any promotions of existing employees in the Ordinary Course
Appears in 2 contracts
Sources: Merger Agreement (Nimble Storage Inc), Merger Agreement (Hewlett Packard Enterprise Co)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees that, after that during the period from the date hereof of this Agreement and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (pursuant to Section 6.1 or the Closing, unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shalland Two-Thirds in Interest of the Purchasers otherwise prior thereto agree, each of the Company and its subsidiaries shall cause conduct its Subsidiaries to, conduct their business in the ordinary course consistent with past practice in the three markets, two pilot programs and facility update programs listed on Schedule 4.14 or in compliance with all applicable Laws and, furtherance of the Business Plan as it relates to the extent consistent therewith, it shall, period prior to commencement of revenue operations thereunder and shall cause its Subsidiariesnot, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain except either as contemplated by this Agreement or in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality furtherance of the foregoing and in furtherance thereofBusiness Strategy Plan, from the date of this Agreement until the earlier do any of the Effective Time following: (i) except for any payments required to obtain consents required to be obtained pursuant to this Agreement, incur, assume or guarantee any liability or pay, discharge or satisfy any liability other than in the ordinary course of business; (ii) create or assume any Lien other than in the ordinary course of business; (iii) waive, release, cancel, settle or compromise any debt, claim or right of any material value; (iv) transfer or waive any material right under any material lease, license or agreement or any material Company Intellectual Property; (v) pay or agree to pay any bonus, extra compensation, pension, continuation, severance or termination pay, or otherwise increase the wage, salary, pension, continuation, severance or termination pay or other compensation (of this Agreement in accordance with any nature) to its termsdirectors, officers or employees, except as (A) required by applicable Law law, other than for normal compensation increases and promotions for employees (other than for executive officers) in the ordinary course of business, as provided in the Company's plans and agreements identified in the Disclosure Schedule or as contemplated by are not material in the Scheme Document Annex, aggregate; (Bvi) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not make any loan to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or transaction with any of its Subsidiaries directors, officers or any Company Securities or Other Subsidiary Securities employees (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with any such Company ESPP person's status as in effect as an employee of the date hereof (for the avoidance Company) giving rise to any claim or right of, by, or against any person in an amount or having a value in excess of doubt$10,000 individually, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary except travel and entertainment advances in the ordinary course of business and in a manner that would not have consistent with Company policies; (vii) enter into, amend or terminate any material Tax consequences);
agreement or transaction; (vviii) make or forgive any loanscontribution to any Employee Plan, advances or capital contributions to or investments in any Person (other than regularly scheduled contributions and contributions required to maintain the funding levels of any direct Employee Plan, or indirect wholly owned Subsidiary make or incur any commitment to establish or increase the obligation of the Company or a subsidiary to any Employee Plan; (ix) create, assume or incur any indebtedness for money borrowed, or guaranties thereof, except for trade accounts payable incurred in the ordinary course of business and or borrowings under the Company's working capital line of credit facility as in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in effect on the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)date hereof, or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security securities of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
subsidiaries; (x) make issue, deliver or sell, or authorize or propose the issuance, delivery or sale of, any material changes with respect to shares of capital stock of any method of Tax class, any securities convertible into or financial accounting policies or proceduresexercisable for, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (whichrights, for the avoidance of doubtwarrants or options to acquire, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17any such shares, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, subsidiaries except for (A) the grant of options to acquire not more than 100,000 shares in the case of aggregate to new employees who are not or promoted employees (other than executive officers of the Company, officers) in the ordinary course of business consistent with past practice pursuant to its equity incentive plans or automatic grants of options and deferred stock pursuant to the director's equity incentive plan, in each case as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (yB) pursuant stock issued upon exercise of outstanding options and warrants; (xi) amend or modify any provision of the Business Strategy Plan; (xii) amend or modify any provision of its charter, by-laws or other governing documents, except for the proposed amendments to the terms thereof Company's by-laws set forth on Schedule 2.8; (xiii) make any capital expenditures for capital improvements or commitments therefor except as in effect committed on the date hereof), (D) change hereof and in any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary event limited in the foregoing clauses aggregate to $6,200,000; (A)-(E)xiv) expand the Company's network or operations beyond its three existing markets, the Company shall not, two pilot programs and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (facility update program or equity) or other equity-based or equity-related awards or other similar arrangements;
expand its marketing beyond its three existing markets; (xv) grant a license sell, assign or dispose of any material Intellectual Property owned by of the Company FCC Licenses listed on Exhibit 2.19 or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
right thereunder; or (xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment agree to or give rise to make any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries commitment to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated actions prohibited by this AgreementSection 4.14.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Preferred Stock Purchase Agreement (Qwest Communications International Inc), Preferred Stock Purchase Agreement (Advanced Radio Telecom Corp)
Interim Operations. Each of Grace and Fresenius AG (afor itself and on behalf of Fresenius AG) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees as to itself and its subsidiaries that, from and after the date hereof and until the earlier Effective Time, except insofar as the other parties shall otherwise consent or except as otherwise contemplated by this Agreement, the Contribution Agreement, the Distribution Agreement or its Disclosure Letter (provided that, as used herein, all references to Grace (and/or its Affiliates) shall be deemed to refer to Grace and its Affiliates which conduct the NMC Business, consistent with Section 9.8 hereof, except as otherwise specifically provided):
(a) To the extent reasonably practicable, taking into account any operational matters that may arise that are primarily attributable to the pendency of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)Reorganization, the Company shall, business of it and shall cause its Subsidiaries to, conduct their business subsidiaries will be conducted only in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws existing business plans previously disclosed to the other parties and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to subsidiaries will use their respective all reasonable best efforts to preserve their material business organizations organization intact and maintain in all material respects their existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as .
(Ab) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company It will not and will cause its Subsidiaries not to:
(i) sell or pledge or agree to sell or pledge any stock owned by it in any of its subsidiaries or, in the case of Fresenius AG, any FWD Business Subsidiary; (ii) amend its Certificate of Incorporation or otherwise changeBy-laws (or similar organizational document); (iii) split, combine or reclassify any outstanding capital stock; or (iv) declare, set aside or pay any dividend payable in stock or property with respect to any of its capital stock.
(c) Neither Grace, Fresenius USA, nor any of their respective subsidiaries or, Fresenius AG, solely with respect to any FWD Business Subsidiary, will issue, sell, pledge, dispose of or encumber, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of, or subjecting securities convertible or exchangeable for, or options, puts, warrants, calls, commitments or rights of any kind to any Lienacquire, disposition, grant or transfer of any shares of its capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (class other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares common shares issuable pursuant to the Company ESPPoptions, but only with respect to elections made prior to warrants and other convertible securities outstanding on the date hereof and only disclosed in accordance its Disclosure Letter, and employee stock options granted after the date hereof in the ordinary course of business.
(d) None of Grace, Fresenius USA or Fresenius AG, with such Company ESPP respect to the FWD Business, will (i) transfer, lease, license, guarantee, sell, mortgage, pledge or dispose of any property or assets encumber any property or assets other than in the ordinary and usual course of business; (ii) authorize or make capital expenditures; (iii) make any acquisition of, or investment in, assets, stock or other securities of any other person or entity other than its wholly owned subsidiaries or (iv) make any divestiture.
(e) Except as required by agreements or arrangements disclosed in effect its SEC Documents or its Disclosure Letter, neither it nor any of its subsidiaries or, in the case of Fresenius AG, any FWD Business Subsidiary, will grant any severance or termination pay to, or enter into, extend or amend any employment, consulting, severance or other compensation agreement with, any director, officer or other of its employees, except to other employees in the ordinary course in a manner consistent with past practice, which would bind Newco (or its subsidiary) after the Reorganization.
(f) Except as may be required to satisfy contractual obligations existing as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company and disclosed to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)parties hereto) and subject to Section 6.17the requirements of applicable law, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, and except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or neither it nor any of its Subsidiaries, exceptsubsidiaries or, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses toFresenius AG, any directorFWD Business Subsidiary, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, will establish, adopt, enter into into, make, amend or amend make any elections under any collective bargaining bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, employee stock ownership, deferred compensation, employment, termination, severance or other plan, agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees which would affect Newco (or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(Eits subsidiary), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant except in a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business manner consistent with past practice;.
(xvig) allow It will not implement any lapse change in its accounting principles, practices or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000methods, other than as may be required by German GAAP, in the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to case of Fresenius AG, or give rise to any rights (US GAAP, in the case of Grace and Fresenius USA, other than notice) to such other party as may be necessary or parties advisable in connection with the transactions contemplated by this Agreement;Distribution.
(xixh) institute Neither it nor any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew subsidiaries will authorize or enter into an agreement to take any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
actions referred to in paragraphs (a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or through (bg) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoingabove.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Agreement and Plan of Reorganization (Grace W R & Co /Ny/), Agreement and Plan of Reorganization (Fresenius Aktiengesellschaft)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the The Company Disclosure Letter, the Company covenants and agrees that, after during the period from the date hereof and until of this Agreement through the earlier of the Effective Time Closing or the termination of this Agreement in accordance with its terms Agreement, except (unless Buyer 1) to the extent Parent shall otherwise approve give its prior consent in writing, such approval writing (which consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (2) as set forth in Part 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly required by this Agreement, the Company shall, and shall cause its the Company Subsidiaries to, conduct their its business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill use commercially reasonable efforts to maintain and preserve intact its business organization and maintain satisfactory relationships with Governmental Entities, customers, suppliers, employees suppliers and distributors and other Persons with whom the Company or any Company Subsidiary has material business associatesrelations. Without limiting the generality of foregoing, during the foregoing and in furtherance thereof, period from the date of this Agreement until through the earlier of the Effective Time Closing or the termination of this Agreement in accordance with its termsAgreement, except (1) to the extent Parent shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(a) of the Company Disclosure Schedule, (A3) as may be required by applicable Law Legal Requirements or (4) as contemplated by the Scheme Document Annex, (B) otherwise expressly or required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Lettershall not (and shall not permit any Company Subsidiary to), the Company will not and will cause its Subsidiaries not toin each case by merger, consolidation, division, operation of law, or otherwise:
(i) amend the Company’s Organizational Documents or otherwise change, or authorize or propose to amend or otherwise change its articles the Organizational Documents of association, certificate of incorporation, bylaws or other applicable governing documentsany Company Subsidiary;
(ii) mergesplit, enter into any scheme combine, subdivide, change, exchange, amend the terms of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of reclassify any shares of the Company’s capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the or any Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)Subsidiary;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(viiii) declare, set aside, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property stock or otherwise, property) with respect to any shares of its shares the Company’s capital stock or the capital stock or other equity interests interest of any Company Subsidiary, other than (except for cash A) the Company’s regular quarterly dividend on the Company Common Stock to be declared and paid in the third quarter of the Company’s 2021 fiscal year, in a quarterly amount not to exceed the amount set forth in Part 4.1(a)(iii) of the Company Disclosure Schedule, provided, that if the initial End Date is extended pursuant to Section 6.1(b), the Company may resume its regular quarterly dividend (provided, that any such quarterly dividend may not be in an aggregate amount that exceeds the aggregate amount of the Company’s most recent quarterly dividend prior to the date hereof) on the Company Common Stock until the earlier of the Closing or termination of this Agreement, or (B) dividends or distributions only to the extent paid by any direct or indirect wholly owned Company Subsidiary to the Company or to any other direct or indirect another wholly owned Subsidiary of the Company;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person, (C) any business, or (D) any assets, except, (1) acquisitions by the Company from any wholly owned Subsidiary or among any wholly owned Subsidiaries of the Company; (2) the purchase of equipment, supplies and inventory in the ordinary course of business, (3) inbound licenses of Intellectual Property in the ordinary course of business or (4) acquisitions in one or more transactions with respect to which the aggregate consideration for all such transactions does not exceed $20,000,000 or (5) investments in any other Person in one or more transactions with respect to which the aggregate investment amount for all such transactions does not exceed $20,000,000;
(v) except in connection with any transaction between the Company and any wholly owned Subsidiary of the Company or among any wholly owned Subsidiaries of the Company, issue, sell, grant or otherwise permit to become outstanding any additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to acquire, any shares of its capital stock or other equity interests, other than: (A) shares of Company Common Stock issuable upon exercise of outstanding Company Options or the vesting of outstanding Company RSUs; and (B) pursuant to the Company ESPP in the ordinary course of business consistent with past practice and in accordance with the terms thereof and of this Agreement;
(vi) except in connection with any transaction between the Company and any wholly owned Subsidiary of the Company or among any wholly owned Subsidiaries of the Company, sell, assign, transfer, lease or license to any third party, or encumber, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any Company IP or material assets of the Company, other than: (A) sales of inventory, goods or services in the ordinary course of business or of obsolete equipment or assets in the ordinary course of business; (B) pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth in Part 4.1(a)(vi) of the Company Disclosure Schedule; (C) as security for any borrowings permitted by Section 4.1(a)(viii); (D) licenses granted to customers or other third parties in the ordinary course of business consistent with past practice; or (E) or enter into any agreement dispositions of assets which do not constitute Company IP, and with respect to which the voting fair market value of its capital stock or other equity interestsall such assets does not exceed $10,000,000 in the aggregate;
(vii) reclassifydirectly or indirectly repurchase, split, combine, subdivide or redeem, purchase redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock, Company Securities the Company’s or any Other Subsidiary Securities Company Subsidiary’s capital stock or equity interests, or any other securities or obligations convertible (other than currently or after the acquisition passage of time or the occurrence of certain events) into or exchangeable for any Ordinary Shares tendered by current shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, except: (A) shares of Company Common Stock repurchased from employees or consultants or former employees or directors in order consultants of the Company pursuant to pay the exercise of repurchase rights binding on the Company and existing prior to the date of this Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of options to purchase Company Common Stock pursuant to the Company Equity Plan or for withholding Taxes incurred in connection with the exercise, vesting or settlement of Company Options and Company RSUs), as applicable, in accordance with the terms of the applicable award;
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)A) incur, redeem, repurchase, prepay, defease, or cancel any indebtedness for borrowed money, guarantee any such indebtedness, issue or sell any debt securities or warrants or other rights to acquire any debt security securities (directly, contingently or otherwise) or make any loans or advances or capital contributions to any other Person, except for: (1) repayment of the 2021 Notes when due in accordance with their terms, including pursuant to the Company’s Rule 10b5-1 plan; (2) borrowings in an aggregate principal amount outstanding at any time not to exceed $25,000,000 incurred in the ordinary course of business pursuant to existing credit facilities or letters of credit, (3) any indebtedness among the Company and its wholly owned Subsidiaries or among any wholly owned Subsidiaries of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under and guarantees by the Company Credit Agreement, (Bor its Subsidiaries in respect thereof) loans or advances to wholly owned Subsidiaries and (C4) other Indebtedness purchase money financings and capital leases entered into in the ordinary course of business in an aggregate amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make 25,000,000 at any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter time outstanding; or (B) expenditures made in response to incur any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or Lien on any of its Subsidiaries other than settlements material property or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) assets other than in the ordinary course of business consistent with past practice and except for Company Permitted Encumbrances;
(A) except in the ordinary course of business consistent with past practice adopt, terminate or to amend any Company Plan other than if such action would not increase the extent required annual expense of the given Company Plan by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount (but in no event will the aggregate amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lienall increases in such expenses exceed $10,000,000), surrenderprovided, divestthat the Company may enter into offer letters, cancelemployment agreements and similar arrangements with employees below the level of Corporate Vice President in the ordinary course of business consistent with past practice, abandon (B) increase, or allow to lapse accelerate the vesting or expire payment of, the compensation or otherwise dispose benefits of any assetsdirector, product lines independent contractor or businesses current or former employee of the Company or its Subsidiariesany Company Subsidiary, with a value (C) grant any rights to severance, retention, change in excess of $50 million in the aggregatecontrol or termination pay to any director, except for (A) sales and non-exclusive licenses of products and services independent contractor or current or former employee of the Company or any Company Subsidiary, (D) except in the ordinary course of business consistent with past practice, in respect of employees at a level below Corporate Vice President that would not increase the number of Vice Presidents by more than 10% over the number of Vice Presidents employed by the Company as of the date of this Agreement, hire or promote any employee, or (E) terminate the employment of any employee at or above the level of Corporate Vice President (other than for cause); except, in each case, for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; (2) increases in compensation or benefits required pursuant to any Company Plan in effect on the date hereof and its Subsidiaries listed in Part 4.1(a)(ix) of the Company Disclosure Schedule; (3) increases to total target cash opportunities (i.e., annual base salary or wage rates and target annual cash bonus opportunities) as set forth in Part 4.1(a)(ix) of the Company Disclosure Schedule; (4) payment of cash incentive compensation to the extent set forth in Part 4.1(a)(ix) of the Company Disclosure Schedule and (5) any other actions set forth in Part 4.1(a)(ix) of the Company Disclosure Schedule;
(x) except in the ordinary course of business and for renewals or extensions of any existing Material Contract or Material Real Property Lease entered into in the ordinary course of business, (i)(A) materially amend or terminate (except for terminations pursuant to the expiration of the existing term of any Material Contract or Material Real Property Lease) any Material Contract or Material Real Property Lease or (B) waive, release or assign any abandonment material rights under any Material Contracts or Material Real Property Leases, or (ii) enter into any Contract or agreement that, if in effect on the date of Intellectual this Agreement, would constitute a Material Contract or Material Real Property Lease;
(xi) change any of its methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP;
(xii) make, change or revoke any Tax election, change or adopt any Tax accounting period or method of Tax accounting, amend any Company Return if such amendment would reasonably be expected to result in a Tax liability, file any Company Return prepared in a manner inconsistent with past practice, settle or compromise any material liability for Taxes or any Tax audit, claim, or other proceeding relating to a material amount of Taxes (except to the extent that a reserve for such Taxes has been established in the financial statements contained or incorporated by reference into the Company SEC Documents), enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any Subsidiary determines similar state, local or non-U.S. Legal Requirement) (except to the extent that a reserve for such Taxes has been established in the exercise financial statements contained or incorporated by reference into the Company SEC Documents), request any Tax ruling from any Governmental Entity, surrender any right to claim a refund of its reasonable business judgment to abandon Taxes, or, other than in the ordinary course of business, agree to an extension or waiver of the statute of limitations with respect to Taxes, to the extent, in each case, that such actions would reasonably be expected, individually or in the aggregate, to have a material adverse impact on any Tax liabilities of Parent or any of the Parent Subsidiaries (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among which would include the Company and its wholly owned Subsidiaries in the ordinary course Company Subsidiaries) after the Closing Date;
(xiii) sell, transfer, assign, exclusively license, or otherwise dispose of businessto any third party (by merger, consolidation, operation of law, division or otherwise), or mortgage, encumber or exchange any material Intellectual Property owned, or purported to be owned, by the Company or any Subsidiary of the Company;
(xiv) make any capital expenditure that is not contemplated by the capital expenditure budget (the “CapEx Budget”) set forth in Part 4.1(a)(xiv) of the Company Disclosure Schedule (a “Non-Budgeted Capital Expenditure”), except that the Company or any Subsidiary of the Company may make any Non-Budgeted Capital Expenditure that, when added to all other Non-Budgeted Capital Expenditures made by the Company and the Company Subsidiaries in the same fiscal year (and with respect to the 2021 fiscal year, since the date of this Agreement) would not, in the aggregate, exceed twenty percent (20%) of the aggregate CapEx Budget for such fiscal year;
(xv) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) grantany special meeting of the Company’s stockholders other than the Company Stockholder Meeting or (B) any other meeting of the Company’s stockholders to consider a proposal that would reasonably be expected to impair, increase prevent or provide delay the consummation of the transactions contemplated hereby;
(xvi) enter into any retentionagreement, change understanding or arrangement with respect to the voting of controlany capital stock or other equity interests of the Company (including any voting trust), severance other than with respect to awards under the Company Equity Plan otherwise permitted under this Agreement or termination payments in connection with the granting of revocable proxies in connection with any meeting of the Company’s stockholders;
(xvii) adopt a plan of (A) complete or benefits to any director, consultant or employee partial liquidation of the Company or any Subsidiary of its Subsidiariesthe Company or (B) dissolution, exceptmerger, consolidation, division, restructuring, recapitalization or other reorganization, other than, in the case of employees who are not executive officers clause (B), transactions between or among direct or indirect wholly owned Subsidiaries of the Company;
(xviii) (A) settle or compromise any litigation, claim, suit, action or proceeding, except for settlements or compromises that (1) involve solely monetary remedies with a value not in excess of $35,000,000 in the aggregate to be paid by the Company and its Subsidiaries, (2) do not impose any restriction on the Company’s business or the business of the Company Subsidiaries, (3) do not relate to any litigation, claim, suit, action or proceeding by the Company’s stockholders in connection with this Agreement or the Merger and (4) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary, or (B) commence any material litigation or other claim, suit, action or proceeding, other than (1) in the ordinary course of business consistent with past practice or as required by agreements(2) commencing any counterclaim to preserve, plans, programs protect or arrangements enforce any Company IP or material assets of the Company;
(xix) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xx) (A) amend any Company Permits in effect on a manner that adversely impacts the date hereof, Company’s ability to conduct its business in any material respect or (B) increase in terminate or allow to lapse any manner the compensationmaterial Company Permits;
(xxi) (A) fail to pay any issuance, bonus renewal, maintenance and other payments that become due with respect to any material Company Registered IP or benefits ofotherwise abandon, cancel, or makepermit to lapse any material Company Registered IP, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans in its reasonable business judgment or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (yB) pursuant to authorize the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect disclosure to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license third party of any material Intellectual Property owned by Trade Secret included in the Company or any IP in a way that results in loss of its Subsidiaries trade secret protection, other than in the ordinary course of business consistent with past practice;
(xvixxii) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals except in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise enter into any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iind
Appears in 2 contracts
Sources: Merger Agreement (Xilinx Inc), Merger Agreement (Advanced Micro Devices Inc)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 Each of the Company Disclosure Letter, the Company and EFIH covenants and agrees as to itself and each of its Subsidiaries (other than the Oncor Entities, subject to Section 6.23), and any entities that are to be, and actually are, contributed to Reorganized TCEH pursuant to the Plan of Reorganization) that, after except (i) as otherwise specifically permitted by the date hereof and until the earlier of the Effective Time or the termination provisions of this Agreement in accordance with its terms Agreement, (unless Buyer shall otherwise ii) as Parent may approve in writingwriting (such approval, such approval not to be unreasonably withheld, delayed or conditioned), (iii) as is required by any applicable Law or any Order (as defined below) of any Governmental Entity, (iv) as set forth in Section 6.1(a) of the Company shallDisclosure Letter, (v) as required by the Bankruptcy Court or the Bankruptcy Code, and (vi) as required pursuant to the Plan of Reorganization, in each case after the date hereof and prior to the earlier of the Termination Date (as defined below) and the First Closing Date, (w) the businesses of the Company, EFIH and their respective Subsidiaries (other than the Oncor Entities, subject to Section 6.23) shall cause its Subsidiaries to, conduct their business be conducted in the ordinary course consistent with past practice of business in all material respects and in compliance accordance with all applicable Laws andthe Bankruptcy Code and the Orders of the Bankruptcy Court and (x) each of the Company, to the extent consistent therewith, it shall, EFIH and shall cause its Subsidiaries, to use their respective Subsidiaries (other than the Oncor Entities, subject to Section 6.23) shall use its reasonable best efforts to preserve their material intact its business organizations intact organization and maintain in all material respects existing relations and goodwill relationships with Governmental Entitiesemployees, customers, suppliers, employees suppliers and business associatesGovernmental Entities. Without limiting the generality of the foregoing preceding provisions of this Section 6.1(a), and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or Termination Date and the termination of this Agreement in accordance with its termsFirst Closing Date, except as (A) required by applicable Law or as contemplated otherwise specifically permitted by the Scheme Document Annexprovisions of this Agreement, (B) otherwise expressly required by this Agreement, (C) Buyer as Parent may approve in writing (such approval approval, not to be unreasonably withheld, delayed or conditioned), (C) as is required by any applicable Law or any Order of any Governmental Entity, (D) as set forth in Section 6.1 6.1(a) of the Company Disclosure Letter, (E) as required by the Bankruptcy Court or the Bankruptcy Code, or (F) as required pursuant to the Plan of Reorganization, each of the Company and EFIH will not and will cause not permit any of its respective Subsidiaries not (other than the Oncor Entities, subject to Section 6.23, and any entities that are to be, and actually are, contributed to Reorganized TCEH pursuant to the Plan of Reorganization) to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise adopt any change in its articles of association, certificate of incorporation, formation or bylaws or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesPerson;
(iii) acquire (by mergeradopt a plan of complete or partial liquidation, scheme of arrangementdissolution, consolidationrestructuring, acquisition of stock or assets or otherwise) any corporation, partnership recapitalization or other business organization or any assets constituting a division or business line reorganization other than pursuant to the Plan of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementReorganization;
(iv) make any acquisition of any assets or Person for a purchase price in excess of $1,000,000, in the aggregate, unless such acquisition would be permissible under Section 6.1(a)(xi) below;
(v) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any shares of its capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities other equity interests (other than (A) the issuance of Ordinary Shares shares of Common Stock upon the vesting settlement of awards outstanding as of the date hereof under the Company RSUs Stock Plan (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof), or (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in of the ordinary course Company), or securities convertible or exchangeable into or exercisable for any shares of business and in a manner that would not have such capital stock, or any material Tax consequences)options, warrants or other rights of any kind to acquire any shares of such capital stock or other equity interests or such convertible or exchangeable securities;
(vvi) make or forgive any loans, advances or capital contributions to or investments in any Person in excess of $1,000,000, in the aggregate (other than loans, advances or capital contributions to or investments in the Company or any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceCompany);
(vivii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares capital stock or other equity interests interest (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in of the ordinary course of business consistent with past practiceCompany) or enter into any agreement with respect to the voting of its capital stock or other equity interestsstock;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to repurchase, redeem or otherwise acquire, directly or indirectly, any of its capital stockstock or equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, Company Securities or any Other Subsidiary Securities (options, warrants or other than the acquisition rights of any Ordinary Shares tendered by current kind to acquire any such capital stock or former employees other equity interests or directors in order to pay Taxes in connection with the vesting of Company RSUs)such convertible or exchangeable securities;
(viiiix) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)repurchase, redeem, defease, cancel, prepay, forgive, issue, sell, incur, or issue announce, offer, place, or sell arrange for the incurrence of, or otherwise acquire any indebtedness for borrowed money or any debt securities or warrants or other rights to acquire any debt security securities, of the Company or any of its Subsidiaries, or assume, guarantee or otherwise become responsible for such indebtedness of another Person (other than a wholly owned Subsidiary of the Company), except for indebtedness for borrowed money (A) Indebtedness for borrowed money incurred or repaid under the revolving facility EFIH First Lien DIP (1) in the ordinary course of business or (2) in connection with the refinancing thereof or (B) incurred by drawing under outstanding letters of credit in the Company Credit Agreementordinary course of business;
(x) (A) grant to any Employee any increase in compensation or benefits other than increases in the ordinary course of business, (B) loans grant to any Employee any increase in change in control, severance or advances to wholly owned Subsidiaries and termination pay, (C) establish, adopt, enter into, amend in any material respect or terminate any Assumed Plan (or any plan or agreement that would be a Benefit Plan if in existence on the date hereof) in the case of a Contributed Plan, other Indebtedness than in the ordinary course of business, (D) take any action to accelerate the time of vesting, funding or payment of any compensation or benefits under any Assumed Plan, (E) grant any new awards, or any outstanding awards, under any Assumed Plan, or (F) enter into or amend any collective bargaining agreement or other agreement with a labor union, works council or similar organization, except in the case of the foregoing clauses (A) through (F) for actions required pursuant to the terms of any Benefit Plan, or in accordance with the terms and conditions of this Agreement or applicable Law;
(xi) make or authorize any capital expenditure in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million 1,000,000, in the aggregate, during any 12-month period;
(xii) make any material changes with respect to its financial accounting methods, principles, policies, practices or procedures, except for as required by Law or by changes in GAAP;
(Axiii) expenditures set forth in the current capital forecast set forth other than with respect to (1) audits or other Tax proceedings disclosed in Section 6.1(a)(ix6.1(a)(xiii) of the Company Disclosure Letter or (B2) expenditures made in response any action to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method accelerate the recognition of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance cancellation of doubt, shall be governed by Section 6.1(a)(xii)) and subject indebtedness income that previously has been deferred pursuant to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto108(i) of the Company included in the Company Reports filed prior to the date hereof andCode, in each case, such settlement or compromise does only and to the extent the foregoing would not include materially adversely affect Parent, make (excluding any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
elections made (xiia) other than in the ordinary course of business or to (b) under Section 168(k) of the extent required by Law, make Code) or change any material Tax election, file change any material amended income method of Tax Returnaccounting, settle or compromise any material amount Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any material Tax Liabilityclaim or assessment, grant any power of attorney with respect to material Taxes, enter into any closing agreement with respect to any material amount of Tax or surrender refund or amend any right to claim a refund for a material amount of TaxTax Return, in each case, other than as required by Law;
(xiiixiv) waive, release, assign, settle or compromise any pending or threatened claim, action, suit or proceeding against the Company or any of its Subsidiaries (A) for an amount in excess of $10,000,000, or (B) that entails the acceptance or imposition of any material restrictions on the business or operations of the Company or its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries (including capital stock of any of its Subsidiaries, ) with a fair market value in excess of $50 million 1,000,000, in the aggregate, except for (A) other than sales and non-exclusive licenses of products and services of obsolete goods or equipment or the Company and its Subsidiaries in the ordinary course of businesslicensing or sublicensing of, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreementspursuant to Contracts in effect prior to the date hereof that have been made available to the Purchasers;
(xvi) other than pursuant to the Plan of Reorganization, plans(A) enter into, programs terminate (other than at the end of a term), renew or arrangements materially extend or amend any Company Material Contract or Contract that, if in effect on the date hereof, would be a Company Material Contract; or (B) increase in waive any manner the compensation, bonus or benefits ofmaterial default under, or makerelease, grant settle or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of compromise any material Intellectual Property owned by claim against the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, liability or any registration or grant thereof, or any application related thereto obligation owing to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgmentSubsidiaries under any Company Material Contract;
(xvii) enter into any transaction Contract that contains a change of control or similar provision that would require a payment to any Person counterparty thereto in connection with any Affiliate the consummation of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner Transactions that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreementotherwise be due;
(xviii) enter into any Contract that would require payment fail to or give rise to any rights (other than notice) to such other party or parties maintain in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment full force and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any effect material respect, the operations of insurance policies covering the Company or any of and its Subsidiaries;
(a) other than new Contracts with customers or suppliers Subsidiaries and their respective properties, assets and businesses in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business form and amount consistent with past practice unless the Company determines, in its reasonable commercial judgment, that the form or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms amount of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)should be modified; or
(xxvxix) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Notwithstanding anything in Section 6.1(a) to the contrary, in order to prevent the occurrence of, or mitigate the existence of, an emergency situation involving endangerment of life, human health, safety, the Environment or material property, equipment or other assets, the Company and EFIH may take commercially reasonable actions that would otherwise be prohibited pursuant to Section 6.1(a); provided, however, that the Company and EFIH shall knowingly provide Parent with notice of such emergency situation as soon as reasonably practicable after obtaining Knowledge thereof.
(c) Except (i) for actions required under the terms of this Agreement, (ii) for actions expressly permitted under Section 6.2 or (iii) as required by the Bankruptcy Court or the Bankruptcy Code, no party hereto shall intentionally take or permit any of their Subsidiaries its controlled Affiliates to take any action that is reasonably likely to prevent or materially interfere with in any material respect the consummation of any of the transactions contemplated by this AgreementTransactions.
(cd) The Company shall use its reasonable efforts Nothing contained in this Agreement is intended to cause give either Purchaser, directly or indirectly, the right to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth control or direct the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended or its Subsidiaries’ operations prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iEffective Time.
Appears in 2 contracts
Sources: Purchase Agreement (Ovation Acquisition I, L.L.C.), Purchase Agreement (Energy Future Competitive Holdings Co LLC)
Interim Operations. (a) Except as The Company agrees that, during the period from the date of this Agreement through the earlier of the Closing or the date of termination of this Agreement, except (x1) required by applicable Lawto the extent Parent shall otherwise give its prior consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (y2) otherwise expressly required by this Agreement or (z) otherwise as set forth in Section 6.1 4.1(a) of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time (3) as required by applicable Legal Requirements (including any applicable Covid-19 Measures that are Legal Requirements) or the termination of (4) as expressly required by this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditionedincluding any action permitted by Section 4.21), the Company shall, and shall cause its the Company Subsidiaries to, conduct their its business in the ordinary course in all material respects and in a manner consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shallpractice, and shall cause its Subsidiaries, to use their respective reasonable best efforts to maintain and preserve their material intact its business organizations intact and organization, keep available the services of key employees, maintain in all material respects existing relations and goodwill satisfactory relationships with Governmental Entities, customers, suppliers, employees distributors and business associatesother commercial counterparties and maintain its material assets and properties in their current condition (normal wear and tear excepted). Without limiting the generality of foregoing, during the foregoing and in furtherance thereof, period from the date of this Agreement until through the earlier of the Effective Time Closing or the date of termination of this Agreement in accordance with its termsAgreement, except (1) to the extent Parent shall otherwise give its prior consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (2) as set forth in Section 4.1(a) of the Company Disclosure Letter, (A3) as required by applicable Law Legal Requirements or (4) as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the shall not (and shall not permit any Company will not and will cause its Subsidiaries not Subsidiary to:):
(i) amend the Company’s Organizational Documents or otherwise change, the Organizational Documents of any Company Subsidiary (except for immaterial amendments to the Organizational Documents of any Company Subsidiary which would not reasonably be expected to materially delay or authorize prevent the consummation of the Closing or propose would reasonably be expected to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documentsadversely impact Parent and the Parent Subsidiaries);
(ii) mergesplit, enter combine, subdivide, amend the terms of or reclassify any shares of the Company’s capital stock or the capital stock of any Company Subsidiary (other than any wholly owned Company Subsidiary) (or any securities convertible into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiariesforegoing);
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, property or otherwise, ) with respect to any shares of its shares the Company’s capital stock or the capital stock of any Company Subsidiary, except for dividends or other equity interests (except for cash dividends distributions paid by any direct or indirect wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(iv) (A) form any Subsidiary that would constitute a Company Subsidiary, (B) make any capital contributions to, or investments in, any other Person (including any officer, director, Affiliate, agent or consultant of the Company or any Company Subsidiary) other than to wholly owned Company Subsidiaries that are not H▇▇▇▇▇ Satellite Systems Corporation or any “Restricted Subsidiary” under the Secured Indenture or the Unsecured Indenture or (C) acquire (by merger, consolidation, acquisition of stock or assets, formation of a joint venture or otherwise) (1) any other Person, (2) any equity interest in any other Person, (3) any business, or (4) any assets, except, in the case of clause (C), in one or more transactions with respect to which the aggregate consideration for all such transactions does not exceed $5,000,000 and which would not reasonably be expected to materially delay or prevent the consummation of the Closing;
(v) issue, sell, grant or otherwise permit to become outstanding any additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to acquire, any shares of its capital stock or the capital stock of any Company Subsidiary, other than: (A) shares of capital stock of a wholly owned Subsidiary of the Company issued to either the Company or another wholly owned Subsidiary of the Company; (B) shares of Company Common Stock issuable upon exercise of Company Options or the vesting of Company RSU Awards outstanding on the date of this Agreement; (C) pursuant to the Company ESPP in accordance with the terms of this Agreement; and (D) shares of Company Class A Common Stock issuable upon conversion from other classes of Company Common Stock in accordance with the Company Articles.
(vi) except in a transaction solely between the Company and any wholly owned Subsidiary of the Company or solely among any wholly owned Subsidiaries of the Company, sell, assign, transfer, lease or license to any third party, or encumber (other than Company Permitted Encumbrances), or otherwise dispose of, any Company IP or any material assets of the Company, other than: (A) sales of inventory or of obsolete assets in the ordinary course of business; (B) pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth on Section 4.1(a)(vi) of the Company Disclosure Letter; (C) non-exclusive licenses of Company IP granted in the ordinary course of business; or (D) disposals of any immaterial Company Registered IP resulting from a cancellation, abandonment or failure to renew any immaterial Company Registered IP in the ordinary course of business;
(vii) directly or indirectly repurchase, redeem or otherwise acquire any shares of the Company’s capital stock, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable for any shares of the Company’s capital stock, except: (A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the exercise of repurchase rights binding on the Company and existing prior to the date of this Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of Company Options outstanding on the date of this Agreement pursuant to the applicable Company Equity Plan or for withholding Taxes incurred in connection with the exercise, vesting or settlement of Company Options and Company RSU Awards outstanding on the date of this Agreement, as applicable, in accordance with past practice and the terms of the applicable award;
(viii) (A) incur any indebtedness for borrowed money, guarantee any such indebtedness, issue or sell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances to any other direct person; (B) incur any Lien on any of its material property or indirect wholly owned assets, except for Company Permitted Encumbrances; or (C) enter into any transactions that amend or otherwise alter available capacity under Section 4.7 of either the Unsecured Indenture or the Secured Indenture;
(ix) (A) adopt, terminate or materially amend any Company Plan or any collective bargaining or other labor agreement, (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any director, independent contractor or employee of the Company or any Company Subsidiary, other than, (1) in the event the Closing has not occurred by March 1, 2024, increases in base salary to any such individuals who are not directors or officers of the Company or any Company Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner practice that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does do not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material 5% in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), promotions permitted under clause (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into (C) grant any Contract that would have been rights to severance, retention, change in control or termination pay to any director, independent contractor or employee of the Company or any Company Subsidiary, (D) hire or promote any employee to a Material Contract had it been entered into prior to this Agreement position with the Company or any Company Subsidiary with an annual rate of base salary in excess of $300,000 or a title of Senior Vice President or higher, or (bE) terminate the employment of any employee of the Company or any Company Subsidiary with an annual rate of base salary in excess of $300,000 or a title of Senior Vice President or higher (other than for cause), except for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; and (2) increases required pursuant to any Company Plan as in effect on the date of this Agreement;
(x) other than in the ordinary course of business consistent with past practice (A) amend, supplement or expirations otherwise modify or terminate any Material Contracts or waive, release or assign any material rights under any Material Contracts (except for (1) terminations pursuant to the expiration of the existing term of any such Material Contract and (2) extensions at the option of the Company or any Company Subsidiary under the terms thereof exercised in the ordinary course of business consistent with past practice practice), or (B) enter into any Contract that, if in accordance with effect on the terms date of such Contractthis Agreement, amend, modify, supplement, waive, terminate, assign, convey, subject to would constitute a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiiixi) change any of its methods of financial accounting or accounting practices in any material respect other than renewals as required by changes in GAAP;
(xii) (A) make, change or revoke any material Tax election, (B) change or adopt any Tax accounting period or material method of Tax accounting, (C) amend any material Company Return, (D) settle or compromise any liability for material Taxes or any Tax audit, claim, or other proceeding relating to any material Taxes, (E) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar state, local or non-U.S. Legal Requirement), (F) request any Tax ruling from any Governmental Entity, (G) surrender any right to claim a refund of material Taxes or (H) extend or waive (other than automatically granted extensions and waivers) of the statute of limitations with respect to a material amount of Taxes;
(xiii) make any capital expenditure that is not contemplated by the capital expenditure budget set forth in Section 4.1(a)(xiii) of the Company Disclosure Letter (a “Company Non-Budgeted Capital Expenditure”), except that the Company or any Subsidiary of the Company may make any Company Non-Budgeted Capital Expenditure that, when added to all other Company Non-Budgeted Capital Expenditures made by the Company and the Company Subsidiaries since the date of this Agreement, would not exceed $5,000,000, individually, or $10,000,000, in the aggregate;
(xiv) convene any annual or special meeting (or any adjournment or postponement thereof) of the Company’s stockholders;
(xv) enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock or other equity interests;
(xvi) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(xvii) commence, settle or compromise any litigation, claim, suit, action, proceeding or other Legal Proceeding, except for settlements or compromises that (A) involve solely monetary remedies and, in the case of settlements involving the payment of money by the Company or the Company Subsidiaries, have a value not in excess of $5,000,000 in the aggregate, (B) do not impose any material restriction on the Company’s business or the business of the Company Subsidiaries, (C) do not relate to any litigation, claim, suit, action, proceeding or other Legal Proceeding by the Company’s stockholders in connection with this Agreement or the Merger and (D) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary;
(xviii) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xix) amend, terminate or allow to lapse any Company Permits in a manner that adversely impacts the Company’s ability to conduct its business in any material respect;
(xx) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to the Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company IP or agreements pursuant to which the Company or any Company Subsidiary licenses or obtains the right to use any Intellectual Property, other than any abandonment of any Company Registered IP at the end of the applicable statutory term or otherwise in the ordinary course of business consistent with past practice, or (B) disclose to any third party any Trade Secret included in the Company IP, other than pursuant to a non-disclosure agreement restricting the disclosure and use of such Trade Secret, or in connection with any regulatory filing or any publication of any patent application;
(xxi) except in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of enter into any Contract under which the Company or its Subsidiaries in effect any Company Subsidiary grants or agrees to grant any right, or agrees to pay any royalties or similar obligations, with respect to any Intellectual Property;
(xxii) enter into any material new line of business or line of business of any kind competitive with Parent and the Parent Subsidiaries;
(xxiii) take any action, or knowingly fail to take any action, which action or failure to act could be reasonably expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;Code; or
(xxiv) not exercise authorize, enter into any rights under Section 5 Contract or Section 6 of the Company’s current articles of association or otherwise adopt or implement make any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit commitment to do any of the foregoing.
(b) Neither Buyer nor P▇▇▇▇▇ agrees that, during the period from the date of this Agreement through the earlier of the Closing or the date of termination of this Agreement, except (1) to the extent the Company shall knowingly take otherwise give its prior consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (2) as set forth in Section 4.1(b) of the Parent Disclosure Letter, (3) as required by applicable Legal Requirements (including any applicable Covid-19 Measures that are Legal Requirements) or (4) as expressly required by this Agreement (including the LLC Conversion or any other action permitted by Section 4.12 or Section 4.21), Parent shall, and shall cause the Parent Subsidiaries to, conduct its business in the ordinary course in all material respects and in a manner consistent with past practice, and use reasonable best efforts to maintain and preserve intact its business organization, maintain satisfactory relationships with Governmental Entities, customers, suppliers, distributors and other commercial counterparties and maintain its material assets and properties in their current condition (normal wear and tear excepted). Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or the date of termination of this Agreement, except (1) to the extent the Company shall otherwise give its prior consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (2) as set forth in Section 4.1(b) of the Parent Disclosure Letter, (3) as required by applicable Legal Requirements or (4) as expressly required by this Agreement, Parent shall not (and shall not permit any of their Subsidiaries Parent Subsidiary to):
(i) amend Parent’s Organizational Documents in any manner which would reasonably be expected to take any action that is reasonably likely to materially delay or prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.Closing or would be adverse in any material respect to the holders of Company Class A Common Stock relative to holders of Parent Class A Common Stock;
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as split, combine, subdivide, amend the terms of or reclassify any shares of the Closing Date from each Parent’s capital stock or the capital stock of any Parent Subsidiary listed in Section 6.1(c(other than any wholly owned Parent Subsidiary) (or any securities convertible into or exchangeable for, or options, warrants or rights to acquire, any of the Company Disclosure Letter foregoing);
(as such schedule may be reasonably amended prior iii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) with respect to any shares of Parent’s capital stock or the Closing Date)capital stock of any Parent Subsidiary, certifying that each such except for dividends or other distributions paid by any wholly owned Parent Subsidiary does not own to Parent or another wholly owned Parent Subsidiary;
(iv) directly or indirectly repurchase, redeem or otherwise acquire any U.S. real property ishares of Parent Common Stock (excluding, for clarity, securities convertible
Appears in 2 contracts
Sources: Merger Agreement (EchoStar CORP), Merger Agreement (DISH Network CORP)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of During the Company Disclosure Letter, the Company covenants and agrees that, after period commencing on the date hereof and running until the earlier of the Effective Time or Closing Date and the termination of this Agreement in accordance with its terms Article VIII (unless Buyer shall otherwise approve the “Pre-Closing Period”), except (i) as expressly contemplated, required or permitted by this Agreement (including, for the avoidance of doubt, the Company LLC Units Redemptions), (ii) as required by applicable Law, (iii) as approved in writing, writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 6.1 of the Company shallDisclosure Schedule, the Company will, and shall will cause its Subsidiaries to use reasonable efforts to, (A) conduct their business businesses in the ordinary course of business consistent with past practice and practice, (B) manage their working capital in compliance the ordinary course of business consistent with all applicable Laws and, to the extent consistent therewith, it shallpast practice, and shall cause its Subsidiaries, to use their respective reasonable best efforts to (C) preserve their material business organizations intact and maintain in all material respects existing relations their respective assets, properties, business organizations and goodwill relationships with Governmental Entitiespartners, customersclients, suppliers, employees distributors and other Persons with which it has material business associates. Without limiting dealings; provided that no action by the generality Company or its Subsidiaries with respect to matters specifically permitted by any provision of the foregoing and in furtherance thereof, from the date Section 6.1(b) shall be deemed a breach of this Agreement until sentence unless such action would otherwise constitute a breach of such provision of Section 6.1(b).
(b) During the earlier of the Effective Time or the termination of this Agreement in accordance with its termsPre-Closing Period, except (i) as (A) expressly contemplated, required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required permitted by this Agreement, (Cii) Buyer may approve as required by applicable Law, (iii) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (Div) as set forth in on Section 6.1 of the Company Disclosure LetterSchedule, the Company will not not, and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise (A) adopt any change its articles of association, in the certificate of incorporation, incorporation or bylaws of the Company or other applicable governing documents(B) adopt any change in the comparable organizational document of any of the Company’s Subsidiaries (including any amendment to the Company LLC Agreement);
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or restructure, reorganize reorganize, recapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreement or arrangement imposing restrictions on the assets, operations or business of the Company or any of its Subsidiaries, other than restructuring, reorganization, recapitalization, liquidation or dissolution of any Subsidiary of the Company that are immaterial to the Company and its Subsidiaries, taken as a whole, and to the extent such actions are not expected to be adverse to Parent;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of optionspledge, warrants, commitments, subscriptions, rights to purchase or otherwise)encumber, dispose of, of or grant, transfer, or authorize the issuance, sale, pledge, encumbrance encumbrance, disposition or subjecting to any Liengrant of, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any Company Securities options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or Other Subsidiary Securities (other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction among the issuance of Ordinary Shares upon Company and its Subsidiaries or among the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, Company’s Subsidiaries or (B) the any grant or issuance of Ordinary Shares pursuant to the shares of Company ESPP, but only with respect to elections made prior to the date hereof and only Stock or Company LLC Units (1) in redemption of Company LLC Units in accordance with such Company ESPP as in effect as the terms of the date hereof Company LLC Agreement, (for the avoidance of doubt, the Company shall not allow the commencement 2) in respect of any new offering periods under the exercise of Company ESPP)Options or Company SARs, (C3) in settlement of any Company RSUs or Company PSUs or (4) in connection with the Comcast Warrants conversion or Charter Warrants (including exercise thereof), each as in effect as cancellation of the date hereof any Class G Units or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)Class G Common Stock;
(viv) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course or any of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceits Subsidiaries);
(viv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise with respect to any of its shares capital stock, except for (A) dividends or other equity interests (except for cash dividends distributions paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary of the Company and (B) distributions in accordance with Section 5.03 of the ordinary course of business Company LLC Agreement, to the extent consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(viivi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stockstock or securities convertible or exchangeable into or exercisable for any shares of its capital stock except for (A) any such transaction solely among the Company and any of its Subsidiaries or solely among any of the Company’s Subsidiaries, (B) acquisitions of shares of Company Securities Stock or any Other Subsidiary Securities Company LLC Units in satisfaction of withholding obligations in respect of Company Equity Awards, or (other than the acquisition C) acquisitions of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes Company LLC Units in connection with a redemption of such Company LLC Units in accordance with the vesting terms of the Company RSUs)LLC Agreement;
(viiivii) incur create, incur, assume or guarantee any Indebtedness for borrowed money or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries issue any debt securities or guarantees of the Company same or any other Indebtedness, except for (A) borrowings in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans guarantees or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed credit support provided by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee obligations of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, Subsidiaries in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements to the extent such Indebtedness is in effect existence on the date hereofof this Agreement or incurred in compliance with clause (A) of this Section 6.1(b)(vii), and (BC) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of Indebtedness solely among the Company and its Subsidiaries or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with among the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(aviii) (A) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, (B) amend, modify or waive in any material respect or in a manner adverse to the Company or any of its Subsidiaries, or terminate, any Material Contract (other than renewals or expirations of any such Contract in accordance with its terms), or (C) make any materially adverse changes to the Company’s policies regarding minimum quality, revenue or commission rates with respect to entry into new homeowner customer contracts or renewals of existing homeowner customer contracts;
(ix) make any material changes to the Company’s sales and marketing budget set forth on Section 6.1(b)(ix) of the Company Disclosure Schedule;
(x) make any material changes with respect to financial accounting policies or procedures, except as required by Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) settle any Action for an amount in excess of $500,000 individually or $1,500,000 in the aggregate other than (A) any settlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered (less retention or deductible under the applicable insurance policy) by insurance coverage amounts maintained by the Company or any of its Subsidiaries, and (B) settlements or compromises of any Action for an amount not materially in excess of the amount, if any, reflected or specifically reserved in the balance sheet (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof (with materiality measured relative to the amount so reflected or reserved, if any); provided that, in the case of each of the foregoing clause (A) and clause (B), the settlement or compromise of such Action does not (x) impose any non-de minimis restriction on the business or operations of the Company or any of its Subsidiaries (or Parent or any of its Subsidiaries after the Closing) and (y) include any non-de minimis non-monetary or injunctive relief, or the admission of wrongdoing, by the Company or any of its Subsidiaries or any of their respective officers or directors;
(xii) assign, transfer, sell, lease, license, encumber (other than Permitted Liens), abandon, permit to lapse, or otherwise dispose of any material assets or property (including any material Intellectual Property rights) except (A) as may be required by a Governmental Authority to permit or facilitate the consummation of the Mergers or any of the other transactions contemplated in this Agreement solely to the extent required pursuant to Section 6.5, (B) transactions among the Company and its Subsidiaries or among the Company’s Subsidiaries, (C) as permitted under the Company Credit Agreement, or (bD) in the ordinary course of business and in no event in an amount or value exceeding $750,000 individually or $2,000,000 in the aggregate;
(xiii) except as required by the terms of any Plan in effect on the date of this Agreement: (A) grant any equity or equity-based awards or increase the compensation or other benefits payable or provided to the current or former employees, officers, directors or other individual service providers of the Employer Entities; (B) increase or accelerate the funding, payment or vesting of compensation or benefits provided under any Plan; (C) grant any cash or equity or equity-based incentive awards, bonus, change of control, severance or retention award or similar types of payments or benefits to any current or former employees, officers, directors or other individual service providers of the Employer Entities; (D) establish, adopt, enter into, terminate or materially amend any Plan (or any plan, program, agreement or arrangement that would be a Plan if in effect on the date hereof) other than (x) offer letters or similar arrangements extended to newly hired individuals following the date hereof where such letters or arrangements do not provide for severance or equity-based compensation or (y) in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (E) amend or modify any performance criteria, metrics or targets under any Plan such that, as compared to those criteria, metrics or targets under any Plan in effect as of the date of this Agreement, the performance criteria, metrics or targets would reasonably be expected to be more likely to be achieved than in the absence of such amendment or modification;
(xiv) acquire any business, assets or capital stock of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than the acquisition of assets from vendors or Suppliers of the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice practice;
(xv) make (other than in a manner consistent with past practice), change or expirations revoke any material Tax election or change any annual Tax accounting period or method of Tax accounting, intentionally surrender any right to claim for a material Tax refund, credit, offset or other reduction in Tax liability, file any amended income Tax Return or other material amended Tax Return; enter into any closing agreement in respect of any material Tax; waive or extend the statute of limitations in respect of any Taxes, or settle, resolve or otherwise dispose of any material Action in respect of Taxes;
(xvi) incur, or commit to incur, any capital expenditures that are in excess of $500,000 individually or $1,500,000 in the aggregate, other than any capital expenditure (or series of related capital expenditures) made in accordance with the Company’s annual capital expenditure budget for periods following the date of this Agreement, as provided to Parent prior to the date hereof;
(xvii) (A) make any material modifications to any material Business Systems, excluding, for the avoidance of doubt, any routine updates or previously scheduled upgrades necessary for the continued performance, function or operation of such Business Systems, or (B) enter into, terminate, or materially amend or modify, any Contract for the purchase, license or integration of any material property management system Software;
(xviii) voluntarily terminate, suspend, abrogate, amend or modify any material Company Permit in a manner materially adverse to the Company and its Subsidiaries, taken as a whole;
(xix) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former officer, manager, employee or independent contractor of the Employer Entities;
(xx) (A) negotiate or enter into any Collective Bargaining Agreement, (B) voluntarily certify or recognize any labor union, labor organization, works council, or group of employees as the bargaining representative for any employees of the Company or any Company Subsidiary, or (C) implement or announce any plant closings, mass layoffs, group terminations, or other actions affecting employees of the Company or any Company Subsidiary that trigger notice requirements under the WARN Act;
(xxi) enter into any Real Property Lease, or modify, renew or terminate any Real Property Lease, in each case, unless in the ordinary course of business consistent with past practice in accordance with and the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of annual payment obligations thereunder by the Company or any of its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation do not exceed $500,000 individually or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined $2,000,000 in the Company’s current articles of association) or similar interests or rights)aggregate; or
(xxvxxii) agree, authorize or commit to do any of the foregoing.
(bc) Neither Buyer nor Company shall knowingly take Nothing contained in this Agreement is intended to give Parent or permit Merger Subs or any of their Affiliates, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Company Merger Effective Time. Prior to the Company Merger Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
(d) Subject to the terms of this Agreement, including Section 6.5 and Section 6.13, from the date of this Agreement until the Company Merger Effective Time, none of Parent, Merger Subs or their respective Subsidiaries shall (i) knowingly take any action that is reasonably likely to prevent would prevent, materially delay or materially interfere with impede the consummation of the Equity Financing; or (ii) acquire or agree to acquire by merging or consolidating with, or by purchasing substantially all of the assets of or equity in, any Person (a “Specified Acquisition”), if the entering into of a definitive agreement relating to or the consummation of such a Specified Acquisition, as applicable, would reasonably be expected to materially increase the risk of any Governmental Authority entering an Order, ruling, judgment or injunction prohibiting the consummation of the transactions contemplated by this Agreement, including the Mergers.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Vacasa, Inc.), Agreement and Plan of Merger (Vacasa, Inc.)
Interim Operations. Except with Purchaser’s prior written consent (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), Seller shall cause each of the Company shall, and shall cause its Subsidiaries to, (i) to conduct their its business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause use its Subsidiaries, to use their respective commercially reasonable best efforts to (A) preserve their material its business organizations intact and intact, (B) maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates. Without limiting the generality of the foregoing , and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing keep available the services of its present employees and agents; and (such approval ii) not to be unreasonably withheld, delayed or conditioned) or (D) other than as set forth in Section 6.1 the corresponding section of the Company Seller Disclosure Letter, the Company will not and will cause its Subsidiaries not to:):
(ia) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documentsOrganizational Documents;
(iib) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person;
(c) acquire assets outside of the ordinary course of business consistent with past practice from any other Person with a value or restructurepurchase price in the aggregate in excess of $50,000,000.00 or that would have any possibility of preventing or delaying the Closing beyond the Termination Date;
(d) issue, reorganize sell, pledge, dispose of, grant, transfer, Encumber, or completely authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or partially liquidate other Encumbrance of, any Equity Interests of the Company or any of its Subsidiaries (other than the issuance of Equity Interests (i) by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary or (ii) by the Company to Seller), securities convertible or exchangeable into, or exercisable for, any Equity Interests or any options, warrants or other rights of any kind to acquire any such Equity Interests or such convertible or exchangeable securities;
(e) create or incur any Encumbrance (other than a Permitted Encumbrance) on the assets of the Company or any of its Subsidiaries that, individually or in the aggregate, is material to the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(vf) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (Person, other than (x) any of the foregoing to or on behalf of the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesCompany, or (y) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practicepractice and which do not have any possibility of preventing or delaying the Closing beyond the Termination Date;
(vig) declare, set aside, make or pay any dividend (i) cash distributions or other distributiondividends in any month that in the aggregate are in excess of the lesser of (A) $150,000,000.00 and (B) the amount of Free Cash Flow generated by the Company and its Subsidiaries for the preceding month, prorated for the month in which this Agreement is entered into, and for the month in which the Closing occurs; provided, that if distributions or dividends in respect of any month shall have been less than $150,000,000.00 as a result of the foregoing limitation or otherwise, Seller shall be entitled to make additional cash distributions at any time or from time to time up to an amount equal to the lesser of (x) Free Cash Flow for the period since the date of this Agreement and (y) the product of (A) $150,000,000.00 and (B) the number of whole and, without duplication, partial months in such period, or (ii) non-cash distributions or dividends, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests Equity Interests (except for non-cash dividends distributions paid by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly wholly-owned Subsidiary in the ordinary course of business consistent with past practiceSubsidiary) or enter into any agreement with respect to the voting of its capital stock or other equity interestsEquity Interests;
(viih) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viiii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for Indebtedness incurred in the ordinary course of business consistent with past practice that is satisfied in full at or prior to the Closing, or (Aii) Indebtedness for borrowed money under amend, modify, supplement or waive the revolving facility under terms of any existing Indebtedness, debt securities or warrants or other rights to acquire debt securities of the Company Credit Agreementor any of its Subsidiaries, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness except in an amount not to exceed an aggregate principal amount the ordinary course of $15 millionbusiness consistent with past practice;
(ixi) shall not except as contemplated by the capital budget set forth in the business plan set forth on Schedule 4.16 of the Seller Disclosure Letter, make or authorize any payment of, or make any accrual or commitment for, capital expenditures in excess of $40 million 25,000,000.00 in the aggregate, except for aggregate in any consecutive six-month period (A) expenditures set forth or $50,000,000.00 in the current capital forecast set forth event of an increase in Section 6.1(a)(ix) data demand in the Business significantly in excess of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwisedemand anticipated on the date hereof);
(xj) amend, supplement, waive, terminate, assign, convey, encumber or otherwise transfer, in whole or in part, its rights or interests under or in any Material Contract, or enter into any Intercompany Contract or Company Contract that would be a Material Contract if in effect as of the date hereof;
(k) enter into any Intercompany Contract or amend, modify or waive any Intercompany Contract in any manner that would result in the Company or its Subsidiaries paying to the other parties thereto aggregate consideration greater than that provided for in the copies of Intercompany Contracts provided to Purchaser pursuant to Section 4.2(a)(v);
(l) make any material changes with respect to any method of Tax or material financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental EntityGAAP;
(xim) except with respect to (i) enter into any litigationline of business in any geographic area other than the current lines of business of the Company and its Subsidiaries and products and services reasonably ancillary thereto (including ancillary Internet services), auditincluding any current line of business and products and services reasonably ancillary thereto, claim, action or other Proceeding related to Tax Returns or in any Tax Liability (which, geographic area for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against which the Company or any of its Subsidiaries other than settlements currently holds a FCC License authorizing the conduct of such business, product or compromises service in such geographic area, (ii) except as currently conducted, engage in the conduct of any litigationbusiness in any state that would require the receipt or transfer of a Communications License or any other License issued by any Governmental Entity authorizing operation or provision of any communication services or foreign country that would require the receipt or transfer of, auditor application for, claima License to the extent such License would reasonably be expected to prevent, action materially delay or materially impair the consummation of the Transaction, or (iii) enter into any business or operations outside of the United States;
(n) file for any Company License the receipt of which would reasonably be likely to prevent, materially impair or materially delay consummation of the Transaction;
(o) settle any litigation or other Proceedings where proceedings before a Governmental Entity for an amount in excess of $15,000,000.00;
(Ap) except to the extent otherwise required by Law, make or change any Tax election, change any method of Tax accounting or settle or finally resolve any controversy with respect to Taxes for an amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed that materially exceeds the amount reserved against such matter with respect thereto in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof andFinancial Statements, in each case, if such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by action would have an adverse affect on the Company or any of its Subsidiaries other Purchaser that is more than the payment of money damagesimmaterial;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiiiq) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (Bi) any abandonment of Intellectual Property that the Company Communications Licenses or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease wireless spectrum and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (Cii) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract other Licenses, assets, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries that would have been a Material Contract had it been entered into are material to the Business, other than pursuant to Company Contracts in effect prior to this Agreement the date hereof;
(r) other than as may be required by applicable Law or pursuant to the existing terms and conditions of any Benefit Plan as in effect on the date hereof, (i) terminate, establish, adopt or amend any Benefit Plan other than the adoption of annual Benefit Plans in the ordinary course of business consistent with past practice and amendments to health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (ii) grant any salary or wage increase, other than to increase salary and wages for employees by no more than 4% in the aggregate in the ordinary course of business consistent with past practice, (iii) pay aggregate bonus or incentive compensation other than in the ordinary course consistent with past practice, (iv) (x) grant any new compensation award, other than bonus awards and cash-based long term incentive compensation awards, in each case in amounts and on terms that are in the ordinary course of business consistent with past practice; provided, however, that no new awards shall be granted under the Phantom Share Plan, (y) amend the terms of outstanding compensation awards other than in a manner that does not increase the amounts payable or accelerate the timing of any payment under such awards and in the ordinary course of business consistent with past practice, or (bz) change the compensation opportunity under any Benefit Plan, (v) pay any severance other than in the ordinary course of business consistent with past practice in connection with employees’ entering into and not revoking a release of claims against the Company in connection with terminations of employment, (vi) take any action to accelerate the vesting or expirations payment, or fund or secure the payment, of any such Contract amounts under any Benefit Plan, (vii) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (viii) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries, or (ix) voluntarily establish or adopt any collective bargaining agreement;
(s) transfer, sell, lease, license, divest or otherwise dispose of any transmission towers owned or leased by the Company or any of its Subsidiaries (it being understood that the foregoing shall not apply to the decommisions of towers in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contractpractice);
(xxiiit) other than renewals in purchase, lease or otherwise acquire any wireless spectrum;
(u) make a fundamental change to any of important elements of the ordinary course of business, amend, modify, terminate, cancel network technologies or let lapse a material insurance policy (or reinsurance policy) or self-insurance program principal billing systems of the Company or and its Subsidiaries in effect as of the date hereof(excluding system upgrades, unless simultaneous with such termination, cancellation or lapse, equipment replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programssimilar matters, in each case, providing coverage equal to or greater than case within the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force same fundamental framework of network technologies and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rightsbilling systems); or
(xxvv) agree, authorize or commit enter into an agreement to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Stock Purchase Agreement, Stock Purchase Agreement (At&t Inc.)
Interim Operations. (a) Except (i) as expressly contemplated, required or permitted by this Agreement, (xii) as required by applicable Law, (yiii) otherwise expressly required as approved in writing by this Agreement or Parent (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), (iv) as set forth on Section 6.01 of the Company shallDisclosure Schedule, and shall cause its Subsidiaries toor (v) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, conduct their business that, with respect to actions taken or omitted to be taken in the ordinary course consistent with past practice and in compliance with all applicable Laws andreliance on this clause (v), to the extent consistent therewithpermitted under applicable Law and practicable under the circumstances, it shall, the Company shall provide prior notice to and shall cause its Subsidiaries, consult in good faith with Parent prior to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereoftaking such action), from the date of this Agreement until the earlier to occur of the Effective Time or the termination of this Agreement in accordance with pursuant to Article 8 and the Effective Time, the Company will, and will cause its termsSubsidiaries to, except as use its and their commercially reasonable efforts to (A) required by applicable Law or as contemplated by conduct their businesses in the Scheme Document Annex, ordinary course of business in all material respects and (B) otherwise preserve intact their business organizations and relationships with customers, suppliers, distributors and other Persons with which it has material business dealings.
(b) Except (A) as expressly contemplated, required or permitted by this Agreement, (B) as required by applicable Law, (C) Buyer may approve as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or ), (D) as set forth in on Section 6.1 6.01 of the Company Disclosure LetterSchedule, or (E) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (E), to the extent permitted under applicable Law and practicable under the circumstances, the Company shall provide prior notice to and consult in good faith with Parent prior to taking such action), from the date of this Agreement until earlier to occur of the termination of this Agreement pursuant to Article 8 and the Effective Time, the Company will not not, and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise (x) adopt any change its articles of association, in the certificate of incorporationincorporation or bylaws of the Company or (y) adopt any change in the organizational documents of any of the Company’s Subsidiaries, bylaws in each case whether by merger consolidation or other applicable governing documentsotherwise;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or restructure, reorganize reorganize, recapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreement or arrangement imposing any material restrictions on the assets, operations or business of the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transferof or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance or subjecting to any Lienof, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any Company Securities options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or Other Subsidiary Securities (other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction among the issuance of Ordinary Shares upon Company and its Subsidiaries or among the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, Company’s wholly owned Subsidiaries or (B) the any issuance of Ordinary Shares pursuant to the exercise or settlement of Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect Equity Awards outstanding as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) this Agreement in connection accordance with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)their terms;
(viv) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to the Company or any direct or indirect of its wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceSubsidiaries);
(viv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise with respect to any of its shares capital stock, except for dividends or other equity interests (except for cash dividends distributions paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary in of the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsCompany;
(viivi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stockstock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (except for (A) any such transaction by a wholly owned Subsidiary of the Company, Company Securities or any Other Subsidiary Securities (other than the acquisition B) acquisitions of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes satisfaction of withholding obligations in connection with the vesting respect of Company RSUsEquity Awards to the extent required by such Company Equity Awards, or (C) payment of the exercise price in respect of Company Options, in the case of clauses (B) and (C), outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(viiivii) incur create, incur, assume or guarantee any Indebtedness for borrowed money or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries issue any debt securities or guarantees of the Company same or any other Indebtedness, except for (A) borrowings in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Existing Credit Agreement, (B) loans guarantees or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed credit support provided by the Company or any of its Subsidiaries other than of the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses obligations of the Company or its Subsidiaries, with a value in excess any of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of businessbusiness to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with clause (A) of this Section 6.01(b)(vii), (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers Indebtedness solely among the Company and its wholly wholly-owned Subsidiaries in or among the ordinary course of businessCompany’s wholly-owned Subsidiaries;
(xivviii) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, other than in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection accordance with the Company’s usual and customary annual review capital expenditure budget made available to Parent, incur or commit to any capital expenditure or expenditures, in 2019any period, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements capital expenditures in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made an amount not exceeding in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination aggregate 120% of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as amount included in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsbudget;
(xvix) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
, (xviA) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement Agreement; provided, that no Contract of the type described in Section 5.01(k)(i)(N) or Section 5.01(k)(i)(O) shall be entered into without the prior written consent of Parent, or (bB) amend, modify or waive in any material respect or terminate any Material Contract in a manner adverse to the Company (other than expirations of any such Contract in accordance with its terms);
(x) make any material changes with respect to financial accounting policies or procedures, except as required by Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) settle any Action for an amount in excess of $1 million individually or $5 million in the aggregate other than (A) any settlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered by insurance coverage or retention amounts maintained by the Company or any of its Subsidiaries and (B) settlements or compromises of any Action for an amount not materially in excess of the amount, if any, reflected or specifically reserved in the balance sheet (or the notes thereto) of the Company included in the Company Reports (with materiality measured relative to the amount so reflected or reserved, if any); provided that, in the case of each of the foregoing clauses (A) and (B), the settlement or compromise of such Action does not (x) impose any material restriction on the business or operations of the Company or any of its Subsidiaries (or Parent or any of its Subsidiaries after the Closing) and (y) include any non-monetary or injunctive relief, or the admission of wrongdoing, by the Company or any of its Subsidiaries or any of their respective officers or directors;
(xii) sell, assign, lease, license, sublicense or otherwise transfer or dispose of, abandon or permit to lapse, fail to take any action necessary to maintain, enforce or protect, or create or incur any Lien (other than Permitted Liens), on any material assets or property (including any Company Intellectual Property and Licensed Intellectual Property) except (A) pursuant to existing contracts or commitments (or refinancings thereof), (B) transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, or (C) in the ordinary course of business consistent with past practice and in no event in an amount exceeding $1 million individually or expirations $5 million in the aggregate;
(xiii) except for such actions required by the terms of Benefit Plans as in effect on the date hereof: (A) increase the compensation or other benefits payable or provided to any such Contract Service Providers other than increases in base salary in the ordinary course of business consistent for Service Providers with past practice in accordance with base salary of less than $300,000; (B) increase or accelerate or commit to accelerate the terms funding, payment or vesting of such Contractcompensation or benefits provided under any Benefit Plan, amend(C) grant or announce any cash, modifyequity or equity-based, supplementchange of control, waiveseverance or retention award to any Service Provider; (D) establish, terminateadopt, assign, convey, subject to a Lien enter into terminate or otherwise transfer, in whole or in part, rights or interest pursuant to or amend (x) in any Material Contract;
respect any Collective Bargaining Agreement or (xxiiiy) in any material respect, any Benefit Plan (or any plan, program, agreement or arrangement that would be a Benefit Plan if in effect on the date hereof); (E) recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative of any employees of the Company or its Subsidiaries or (F) hire or terminate the employment of any employee of the Company whose annualized base compensation exceeds $300,000, other than renewals (x) hiring to replace departed employees or (y) terminations for “cause” (as determined in the Company’s reasonable discretion); provided, however, that the foregoing clauses (A), (B), (C), and (D) shall not restrict the Company or its Subsidiaries from making available to newly hired employees or independent contractors (in the ordinary course of business), amendplans, modifyagreements, terminatebenefits and compensation arrangements (including cash incentive grants, cancel but excluding any equity-related incentives)) that are on substantially the same terms and conditions and have a value that is consistent with the past practice of making compensation and benefits available to newly hired employees or let lapse a material insurance policy independent contractors in similar positions or for employees or independent contractors with similar levels of responsibility;
(xiv) acquire any business, assets or reinsurance policy) capital stock of any Person or self-insurance program division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than the acquisition of assets from vendors or suppliers of the Company or any of its Subsidiaries in the ordinary course of business;
(xv) cancel, modify, amend or waive or terminate the Existing Credit Agreement, except for modifications or amendments to the Existing Credit Agreement that would not (A) impair the ability of Parent to obtain the Debt Financing on the Closing Date, (B) reduce the ability of the Company and its Subsidiaries to incur secured debt for borrowed money in the form of the Debt Financing on the Closing Date in any material respect, (C) reduce the ability of the Company and its Subsidiaries to make Restricted Payments (as defined in the Existing Credit Agreement) on the Closing Date in any material respect, (D) impair the ability of the Merger to be consummated in compliance with any “merger” or “fundamental changes” covenant in the Existing Credit Agreement or (E) amend or modify the stated final maturity date of any indebtedness for borrowed money thereunder to be sooner than such maturity date as in effect as of the date hereof, unless simultaneous with or amend or modify any such termination, cancellation agreement to reduce the amount of the total lending commitments thereunder; implement or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing announce any permanent plant closings or self-insurance programs, in each case, providing coverage equal to or greater than permanent facility shutdown that would implicate the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effectWARN Act;
(xxivxvi) not exercise other than in the ordinary course of business (A) make, change or revoke any rights under Section 5 material Tax election; (B) change any material Tax accounting period or Section 6 method of the Company’s current articles of association Tax accounting, (C) file any material amended Tax Return, (D) settle or otherwise adopt compromise any material claim related to Taxes, (E) enter into any material closing agreement or implement (F) surrender any “poison pill” right to claim a material Tax refund, offset or other shareholder rights plan (or otherwise issue any Rights (as defined reduction in the Company’s current articles of association) or similar interests or rights)liability; or
(xxvxvii) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (Convey Health Solutions Holdings, Inc.), Merger Agreement (Convey Health Solutions Holdings, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by From and after the execution and delivery of this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in accordance with its terms Section 7.1(a) of the Company Disclosure Schedule or (unless Buyer iii) as Parent shall otherwise approve consent in writing, such approval writing (which consent shall not to be unreasonably withheld, delayed or conditioned), the Company (A) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to conduct their business respective businesses in the ordinary course consistent with past practice and Ordinary Course of Business in compliance with all applicable Laws andmaterial respects, to the extent consistent therewith, it (B) shall, and shall cause its SubsidiariesSubsidiaries to, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and (x) maintain in all material respects existing relations relationships and goodwill with Governmental Entities, key customers, supplierssuppliers and other persons having material business relationships with the Company and its Subsidiaries and (y) keep available the services of the officers and key employees of the Company and its Subsidiaries, employees and business associates. Without (C) without limiting the generality of the foregoing foregoing, shall not, and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will shall cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws or other applicable governing documentsOrganizational Documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructurePerson, reorganize or completely or partially liquidate except for any such transactions solely among Wholly Owned Subsidiaries of the Company or any of its Subsidiaries;Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire (or agree to acquire by merger, scheme of arrangement, consolidation, acquisition of stock stock, equity or assets or otherwise) , any corporationbusiness, partnership Person, division, properties or assets from any other business organization Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any assets constituting a division individual transaction or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement$2 million in the aggregate;
(ivvi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a -50- fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or authorize otherwise enter into any Contract or understanding with respect to the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant voting of or transfer of any shares of capital stock of the Company (including Ordinary Shares) or capital stock or other equity or equity-based interests of any of its Subsidiaries Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any Company Securities options, warrants or Other Subsidiary Securities other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the issuance delivery of Ordinary any Common Shares upon (1) the vesting conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company RSUs (Notes in accordance with the Indenture and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Ordinary Preferred Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as payment of dividends on the Preferred Shares in effect as accordance with the terms of the date hereof Preferred Shares or (DB) the issuance or transfer of common stock or shares of such capital stock, other equity interests securities or convertible or exchangeable securities (1) by a wholly owned Wholly Owned Subsidiary of the Company to the Company or another wholly owned Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the ordinary course date of business this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or (3) pursuant to the ESPP in accordance with its terms and in a manner that would not have any material Tax consequencessubject to Section 4.3(g));
(vviii) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other than to any direct or indirect wholly owned Subsidiary of between the Company and any of its Wholly Owned Subsidiaries in the ordinary course Ordinary Course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceBusiness);
(viix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise with respect to any of its shares capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for cash (A) dividends paid by any direct or indirect wholly owned Wholly Owned Subsidiary to the Company or to any other direct Wholly Owned Subsidiary of the Company or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice(B) or enter into any agreement with respect dividends payable to the voting holders of its capital stock Preferred Shares, payable in cash or other equity interestsPreferred Shares, in accordance with the terms of the Preferred Shares;
(viix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquireacquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, Company Securities other equity interests or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities (shares of its capital stock or other equity interests, other than (A) the acquisition withholding of any Ordinary Common Shares tendered by current to satisfy the payment of the exercise price on the exercise of a Company Option or former employees withholding Tax obligations upon the exercise, vesting or directors in order to pay Taxes in connection with the vesting settlement of Company RSUs)Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(viiixi) incur or assume any Indebtedness or indebtedness for borrowed money, guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness enter into a “keep well” or similar arrangement in an amount respect of indebtedness for borrowed money except for any such indebtedness not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize 2.5 million individually or make any capital expenditures in excess of $40 5 million in the aggregate;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith -51- except for (A) expenditures as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in in, the current Company’s capital forecast budget set forth in Section 6.1(a)(ix7.1(a)(xii) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwiseSchedule;
(xxiii) make enter into, terminate or materially amend any material changes with respect Contract pursuant to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against which the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where purchase from a third party service provider Software (A“Third Party IT Contracts”) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course Ordinary Course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement Business with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other involve aggregate annual payments of less than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws$300,000);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (Voya Financial, Inc.), Merger Agreement (Voya Financial, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by From the date of this Agreement or (z) otherwise until the Effective Time, except as set forth in Section 6.1 of the Company Disclosure LetterSECTION 5.2(a) OF THE COMPANY DISCLOSURE LETTER, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement unless Parent has consented in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)writing thereto, the Company shall, and shall cause its Subsidiaries to, :
(i) conduct their business in the its operations according to its ordinary course of business consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations with all applicable Laws; (ii) use its commercially reasonable efforts to preserve intact its business organizations and goodwill with Governmental Entitiesgoodwill, customers, supplierskeep available the services of its officers, employees and consultants, and maintain satisfactory relationships with those Persons having business associates. Without limiting relationships with them; (iii) upon the generality discovery thereof, promptly notify Parent of the foregoing existence of any breach of any representation or warranty contained herein (or, in the case of any representation or warranty that makes no reference to Company Material Adverse Effect or materiality, any breach of such representation or warranty in any material respect) or the occurrence of any event that would cause any representation or warranty contained herein no longer to be true and correct (or, in furtherance thereofthe case of any representation or warranty that makes no reference to Company Material Adverse Effect or materiality, from to no longer be true and correct in any material respect); (iv) promptly deliver to Parent true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement; and (v) pay its Taxes when due.
(b) From and after the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure LetterSECTION 5.2(b) OF THE COMPANY DISCLOSURE LETTER, unless Parent has consented in writing thereto (which consent shall not be unreasonably withheld or delayed), the Company will not shall not, and will shall cause its Subsidiaries not to:
: (i) amend its Certificate of Incorporation or otherwise changeBy- Laws; (ii) offer, issue, sell or pledge any shares of its capital stock or other ownership interest in the Company or its Subsidiaries, or authorize any securities convertible into or propose exchangeable for any such shares or ownership interest, or any rights, warrants or options to amend acquire or with respect to any such shares of capital stock, ownership interest, or convertible or exchangeable securities; (iii) effect any stock split or otherwise change its articles of associationcapitalization as it exists on the date hereof; (iv) grant, certificate of incorporationconfer or award any option, bylaws warrant, convertible security or other applicable governing documents;
right to acquire any shares of its or its Subsidiaries' capital stock; (iiv) mergedeclare, enter into set aside or pay any scheme dividend or make any other distribution or payment with respect to any shares of arrangement or bid conduct agreement its capital stock or other similar arrangementownership interests (other than such payments by the Subsidiaries to the Company); (vi) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of its Subsidiaries or any securities that are convertible into or exchangeable for any shares of capital stock of, or consolidate with other equity interests in, or any outstanding options, warrants or rights of any kind to acquire any shares of capital stock of, or other Person or restructureequity interests in, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
; (iiivii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of optionslease, warrantslicense, commitmentsmortgage, subscriptionspledge, rights to purchase or otherwise), dispose of, grantencumber, transfer, exchange or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer otherwise dispose of any shares of its properties or assets, whether tangible or intangible (including capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (Subsidiaries), other than (A) the issuance sale or disposition of Ordinary Shares upon inventory in the vesting ordinary course of Company RSUs (and dividend equivalents thereonbusiness consistent with past practice or the sale, if applicable) outstanding prior to lease or other disposition of assets which individually or in the date hereofaggregate, (B) the issuance of Ordinary Shares pursuant are obsolete or not material to the Company ESPPand its Subsidiaries taken as a whole; (viii) acquire by merger or consolidation with, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement by purchase of any new offering periods under equity interest of or by any other manner, any business or entity or otherwise acquire any assets which would be material, individually or in the Company ESPP)aggregate, (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company and its Subsidiaries taken as a whole, except for purchases of inventory, supplies or another wholly owned Subsidiary capital equipment in the ordinary course of business and except for the acquisition of any business, entity or assets not having aggregate individual consideration greater than $50,000 or aggregate consideration greater than $100,000; (ix) incur or assume any long-term or short-term debt, except for working capital purposes and the purchase of capital equipment in a manner that would not have the ordinary course of business under the Company's existing credit agreements set forth in Section 5.2(b) of the Company Disclosure Letter; (x) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any material Tax consequences);
other Person except its Subsidiaries; (vxi) make or forgive any loans, advances or capital contributions continuations to, or investments in, any other Person other than loans and advances to officers or employees in the ordinary course of business, not to exceed $100,000 in the aggregate; (xii) increase the compensation (or benefits) payable to or investments in any Person (other than to become payable to any direct director, officer or indirect wholly owned Subsidiary other employee, except for increases in salary or wages of the Company non-officer employees in the ordinary course of business and consistent with past practice; (xiii) establish, adopt, enter into, materially amend, or take any action to accelerate any rights or benefits under any collective bargaining agreement or any Plan; (xiv) effect any reorganization or recapitalization; (xv) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise) in a manner that would not have any material Tax consequences) excess of $250,000 individually and $500,000 in the aggregate, other than extending trade credit to customers and advancing business expenses to employeesthe payment, in each casedischarge, settlement or satisfaction in the ordinary course of business consistent or in accordance with past practice;
(vi) declaretheir terms, set asideof liabilities disclosed, make reflected or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to or incurred since the date hereof and, in each case, of such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries financial statements in the ordinary course of business, (B) or cancel any abandonment indebtedness in excess of Intellectual Property that the Company or any Subsidiary determines $10,000 individually and $50,000 in the exercise of its reasonable business judgment to abandon in the ordinary course of business, aggregate; (Cxvi) dispositions of obsolete or worthless assets, (D) non-renewal of take any lease of real property action that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) would reasonably be expected to: (A) grantprevent, increase impair or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of materially delay the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers ability of the Company, in Parent or Merger Sub to consummate the ordinary course of business consistent with past practice Merger or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in cause any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in conditions to the case of employees or consultants who are not executive officers consummation of the Company, in the ordinary course of business consistent with past practice or as is Merger not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiariessatisfied; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into make or change any transaction with Tax election, file any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material amended Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practiceReturn, enter into any Contract that would have been closing agreement, settle or compromise any liability with respect to Taxes, agree to any material adjustment of any Tax attribute, file any claim for a Material Contract had it been entered into prior refund of Taxes, or consent to this Agreement any extension or waiver of the limitation period applicable to any Tax claim or assessment; or (bxviii) other than agree in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien writing or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do take any of the foregoingforegoing actions.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (Integrated Defense Technologies Inc), Merger Agreement (Integrated Defense Technologies Inc)
Interim Operations. (a) Except as From the date of this Agreement and until the Effective Time or the earlier termination of this Agreement, except (xv) required by applicable Lawin connection with the Carveout Transaction, (yw) otherwise expressly required by this Agreement or (z) otherwise as set forth in Section 6.1 6.1(a) of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time (x) as otherwise expressly contemplated or the termination of permitted by this Agreement (including Section 6.17), (y) to the extent consented to in accordance with its terms writing by Parent (unless Buyer which consent shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)) or (z) as required by applicable Law, the Company shall, and shall cause its Subsidiaries to, conduct their use reasonable best efforts to cause the business of it and its Subsidiaries to be conducted in the ordinary course consistent with past practice of business and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its SubsidiariesSubsidiaries to, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, employees and business associates. Without limiting Notwithstanding the generality of the foregoing foregoing, and in furtherance thereof, from subject to the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as exceptions set forth in Section 6.1 clauses (w), (x), (y) and (z) of the Company Disclosure Letterimmediately preceding sentence, the Company will shall not and will cause shall not permit its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, the certificate of incorporation, bylaws or other applicable comparable governing documentsdocuments of the Company or any of its Subsidiaries;
(ii) mergeacquire (by merger, enter into consolidation, acquisition of stock or assets or otherwise) any scheme of arrangement or bid conduct agreement corporation, partnership or other similar arrangementbusiness organization or any property or assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $5 million in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been made available to Parent prior to the date of this Agreement;
(iii) merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer or transfer of encumbrance of, any shares of capital stock or securities convertible, exchangeable or exercisable therefor (collectively, “Equity Interests”) of the Company (including Ordinary Shares) or any of its Subsidiaries or (including any Company Securities Stock Options, Company Restricted Stock, Stock Appreciation Rights, Performance Share Units, Phantom Stock Units, Phantom Stock Appreciation Units, Time Stock Appreciation Rights or Other Subsidiary Securities (other than Performance Stock Appreciation Rights), except issuances or dispositions of (A) the issuance of Ordinary Shares upon the vesting of pursuant to Company RSUs (and dividend equivalents thereonStock Options, if applicable) Stock Appreciation Rights or Performance Share Units outstanding prior to on the date hereofof this Agreement under the Company Plans, (B) Shares in connection with the issuance matching of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods contributions under the Company ESPP)Company’s 401(k) Plans, (C) Shares or options or rights to acquire Shares in connection with the Comcast Warrants grants or Charter Warrants (including exercise thereof), each as awards of stock based compensation made in effect as of the date accordance with Section 6.1(a)(ix) hereof or (D) Equity Interests pursuant to the issuance Rights Agreement;
(v) declare, set aside, establish a record date for, or transfer pay any dividends on or make any other distributions (whether payable in cash, stock, property or a combination thereof) in respect of common stock or any of the capital stock, other equity interests by a than any dividends from any wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceCompany;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeemsubdivide, purchase repurchase, redeem or otherwise acquire, directly or indirectly, any of its capital stockthe Equity Interests, Company Securities except for (A) redemptions, purchases or any Other Subsidiary Securities (other than acquisitions pursuant to the acquisition of any Ordinary Shares tendered by current exercise or former employees or directors in order to pay Taxes in connection with the vesting settlement of Company RSUs)Stock Options, Stock Appreciation Rights, Performance Share Units, employee severance, retention, termination, change of control and other contractual rights existing on the date of this Agreement on the terms in effect on the date of this Agreement, including with respect to Company Restricted Stock or (B) pursuant to the Rights Agreement;
(viiivii) incur except as contemplated by the terms of this Agreement, including pursuant to Section 6.18, (A) incur, issue or modify in any material respect the terms of any Indebtedness for borrowed money, or guarantee such Indebtedness of another Person assume, prepay, (except with respect as required pursuant to obligations the terms of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesIndebtedness currently outstanding), defease, cancel, acquire, guarantee or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the indebtedness of any Person, (B) issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its SubsidiariesSubsidiaries or (C) assume, except for (A) Indebtedness guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (whicheach case, for the avoidance of doubt, shall be governed excluding trade payables, capitalized lease obligations, or obligations issued or assumed as consideration for services or property, including inventory), except for (1) Indebtedness incurred under the Second Amended and Restated Loan and Guaranty Agreement, dated August 16, 2011, by Section 6.1(a)(xiiand among Collective Brands Financial, Inc., the Guarantors signatory thereto, the Lenders signatory thereto, ▇▇▇▇▇ Fargo Retail Finance, LLC and Citigroup Global Markets, Inc. (the “Revolving Credit Facility”), (2) letters of credit issued pursuant to the Revolving Credit Facility or otherwise issued in the ordinary course of business, (3) interest rate and subject to Section 6.17, settle or compromise other hedging arrangements on customary commercial terms in the ordinary course of business and (4) Indebtedness owed by any litigation, audit, claim, action or other Proceedings against controlled Subsidiary of the Company or any of to the Company; provided that the Company and its Subsidiaries shall not materially increase or decrease any intercompany payables or receivables except at or in connection with the Closing as contemplated by or required to accomplish the Carveout Transaction;
(viii) grant or incur any Lien material to the Company and its Subsidiaries, other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or Permitted Encumbrances; (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (pledges or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed deposits by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business under workmen’s compensation Laws, unemployment insurance Laws or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement similar Laws; (C) good faith deposits in connection with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien Contracts (other than a Permitted Lien), surrender, divest, cancel, abandon or allow for the payment of Indebtedness) to lapse or expire or otherwise dispose of any assets, product lines or businesses of which the Company or its Subsidiaries, with a value in excess one of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries is a party, in each case, in the ordinary course of business; (D) Liens that may be incurred or granted pursuant to or in accordance with the terms of any Indebtedness in effect as of the date hereof, in connection with any Indebtedness permitted pursuant to Section 6.1(a)(vii) or (BE) any abandonment pursuant to licenses or sublicenses of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries granted in the ordinary course of business;
(xivix) except as required pursuant to agreements in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (A) grant, increase pay or provide agree to pay any retention, change of control, severance or termination payments or any benefits to any current or former director, consultant officer or employee of the Company or any of its Subsidiaries, exceptexcept in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice, (B) increase the compensation or bonus (or grant, pay or agree to pay bonuses) to any current or former director, officer or employee of the Company or any of its Subsidiaries, except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice, (C) increase pensions or welfare benefits of any current or former director, officer or employee of the Company or any of its Subsidiaries, except in the case of employees who are not executive officers of the Company, in the ordinary course of business, (D) establish, adopt, terminate or materially amend any Company Plan or materially amend the terms of any Equity Awards, or enter into any new, or amend any existing change in control arrangements or retention, retirement or similar agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries, (E) accelerate the vesting or payment of or take action to fund, any compensation payable or benefits to become payable or provided to any current or former director, officer or employee of the Company or any of its Subsidiaries, except as otherwise provided in this Agreement, (F) enter into any new, or amend any existing, employment agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice and with an annual base salary and incentive compensation opportunity not to exceed $175,000 or as required by agreements(G) grant or make any equity awards that may be settled in Shares, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits ofpreferred shares, or make, grant any Equity Interest or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee other securities of the Company or any of its Subsidiaries, except or the value of which is linked directly or indirectly, in whole or in part, to the price or value of any Shares, preferred shares, Equity Interests or other Company securities or Subsidiary securities;
(1x) in the case of employees or consultants who are not executive officers of the Company, other than in the ordinary course of business consistent with past practice business, (A) make or as is not change any material in Tax election, (B) change the aggregate and (2) in the case of employees who are executive officers Company’s or any Subsidiary of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practicemethod of accounting for Tax purposes, (C) file any material amended Tax Return, (D) settle, concede, compromise or abandon any material Tax claim or assessment, (E) surrender any right to a refund of material Taxes or (F) consent to any extension or waiver of the limitation period applicable to any claim or assessment with respect to material Taxes;
(xi) except as required by Law GAAP, a Governmental Entity or as required by agreementsapplicable Law, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend make any Benefit Plan (other than routine material changes to welfare plans accounting policies or the Pension Plan made principles;
(xii) except in the ordinary course of business consistent with past practicebusiness, make any loans, advances or capital contributions to, or investments in, any Person, other than (i) to or accelerate in the vesting Company or payment of to or in any compensation direct or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination indirect controlled Subsidiary of the Arris Group, Inc. Pension Plan as contemplated on the date hereof Company or (yii) to or in franchise partners or wholesale customers;
(xiii) (A) enter into any Contract that would have been a Company Material Contract pursuant to the terms thereof as in effect on the date hereofsubsections (C), (D), (E), (F), (G), (J), (K) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (EM) of Section 5.1(q)(i) had it been entered into prior to the date of this Agreement, (B) terminate, materially amend or waive any material rights under any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement, in each case in a manner materially adverse to the Company and its Subsidiaries, excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract, or (C) except as required by Lawin the ordinary course of business, establishwaive any material default under, adoptor release, enter into settle or amend compromise any collective bargaining agreementmaterial claim against the Company or liability or obligation owing to the Company, labor union, plan, trust, fund, policy or arrangement for the benefit of under any current or former directors, consultants, officers or employees or any of their beneficiariesCompany Material Contract; provided, howeverin each case, that notwithstanding anything the Company and its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiv) transfer, sell, lease, license, assign, mortgage, pledge, divest or otherwise dispose of any entity or material assets, product lines, rights or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, in each case having a current value of $2,000,000 individually or $5,000,000 for all such transactions in the aggregate, other than (A) inventory, supplies and other assets in the ordinary course of business, (B) pursuant to Contracts in effect prior to the contrary date of this Agreement that have been made available to Parent prior to the date of this Agreement or (C) pursuant to licenses or sublicenses of Intellectual Property granted in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent ordinary course of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsbusiness;
(xv) grant a license except for the expenditures contemplated by the capital budgets set forth in Section 6.1(a)(xv) of the Company Disclosure Letter or for expenditures required by Law or in response to casualty loss or property damage, make or authorize any material Intellectual Property owned by capital expenditures;
(xvi) other than pursuant to Section 6.16, waive, release, settle or compromise any pending or threatened litigation, arbitration, claim (excluding ordinary course disputes with vendors in which no litigation or arbitration commences) or action against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, arbitration, claim or action (A) where the amount paid in an individual settlement or compromise by the Company (and not including any amount paid by the Company’s insurance carriers or third parties) does not exceed $1,000,000 individually or $5,000,000 in the ordinary course of business consistent with past practice;
aggregate or (xviB) allow any lapse or abandonment of that would impose any material Intellectual Property, restrictions on the business or any registration or grant thereof, or any application related thereto to which, or under which, operations of the Company or its Subsidiaries; provided that the foregoing clause (A) will not restrict the Company’s ability to settle any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof ordinary course claim involving a settlement amount not in the exercise excess of its reasonable business judgment$100,000;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew adopt or enter into any non-compete a plan of complete or exclusivity agreement that would restrict partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or limit, in any material respect, the operations other reorganization of the Company or any of its Subsidiaries;
(axviii) other than new Contracts with customers or suppliers fail to maintain in full force and effect material insurance policies covering the ordinary course of business Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice, enter into any Contract unless the Company determines in its reasonable commercial judgment that would have been a Material Contract had it been entered into prior to this Agreement the form or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms amount of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)should be modified; or
(xxvxix) agree, authorize or commit to do any of the foregoingforegoing actions or enter into any letter of intent (binding or non-binding) or similar agreement or arrangement with respect to any of the foregoing actions.
(b) Neither Buyer Parent nor Company Merger Sub shall knowingly take or permit any of their Subsidiaries Affiliates to take any action that is could reasonably likely be expected to prevent or materially interfere with impede the consummation of the Merger, the Carveout Transaction or the other transactions contemplated by this Agreement and the Carveout Transaction Agreement.
(c) The Company shall use its reasonable efforts Nothing contained in this Agreement is intended to cause give Parent or Merger Sub, directly or indirectly, the right to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth control or direct the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended or its Subsidiaries’ operations prior to the Closing Date)Effective Time, certifying that and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Affiliates’ operations. Prior to the Effective Time, each such Subsidiary does not own any U.S. real property iof Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 2 contracts
Sources: Merger Agreement (Wolverine World Wide Inc /De/), Merger Agreement (Collective Brands, Inc.)
Interim Operations. (a) Except Between the date of this Agreement and the Closing Date or the earlier termination of this Agreement, except as (x) set forth on Schedule 7.1 or as contemplated by this Agreement, unless Buyer has previously consented in writing or as required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shallAcquired Companies will, and shall TAT and Sellers will cause its Subsidiaries the Acquired Companies to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, (ii) use commercially reasonable efforts to preserve (A) present business operations, organization (including employees, but specifically excluding officers and directors) and goodwill and (B) present relationships with suppliers and customers having business dealings with the Acquired Companies and (iii) maintain all assets and properties of, or used by, the Acquired Companies in their current condition (ordinary wear and tear excepted). Without limiting the foregoing, between the date of this Agreement and the Closing Date or the earlier termination of this Agreement, except as set forth on Schedule 7.1 or as contemplated by this Agreement, unless Buyer has previously consented in writing, N. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 3rd or ▇▇▇▇▇▇ ▇▇▇▇▇ has previously directed (within their existing authority) or requested, in each case in writing, or as required by applicable Law, no Acquired Company shall, nor shall TAT or Sellers permit any Acquired Company to, do any of the following:
(a) incur any indebtedness for borrowed money or issue any long-term debt securities or assume, guarantee or endorse such obligations of any other Person, except for indebtedness incurred in the ordinary course of business under lines of credit existing on the date hereof;
(b) except in the ordinary course of business, (i) acquire any material property or assets, (ii) mortgage or encumber any material property or assets other than Permitted Liens, or (iii) cancel any debts owed to or claims held by the Acquired Companies;
(c) other than in the ordinary course of business, enter into, amend, modify or terminate any Material Contract;
(d) (i) enter into, adopt, amend or terminate any agreement relating to the compensation, bonus, benefits provided to or severance of any employee of, or any employee to be transferred at Closing to, any Acquired Company or (ii) terminate without cause the employment of any employee of, or any employee to be transferred at Closing to, any Acquired Company, in each case other than in the ordinary course of business, except to the extent required by Law or any existing agreements;
(e) make any material change to the Acquired Companies’ accounting (including Tax accounting) methods, principles or practices, except as may be required by GAAP or changes in Law;
(f) make any amendment to any Acquired Company’s Organizational Documents;
(g) issue or sell any capital stock or options, other equity securities, warrants, calls, subscriptions or other rights to purchase any capital stock or other equity securities of any Acquired Company of any of its Subsidiaries or split, combine or subdivide the capital stock or other equity securities of an Acquired Company or any of its Subsidiaries;
(h) (i) make, change or revoke any material Tax election, settle or compromise any material Tax claim or liability or enter into a settlement or compromise, or change (or make a request to any taxing authority to change) any material aspect of its method of accounting for Tax purposes, in each case with respect an Acquired Company, (ii) enter into any Contract that would material closing agreement, or consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes or (iii) prepare or file any Tax Return related an Acquired Company (or any amendment thereof) unless such Tax Return shall have been prepared in a Material Contract had it been entered into manner consistent with past practice and Sellers shall have provided Buyer a copy thereof (together with supporting papers) at least ten Business days prior to the due date thereof for Buyer to review and approve (such approval not to be unreasonably withheld or delayed);
(i) take any action which would materially and adversely affect the ability of the parties to consummate the transactions contemplated by this Agreement; or
(j) agree to take any of the actions described in sub-clauses (a) through (i) above. Nothing contained in this Section 7.1 or elsewhere in this Agreement shall preclude any Acquired Company, in the Acquired Company’s sole discretion, from making distributions to its equity holder(s) prior to the Effective Date, and from and after the Effective Date, no Acquired Company shall make any distributions of cash or (bother assets to its equity holder(s) other than but shall not be prohibited from making cash management transfers related to expenses of the Acquired Companies paid directly by TAT or any Seller in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoingpractices.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Stock Purchase Agreement (Transatlantic Petroleum Ltd.), Stock Purchase Agreement (Transatlantic Petroleum Ltd.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the The Company Disclosure Letter, the Company covenants and agrees that, after during the period from the date hereof and until of this Agreement through the earlier of the Effective Time Closing or the termination of this Agreement in accordance with its terms Agreement, except (unless Buyer 1) to the extent Parent shall otherwise approve give its prior consent in writing, such approval writing (which consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (2) as set forth in Part 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly required by this Agreement, the Company shall, and shall cause its the Company Subsidiaries to, conduct their its business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill use commercially reasonable efforts to maintain and preserve intact its business organization, keep available the services of key employees and maintain satisfactory relationships with Governmental Entities, customers, suppliers, employees suppliers and business associatesdistributors. Without limiting the generality of foregoing, during the foregoing and in furtherance thereof, period from the date of this Agreement until through the earlier of the Effective Time Closing or the termination of this Agreement in accordance with its termsAgreement, except (1) to the extent Parent shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(a) of the Company Disclosure Schedule, (A3) as may be required by applicable Law Legal Requirements or (4) as contemplated by the Scheme Document Annex, (B) otherwise expressly permitted or required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the shall not (and shall not permit any Company will not and will cause its Subsidiaries not Subsidiary to:):
(i) amend the Company’s Organizational Documents or otherwise changethe Organizational Documents of any Company Subsidiary (other than any amendment to the Organizational Documents of any Company Subsidiary that would not reasonably be expected to be adverse to Parent or to impair, prevent or authorize or propose to amend or otherwise change its articles delay the consummation of association, certificate any of incorporation, bylaws or other applicable governing documentsthe transactions contemplated hereby);
(ii) mergesplit, enter into combine, subdivide, amend the terms of or reclassify any scheme shares of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesCompany’s capital stock;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property stock or otherwise, property) with respect to any shares of its shares the Company’s capital stock or the capital stock of any Company Subsidiary, other equity interests than (except for cash A) the Company’s regular quarterly dividend on the Company Common Stock to be declared and paid in the first quarter of the Company’s 2021 fiscal year only, in a quarterly amount not to exceed the amount set forth in Part 4.1(a)(iii) of the Company Disclosure Schedule, or (B) dividends or distributions paid by any direct or indirect wholly owned Company Subsidiary to the Company or to any other direct or indirect another wholly owned Subsidiary in of the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsCompany;
(viiiv) reclassifyacquire (by merger, splitconsolidation, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of stock or assets, formation of a joint venture or otherwise) (A) any Ordinary Shares tendered other Person, (B) any equity interest in any other Person, (C) any business, or (D) any assets, except, (1) acquisitions by current the Company from any wholly owned Subsidiary or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur among any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for Company; (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A2) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate purchase of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof andequipment, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales supplies and non-exclusive licenses of products and services of the Company and its Subsidiaries inventory in the ordinary course of business, (B3) any abandonment inbound licenses of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (Analog Devices Inc), Merger Agreement (Maxim Integrated Products Inc)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof of this Agreement and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the Company shall, business of it and shall cause its Subsidiaries to, conduct their business shall be conducted in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, creditors, lessors, employees and business associatesassociates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (CB) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld, delayed withheld or conditioneddelayed) or (DC) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause not permit its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend any change in its Certificate of Formation or otherwise change its articles of association, certificate of incorporation, bylaws By-Laws or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, except for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any of agreements or arrangements imposing material changes or restrictions on its Subsidiariesassets, operations or businesses;
(iii) acquire (by mergerassets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $250,000 in any transaction or series of related transactions, scheme other than acquisitions pursuant to Company Contracts in effect as of arrangement, consolidation, acquisition the date of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementthis Agreement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary in the ordinary course Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of business and in a manner that would not have such capital stock, or any material Tax consequences)options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) make create or forgive incur any loans, advances or capital contributions Lien material to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course or any of business and in a manner that would its Subsidiaries not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, incurred in the ordinary course of business consistent with past practice, except for any Permitted Liens;
(vi) (A) make any loan or loan commitment to any Person which would, when aggregated with all outstanding loans or loan commitments or any renewals or extensions thereof made to such Person and any Affiliate or immediate family member of such Person, exceed $500,000 or (B) purchase or sell any loan or loan participation, individually or in bulk, in one or a series of related transactions in excess of $500,000 in the aggregate, in each case, without first informing the deputy chief credit officer of Hanmi Bank two (2) full Business Days prior to taking such action and considering in good faith his views and receiving the approval of United Central Bank’s Chief Executive Officer, at a minimum, and any committee as required by United Central Bank’s current loan authority policy and administration. Neither the Company nor any of its Affiliates shall forgive any loans to directors, officers or employees;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to or declare or make any distribution on, any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly wholly-owned Subsidiary in the ordinary course of business consistent with past practiceSubsidiary) or enter into any agreement with respect to the voting of its capital stock or other equity interestsstock;
(viiviii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof which are listed on Section 6.1(a)(viii) of the Company Disclosure Letter, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plans, other than routine amendments to health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) grant any salary or wage increase, other than annual increases in salary and wages for employees who are not officers by no more than 5% in the aggregate in the ordinary course of business consistent with past practice, (C) pay any bonus or incentive compensation in excess of the amount earned based on actual performance, (D) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (E) set any bonus metrics or targets, (F) pay any severance in excess of payments by the Company or its Subsidiaries made in the ordinary course of business consistent with past practice, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP (I) hire any employee or consultant with annualized cash compensation opportunities in excess of $150,000, other than to fill vacancies of persons who are not officers or (J) terminate any officer or other person with an annual compensation opportunity in excess of $150,000 other than for “cause”;
(ix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities stock or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any shares of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwisestock;
(x) make incur any material changes with respect to any method of Tax indebtedness for borrowed money or financial accounting policies assume, guarantee, endorse or procedures, except otherwise as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, an accommodation become responsible for the avoidance long-term indebtedness of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries Person (other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or deposits and similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, liabilities in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers indebtedness of the Company, in ’s Subsidiaries to the ordinary course of business consistent with past practice or as is not material in the aggregate Company and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on short term advances from the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made Federal Home Loan Bank in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan );
(except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (Exi) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary set forth in the foregoing clauses (A)-(E), capital budgets set forth in Section 6.1(a)(xi) of the Company shall notDisclosure Letter and consistent therewith, and shall not permit make or authorize any Subsidiary, without capital expenditure in excess of $250,000 in the prior written consent of Buyer, to issue aggregate during any new Company RSUs twelve (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity12) or other equity-based or equity-related awards or other similar arrangementsmonth period;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xviixii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract contract that would have been a Material Contract had it been entered into prior to this Agreement Agreement;
(xiii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(xiv) enter into any settlement, compromise or similar agreement with respect to, any action, suit, proceeding, order or investigation before a Governmental Authority, individually or with respect to multiple actions, suits, proceedings, orders or investigations arising generally out of the same set of facts or circumstances, for an amount greater than $250,000 in excess of applicable and confirmed insurance coverage or specific loss reserves reflected on the Company Interim Financial Statements, or any obligation or liability of the Company in excess of such amount, or would impose any material restriction on the business of Parent or the Surviving Corporation or create adverse precedent for claims that are reasonably likely to be material to Parent, the Company or the Surviving Corporation;
(xv) amend, modify or terminate any Material Contract, or cancel, modify or waive any material debts or claims held by it or waive any rights having in each case a value in excess of $500,000 other than any loan restructures or workouts in the ordinary course of business and following prior consultation with the deputy chief credit officer of Hanmi Bank;
(xvi) sell, transfer, lease, license, guarantee, mortgage, pledge, encumber or otherwise create any Lien on, dispose of or discontinue any of its assets, deposits, business or properties (other than sales of loans and loan participations pursuant to Section 6.1(a)(vi)) except in the ordinary and usual course of business consistent with past practice and in a transaction that, together with all other such transactions, is not material to the Company and its Subsidiaries, taken as a whole;
(xvii) except as required by applicable Law or the Federal Reserve Board, the FDIC, the CDBO or the TDB, (A) implement or adopt any material change in its interest rate and other risk management policies, procedures or practices, (B) fail to follow in all material respects, the Company’s or its applicable Subsidiary’s existing policies or practices with respect to managing its exposure to interest rate and other risk or (bC) fail to use commercially reasonable efforts to avoid any material increase in the Company’s aggregate exposure to interest rate risk;
(xviii) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xix) (A) other than in accordance with the Company’s or any of its Subsidiaries’ investment policies in effect on the date hereof or in securities transactions as provided in (B) below, make any investment either by contributions to capital, property transfers or purchase of any property or assets of any Person or (B) other than purchases of direct obligations of the United States of America or obligations of United States government agencies which are entitled to the full faith and credit of the United States of America, in any case with a remaining maturity at the time of purchase of one year or less, purchase or acquire securities of any type; provided, however, that the Company shall notify Parent of the purchase of any investment security in writing within one (1) Business Day after such purchase, and such notice shall describe in detail the investment securities purchased and the price thereof), and provided, further, that the Company shall consult with Parent from time to time regarding the Company’s investment securities policies and consider in good faith the views of Parent with respect thereto.
(xx) (A) commence or settle any litigation or proceeding with respect to any liability for material Taxes, take any action which is reasonably likely to have an adverse impact on the Tax position of the Company or, after the Merger, which is reasonably likely to have an adverse impact on the Tax position of Parent or the Surviving Corporation, (B) except in the ordinary and usual course of business consistent with past practice, make or change any material express or deemed Tax election, file any amended Tax Return or change any of its methods of reporting income or deductions for Tax purposes or (C) take any other action with respect to Taxes that is outside the ordinary and usual course of business or inconsistent with past practice;
(xxi) make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility of it or any of its Subsidiaries;
(xxii) enter into any new line of business or, other than in the ordinary course of business consistent with past practice or expirations of practice, change in any such Contract material respect its lending, investment, underwriting, risk and asset liability management and other banking and operating, securitization and servicing policies, as applicable (including any change in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) maximum ratio or similar interests limits as a percentage of its capital exposure applicable with respect to its loan portfolio or rightsany segment thereof), except as required by applicable Law or policies imposed by any Governmental Authority; or
(xxvxxiii) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Prior to making any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Parent shall not knowingly take or permit any of their its Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this AgreementMerger.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Hanmi Financial Corp), Merger Agreement (Hanmi Financial Corp)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company The Debtor covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, prior to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsClosing, except (i) as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required or contemplated by this Agreement or the Original Plan Sponsor Agreement, (Cii) Buyer as QCP and ProMedica may approve in writing (such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (iii) as otherwise required by applicable Laws or (Div) as set forth in Section 6.1 4.1 of the Company Debtor Disclosure Letter, the Company Business shall be conducted in the ordinary and usual course and, to the extent consistent therewith, the Debtor and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations intact, preserve governmental licenses, permits, consents, approvals, authorizations and qualifications and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates, and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Closing, except (i) as otherwise expressly required or contemplated by this Agreement or the Original Plan Sponsor Agreement, (ii) as QCP and ProMedica may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (iii) as otherwise required by applicable Laws or (iv) as set forth in Section 4.1 of the Debtor Disclosure Letter, the Debtor will not and will cause not permit any of its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws incorporation or by-laws or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Debtor or any of its Subsidiaries with any other Person Person, or restructure, reorganize or completely or partially liquidate the Company Debtor or any of its SubsidiariesSubsidiaries or otherwise enter into any agreements providing for the sale of their respective material assets, operations or business (other than (A) the sale or disposition of obsolete or worn-out assets in the ordinary course of business and (B) sales and dispositions of such facilities and related assets as are contemplated by the SNF/AL Remarketing Process (as defined in the Original Plan Sponsor Agreement));
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $1,000,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement which have been provided to ProMedica and QCP prior to the date of this Agreement;
(by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwiseiv) acquire any corporation, partnership or other business organization or any division thereof or collection of assets constituting all or substantially all of a division business or business line unit, whether by merger or consolidation, purchase of any Person substantial assets or equity interest or any equity interests of other manner, from any Person or enter into any joint venture or similar arrangementother Person;
(ivv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) Debtor or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly wholly-owned Subsidiary of the Company Debtor to the Company Debtor or another wholly wholly-owned Subsidiary in Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than such dispositions as are contemplated by the ordinary course of business and in a manner that would not have any material Tax consequences)SNF/AL Remarketing Process;
(vvi) create or incur any Lien securing indebtedness for borrowed money (other than a Lien currently provided for under the Centerbridge Facility, any Permitted Lien (other than a Permitted Lien under clause (iv) of such definition) and/or the grant of any cash collateral in respect of letters of credit issued in respect of, or otherwise securing, ordinary course operating liabilities) on any assets of the Debtor or any of its Subsidiaries having a value in excess of $1,000,000 in the aggregate;
(vii) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to the Debtor or any direct or indirect wholly wholly-owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceDebtor);
(viviii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company Debtor or to any other direct or indirect wholly wholly-owned Subsidiary in the ordinary course of business consistent with past practiceSubsidiary) or enter into any agreement with respect to the voting of its capital stock or (other equity intereststhan the Original Restructuring Support Agreement and the Alternative Restructuring Support Agreement);
(viiix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viiix) incur any Indebtedness indebtedness for borrowed money (which, for the avoidance of doubt, shall not include obligations in respect of cash-collateralized letters of credit issued in respect of, or other grants of cash collateral securing, ordinary course operating liabilities) or guarantee such Indebtedness indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company Debtor or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice (A) Indebtedness for borrowed money under not to exceed $2,000,000 in the revolving facility under the Company Credit Agreementaggregate, (B) loans or advances to wholly guarantees incurred in compliance with this Section 4.1 by the Debtor of indebtedness of wholly-owned Subsidiaries and of the Debtor or (C) other Indebtedness in an amount not indebtedness owed to exceed an aggregate principal amount the Debtor or another wholly-owned Subsidiary of $15 millionthe Debtor;
(ixxi) shall not except as set forth in the capital expenditures budget set forth in Section 4.1(a)(xi) of the Debtor Disclosure Letter, make or authorize or make any capital expenditures expenditure in excess of $40 million 2,000,000 in the aggregate, except excluding any capital expenditure required by any Contract set forth on Section 4.1(a)(xi) of the Debtor Disclosure Letter or capital expenditure determined in good faith by the Debtor Board to be required for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter protection of, or to avoid injury to, any Person, (B) expenditures made in response to the care or safety of any emergency, whether caused patient under the care of any facility operated by war, terrorism, weather events, public health events, outages, operational incidents the Debtor or otherwiseany of its Subsidiaries or (C) compliance with Law;
(xxii) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than such Contracts as are contemplated by the SNF/AL Remarketing Process;
(xiii) make any material changes with respect to any method of Tax or financial material accounting policies or procedures, except as required by changes in GAAP or applicable Law or GAAP;
(xiv) settle any litigation or other Proceeding brought against the Debtor or its Subsidiaries by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where Entity (A) the for an amount paid in settlement or compromise does not exceed excess of $25 million 100,000 individually or $100 million 1,000,000 in the aggregate for all such Proceedings (including other than any resolution of claims processing for such purpose a reasonable estimate government reimbursement in the ordinary course of anticipated royalties or similar obligationsbusiness, and excluding recoupment actions) or (B) in a manner that would impose any restrictions on its assets, operations or businesses or result in any injunction or equitable relief against the Debtor or any of its Subsidiaries;
(xv) settle any Proceeding other than against or brought by a Governmental Entity, (A) for an amount paid in settlement does not exceed the amount reserved against such matter excess of $500,000 individually or $8,000,000 in the most recent financial statements aggregate for all such Proceedings in any one-calendar-month period (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement with respect to Proceedings in the state of Pennsylvania, net of applicable insurance proceeds) or compromise does not include (B) in a manner that would impose any criminal liabilityrestrictions on its assets, material injunctive operations or businesses or result in any injunction or equitable relief or obligation to be performed by against the Company Debtor or any of its Subsidiaries other than the payment of money damagesSubsidiaries;
(xiixvi) amend, modify or terminate any Material Contract, including the Centerbridge Facility, in a manner adverse to the Debtor or its Subsidiaries;
(xvii) (A) change in any material respect any material method of accounting of the Debtor or its Subsidiaries for Tax purposes; (B) enter into any agreement with any Governmental Entity (including a “closing agreement” under Code Section 7121) with respect to any material Tax or Tax Returns of the Debtor or its Subsidiaries; (C) surrender a right of the Debtor or its Subsidiaries to a material Tax refund; (D) change an accounting period of the Debtor or its Subsidiaries with respect to any material Tax; (E) file an amended Tax Return; (F) change or revoke any material election with respect to Taxes; (G) make any material election with respect to Taxes that is inconsistent with past practice; (H) file any Tax Return that is inconsistent with past practice; or (I) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment (other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Taxbusiness);
(xiiixviii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, divest, cancel, abandon or allow to lapse or expire divest or otherwise dispose of any assetsmaterial tangible or intangible assets (including Intellectual Property Rights), licenses, operations, rights, product lines lines, businesses or businesses interests therein of the Company Debtor or its Subsidiaries, with a value in excess including the capital stock of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1A) in the case of employees or consultants who are not executive officers of the Company, connection with services provided in the ordinary course of business consistent and sales or other dispositions of obsolete or worn-out assets, (B) sales, leases, licenses, divestitures, cancellations, abandonments, lapses, expirations or other dispositions of assets with past practice or as is a fair market value not material in excess of $500,000 in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practiceaggregate, (C) except as required by Law or as required by agreements, plans, programs or arrangements pursuant to Contracts in effect on prior to the date hereofof this Agreement and (D) such sales, establishleases, licenses, divestitures, cancellations, abandonments, lapses, expirations or other dispositions of assets as are contemplated by the SNF/AL Remarketing Process;
(xix) (A) enter into, adopt, amend in any material respect or terminate or amend any Benefit Company Plan (other than routine changes entry into any new employment agreement with any individual whose hiring is not restricted by, or who is otherwise hired in accordance with, clause (H) below), (B) increase or accelerate the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any director, officer or employee of the Debtor or any of its Subsidiaries, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company Plan (other than grants of any new awards to welfare plans any individual whose hiring is not restricted by, or the Pension Plan made who is otherwise hired in the ordinary course of business consistent with past practiceaccordance with, clause (H) or below), (D) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or equity for the benefit of benefits under any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof)Company Plan, (DE) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Company Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit terms of any current existing Company Plan set forth on Section 2.1(h)(i) of the Debtor Disclosure Letter or former directorsGAAP, consultants(F) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any director, officers officer or employees employee of the Debtor or any of their beneficiaries; providedits Subsidiaries, however(G) terminate the employment of any officer of the Debtor or its Subsidiaries other than for “cause”, that notwithstanding anything (H) hire (x) any officer of the Debtor or its Subsidiaries with a title of Vice President or higher or (y) any employee of the Debtor or its Subsidiaries with aggregate annual base salary and target bonus of more than $250,000, except, in the case of the foregoing clauses (x) and (y), to the contrary extent jointly determined by the Chief Restructuring Officer of the Debtor (“CRO”) and the Debtor Board in their reasonable business judgment in good faith necessary in the interests of patient care (any such individual described in the foregoing clauses (A)-(Ex) and (y) and hired to replace any such employee, a “New Hire”), provided that (i) any such officer New Hire (and his or her terms and conditions of employment, including any base and target incentive compensation) hired pursuant to this clause (H) shall be reasonably acceptable to ProMedica and QCP and (ii) the terms and conditions of employment of any New Hire that is not an officer, including base and target incentive compensation, shall be subject to notice and consultation with ProMedica and QCP, or (I) make any incentive payment or payment in respect of severance or any nonqualified deferred compensation entitlement to any current or former director, officer or employee of the Debtor or its Subsidiaries (including making any payments to any rabbi trust or taking any action that would cause the trustee of any rabbi trust to make payments to any current or former director, officer or employee of the Debtor or its Subsidiaries), except, with respect to clause (I) payment of any nondiscretionary incentive payments under existing Company shall notPlans, nondiscretionary severance payments under existing Company Plans, and shall not permit any Subsidiary, without nondiscretionary payments of nonqualified deferred compensation (other than as set forth on Section 4.1(a)(xix)(I) of the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equityDebtor Disclosure Letter) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license as otherwise required by applicable Law; provided that payment in respect of any material Intellectual Property owned by the Company severance or any nonqualified deferred compensation amount in excess of its Subsidiaries other than $200,000 shall be subject to prior notice and consultation with ProMedica and QCP and, with respect to clauses (A) through (H) above, (1) amendments to welfare plans in the ordinary course of business business, consistent with past practice;
practices that do not materially increase the costs of such welfare plans, (xvi2) allow with respect to any lapse hourly employees and salaried facility-level employees of the Debtor or abandonment its Subsidiaries, and any other employees of any material Intellectual Propertythe Debtor or its Subsidiaries whose annual base salary does not exceed $150,000, increases in compensation in the ordinary course materially consistent with the Debtor’s 2018 operating budget or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made otherwise as reasonably determined by the Company or any Subsidiary thereof CRO, in the exercise of its reasonable business judgment;
consultation with ProMedica and QCP, to be necessary to respond to market demand, (xvii3) enter into any transaction with any Affiliate respect to each other employee of the Company Debtor or its Subsidiaries whose annual base salary exceeds $150,000 (other than any of its Subsidiaries Eligible Employee), increases in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than compensation in the ordinary course of business consistent with past practice or expirations that do not exceed 1.5% of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms aggregate annual base salaries of such Contractother employees or 7.5% of the annual base salary for any individual and (4) as required pursuant to existing Company Plans, or as otherwise required by applicable Law;
(xx) become a party to, establish, adopt, amend, modifycommence participation in or terminate any collective bargaining agreement or other agreement with a labor union, supplement, waive, terminate, assign, convey, subject works council or similar organization;
(xxi) enter into any Contract adversely affecting in any material respect the Debtor’s or any of its Subsidiaries’ ability to a Lien use or otherwise transfer, exploit any material Intellectual Property Rights;
(xxii) fail to use commercially reasonable efforts to keep in whole or in part, rights or interest pursuant to or in any Material Contractfull force the material Insurance Policies under substantially the same levels of coverage as the current policies of the Debtor and its Subsidiaries;
(xxiii) other than renewals change in any material respect any of the ordinary course Debtor’s or its Subsidiaries’ material policies or procedures for or timing of business, amend, modify, terminate, cancel or let lapse a material insurance policy the collection of accounts receivable (or reinsurance policy) any other trade receivables), payment of accounts payable (or self-insurance program any other trade payables), billing of the Company its customers, pricing and payment terms, cash collections, cash payments or its Subsidiaries in effect as of the date hereof, unless simultaneous terms with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programssuppliers, in each case, providing coverage equal to or greater other than the coverage under the terminatedchanges required by suppliers, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force vendors and effectservice providers;
(xxiv) not exercise dismiss the QCP Consultants other than in accordance with Section 5.1(b);
(xxv) modify or amend in any rights under Section 5 respect any Contract pursuant to which HCR III or Section 6 any of its Subsidiaries currently subleases real property to any other Subsidiary of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Debtor; or
(xxvxxvi) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company ProMedica shall not knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property itake
Appears in 2 contracts
Sources: Alternative Plan Sponsor Agreement, Alternative Plan Sponsor Agreement (Quality Care Properties, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by From the date of this Agreement or (z) otherwise until the Effective Time, except as set forth in Section 6.1 6.2 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement unless Purchaser has consented in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)writing thereto, the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose conduct its operations according to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
; (viii) declareuse its reasonable best efforts to preserve intact its business organizations and goodwill, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any keep available the services of its shares officers and employees, and maintain satisfactory relationships with those persons having business relationships with them; (iii) upon the discovery thereof, promptly notify Purchaser of the existence of any breach of any representation or other equity interests warranty contained herein (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or, in the ordinary course case of business consistent with past practiceany representation or warranty that makes no reference to Material Adverse Effect, any breach of such representation or warranty in any material respect) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition occurrence of any Ordinary Shares tendered by current event that would cause any representation or former employees warranty contained herein no longer to be true and correct (or, in the case of any representation or directors warranty that makes no reference to Material Adverse Effect, to no longer be true and correct in order any material respect); and (iv) promptly deliver to pay Taxes in connection Purchaser true and correct copies of any report, statement or schedule filed with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior SEC subsequent to the date hereof andof this Agreement, in each case, such settlement any internal monthly reports prepared for or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or delivered to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount Board of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund Directors after the date hereof and monthly financial statements for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in for and as of each month end subsequent to the ordinary course date of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;this Agreement.
(xivb) (A) grantFrom and after the date of this Agreement until the Effective Time, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee except as set forth in Section 6.2 of the Company or any of its SubsidiariesDisclosure Letter, except, unless Purchaser has consented in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E)writing thereto, the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Propertyto, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as amend its certificate of the Closing Date in accordance with Treasury Regulation Section 1.897incorporation or by-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and laws; (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date)issue, certifying that each such Subsidiary does not own any U.S. real property isell or pledge any
Appears in 2 contracts
Sources: Merger Agreement (M Acquisition Corp), Merger Agreement (Marcam Solutions Inc)
Interim Operations. (a) Except as otherwise (xi) expressly permitted or required by this Agreement, (ii) required by applicable Law, (yiii) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (Div) as expressly set forth in Section 6.1 6.1(a) of the Company Disclosure LetterSchedule, from the date of this Agreement until the Effective Time, the Company will, and will cause its Subsidiaries to conduct their businesses in the ordinary course of business consistent with past practice and use its and their reasonable best efforts to maintain and preserve intact the material aspects of their business organizations, to maintain their business relationships and goodwill with suppliers, contractors, distributors, customers, partners, employees, licensors, licensees and others having material business relationships with it, to retain the services of the Company’s and its Subsidiaries’ employees and business associates and agents and to comply in all material respects with all applicable Laws and the requirements of all Material Contracts.
(b) Without limiting the generality of the foregoing, except as otherwise expressly (x) permitted or required by this Agreement, (y) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth in Section 6.1(b) of the Company Disclosure Schedule, from the date of this Agreement until the Effective Time, the Company will not not, and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize (x) adopt or propose to amend any change in the Charter or otherwise bylaws of the Company or (y) adopt any change its articles in the comparable organizational document of association, certificate any Subsidiary of incorporation, bylaws or other applicable governing documentsthe Company;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, except for any such transaction between or among any of its Subsidiaries that would not impose, individually or in the aggregate, any changes or restrictions on its assets, operations or business or on the assets, operations and business of the Company and its Subsidiaries taken as a whole that would be adverse to Parent or any of its Affiliates, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, individually or in the aggregate, any changes or restrictions on the assets, operations or business or on the assets, operations and business of the Company or any of its SubsidiariesSubsidiaries that would be adverse to Parent or any of its Affiliates;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose ofdirectly or indirectly, grantany material assets, transfersecurities, properties, rights, interests or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities businesses (other than (A) the issuance purchases of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereonsupplies, if applicable) outstanding prior to the date hereofequipment, (B) the issuance of Ordinary Shares pursuant to the Company ESPPmanaged services, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubtcloud services, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants software or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, inventory in the ordinary course of business consistent with past practice);
(iv) sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire, transfer or dispose of, or create or incur any Lien (other than Permitted Liens) on, any of the Company’s or its Subsidiaries’ material assets (including Intellectual Property Rights), securities, properties, rights, interests or businesses (including pursuant to any sale-leaseback transaction or asset securitization transaction but excluding any sale, disposition, lease or license of inventory or product in the ordinary course of business consistent with past practice);
(v) purchase, redeem or otherwise acquire, or authorize or agree to purchase, redeem or acquire, any Group Securities (other than Group Securities of wholly owned Subsidiaries of the Company and other than the acceptance of Shares as payment for the exercise price of Company Options (including pursuant to a net exercise feature) or for withholding taxes incurred in connection with the exercise of Company Options or the vesting or net settlement of other Group Securities outstanding under the Stock Plans (and dividend equivalents thereon, if any), in each case to the extent such Group Securities for withholding taxes that are outstanding as of the date of this Agreement and in accordance with their applicable terms on the date of this Agreement);
(vi) except (A) for Shares issuable upon the exercise or conversion of Company Options or Company RSUs outstanding on the date hereof; or (B) with respect to Parent’s and Merger Sub’s participation in the transactions contemplated by this Agreement, issue, sell, grant, dispose of, pledge, deliver, transfer or otherwise encumber or authorize, propose or agree to the issuance, sale, grant, disposition, pledge, delivery, transfer or encumbrance by the Company or any of its Subsidiaries of, any Group Securities;
(vii) make any loans, advances or capital contributions to, or investments in, any Person (other than the Company or any of its wholly-owned Subsidiaries), whether or not in the ordinary course of business consistent with past practice, in an amount greater than $500,000 individually or $2,000,000 in the aggregate;
(viii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any Group Securities or consent to any dividend or distribution of its shares or other equity interests each Joint Venture Entity (except for cash dividends or other distributions paid by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly wholly-owned Subsidiary of the Company or pro rata dividends or distributions by Joint Venture Entities) or enter into any agreement with respect to the voting of Group Securities or Joint Venture Entity Securities;
(ix) reclassify, split, combine or subdivide any of the capital stock of the Company;
(x) create, incur or assume any material indebtedness for borrowed money (other than trade payables (including, for avoidance of doubt, indebtedness associated with the purchase of products or services of the Company) and company credit cards, in each case in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassifyguarantee, split, combine, subdivide or redeem, purchase endorse or otherwise acquirebecome responsible (whether directly, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents contingently or otherwise;
(x) make for any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entitysuch indebtedness;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements facilities or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made technology capital expenditures in the ordinary course of business consistent with past practice, make or commit to any capital expenditure or expenditures in an amount greater than $500,000 individually or $2,000,000 in the aggregate;
(xii) enter into any agreement, arrangement or accelerate commitment that materially limits or otherwise restricts the vesting Company or payment its Subsidiaries from engaging or competing in any line of business or in any compensation geographic area or equity for otherwise enter into any agreements, arrangements or commitments imposing material changes or restrictions on its assets, operations or business, except in the benefit ordinary course of business consistent with past practices;
(xiii) (A) enter into any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris GroupContract that, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as if in effect on the date hereof, would have been a Material Contract (other than in the ordinary course of business consistent with past practices), (DB) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into terminate or amend or modify in any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of material respect any current or former directors, consultants, officers or employees Material Contract or any of their beneficiaries; providedContract that, howeverif in effect on the date hereof, that notwithstanding anything to the contrary would have been a Material Contract (other than terminations or amendments in the foregoing clauses (A)-(Eordinary course of business consistent with past practice), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equityC) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of waive in any material Intellectual Property owned by respect any term of, or waive any material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries or material liability or obligation owing to the Company or any of its Subsidiaries under, any Material Contract or any Contract that, if in effect on the date hereof, would have been a Material Contract or (D) enter into any Contract that contains a change of control provision or any similar provision that would require a payment to the other party or parties thereto as a result of the consummation of the Merger or the other transactions contemplated by this Agreement (including in combination with any other event or circumstance); it being agreed that the entry into, termination, amendment or modification of any Contract that (x) is or would be a Material Contract of the type described in clauses (A), (B), (C), (D), (F) (with respect to entering into a new Real Property Lease or terminating, amending or modifying a Real Property Lease in effect as of the date of this Agreement), (J), (K), (M) or (N) of Section 5.1(j)(i), or (y) will involve payments to or from the Company and/or any of its Subsidiaries in excess of $15,000,000 in any one-year period, in each case, will not be considered to be in the ordinary course of business consistent with past practices;
(xiv) materially change the Company’s methods of accounting, except as required by concurrent changes in GAAP or in Regulation S-X of the Exchange Act;
(xv) agree to or otherwise settle, compromise or otherwise resolve in whole or in part any Action for an amount in excess of $500,000 individually or $2,000,000 in the aggregate; provided, however, neither the Company nor any of its Subsidiaries shall settle any Action (regardless of the amount involved) if any such settlement would impose any material obligation or restriction on the Company or its Subsidiaries from time to time or on the Company’s or its Subsidiaries’ ability to own or operate any of its assets, licenses, operations, rights, product lines, businesses or interests therein or require any material changes to the business of the Company or its Subsidiaries from time to time;
(xvi) except as may be required by applicable Law, (A) make a new material Tax election or change any material Tax election, (B) change any entity classification of any Subsidiary, (C) create a permanent establishment in any country other than the country in which the Company or any of its Subsidiaries is organized, (D) file any amended income Tax Return or other material amended Tax Return, (E) adopt or change any annual Tax accounting period or material accounting method for Taxes, (F) settle or compromise any material Tax claim, (G) surrender any material claim for a refund of Taxes, (H) enter into any closing agreement relating to Taxes or (I) file any income Tax Return or other material Tax Return that is inconsistent with past practice;
(xvii) take or fail to take any action that would reasonably be expected to result in any of the conditions set forth in Article VII (Conditions) not to be satisfied or prevent or materially impede the consummation of the transactions contemplated by this Agreement, except as permitted under Section 6.2;
(xviii) announce, implement or effect any material reduction in labor force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company (including any “plant closing” or “mass layoff” as those terms are defined in the WARN Act or any similar action under a similar Law), other than routine employee terminations in the ordinary course of business consistent with past practice;
(xvixix) allow any lapse adopt a plan of complete or abandonment of any material Intellectual Propertypartial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate other reorganization of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local LawsMerger);
(xx) implement except as required by applicable Law or pursuant to the terms of any broad-based early retirement plan or announce Benefit Plan as in effect as of the planning date of such a program;
this Agreement and set forth in the Company Disclosure Schedule, (xxiA) terminate, adopt, establish, enter into any new line of business outside of its existing business into, amend or renew (or enter into communicate any non-compete or exclusivity agreement that would restrict or limitintention to take such action) any Benefit Plan, (B) increase in any material respectmanner the compensation, benefits, severance or termination pay of any of the operations current or former directors, officers, employees or consultants who are natural persons of the Company or any of its Subsidiaries;
, (aC) pay any bonus or incentive compensation under any Benefit Plan, other than payments based on actual performance for completed performance periods, (D) accelerate the vesting of or lapsing of restrictions, or amend the vesting requirements, with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new Contracts with customers awards, or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement amend or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with modify the terms of such Contractany outstanding awards, amendunder any Benefit Plan, modify(F) take any action to accelerate the payment, supplementor to fund or secure the payment, waiveof any amounts under any Benefit Plan, terminate, assign, convey, subject to a Lien (G) forgive any loans or otherwise transfer, in whole or in part, rights or interest pursuant to or in issue any Material Contract;
loans (xxiii) other than renewals routine travel advances issued in the ordinary course of business) to any Company employee, amend(H) hire any employee or consultant who is a natural person with a target total annual cash compensation (e.g., modifybase pay or base rate and short-term cash incentive target amounts) opportunity in excess of $200,000, terminate(I) enter into any collective bargaining agreement or other agreement with a labor union, cancel works council or let lapse a material insurance policy similar organization or (or reinsurance policyJ) or self-insurance program terminate without cause the employment of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 executive officer of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxvxxi) agree, authorize or commit to do any of the foregoing.
(bc) Neither Buyer nor Prior to making any broad-based written or oral communications to the officers or employees of the Company shall knowingly take or permit any of their its Subsidiaries pertaining to take any action compensation or benefit matters that is reasonably likely to prevent or materially interfere with the consummation of are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication (or, in the case of any oral communications, copies of scripts, talking points or other similar materials), upon providing Parent with the communication, Parent shall have a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(cd) The Company shall use its reasonable efforts Nothing contained in this Agreement is intended to cause give Parent or Merger Sub, directly or indirectly, the right to be delivered to Buyer at control or direct the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each operations of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended its Subsidiaries prior to the Closing Date)Effective Time. Prior to the Effective Time, certifying that each such Subsidiary does not own any U.S. real property ithe Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 2 contracts
Sources: Merger Agreement (Pcm, Inc.), Merger Agreement (Insight Enterprises Inc)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof of this Agreement and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) Buyer as Parent may approve consent to in writing (such approval consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 6.1(a) of the Company Disclosure LetterSchedule, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to protect and preserve in all material respects its assets and to preserve intact its business organizations and maintain existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, creditors, lessors, employees and other business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to in writing (such consent not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and will cause not permit its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws incorporation or by-laws or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any of agreements or arrangements imposing material changes or restrictions on its Subsidiariesassets, operations or businesses;
(iii) acquire (by mergerassets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, scheme individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of arrangement, consolidation, acquisition the date of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementthis Agreement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in or the ordinary course issuance of business and in a manner that would not have Shares pursuant to Company Options, Company Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) or securities convertible or exchangeable into or exercisable for any material Tax consequences)shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceCompany);
(vivii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash (A) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with past practiceprior timing, and (B) any cash dividends paid to the Company or one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock or other equity interestsstock;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except from (A) holders of Company Securities Options in full or partial payment of the exercise thereof and/or any Other Subsidiary Securities applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the extent required or permitted under the terms of the applicable Stock Plans and award agreements or (other than the acquisition B) former employees, directors or consultants following termination of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection their relationship with the vesting Company in accordance with applicable agreements providing for the repurchase of Company RSUs)shares upon such termination;
(viiiix) incur any Indebtedness indebtedness for borrowed money or guarantee such Indebtedness indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and noninter-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers company borrowings solely among the Company and its wholly wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvix) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof except as set forth in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries capital budgets set forth in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402Section 6.1(a)(x) of the Company (Disclosure Schedule and consistent therewith, make or authorize any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreementcapital expenditure;
(xviiixi) enter into any Contract that would require payment to or give rise to any rights (other than noticeA) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (bB) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvi) other than in the ordinary course of business consistent with past practice business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or expirations allow to lapse or expire or otherwise dispose of any such Contract Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the ordinary course diligent prosecution of business consistent with past practice Owned Intellectual Property), waive or modify any material rights in accordance with or to Owned Intellectual Property, (C) fail to diligently prosecute the terms Company’s and its Subsidiaries’ patent applications, or (D) fail to exercise a right of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien removal or otherwise transfer, in whole or in part, rights or interest pursuant to or in extension under any Material Contractmaterial Owned Intellectual Property;
(xxiiixvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than renewals routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) increase in any manner the ordinary course compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of businessany of the current or former directors, amendofficers, modify, terminate, cancel employees or let lapse a material insurance policy (or reinsurance policy) or self-insurance program consultants of the Company or its Subsidiaries Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan in effect as excess of the date hereofamount earned based on actual performance, unless simultaneous (D) accelerate the vesting of or lapsing of restrictions with such terminationrespect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, cancellation (E) grant any new award, amend the terms of outstanding awards or lapsechange the compensation opportunity under any Benefit Plan, replacement policies underwritten by insurance and reinsurance companies (F) pay any severance in excess of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage what is legally required under the terminatedterms of any Benefit Plan or applicable Law, canceled (G) take any action to fund or lapsed policies for substantially secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with maximum annual cash compensation opportunities in excess of $200,000, provided, that such new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar premiums, as applicable, are in full force and effectorganization or (K) terminate without cause the employment of any officer of the Company;
(xxivxviii) not exercise subject to Section 6.2, take any rights under Section 5 action or Section 6 omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Company’s current articles Merger or result in any of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined the conditions to the Merger set forth in the Company’s current articles of association) or similar interests or rights)Article VII not being satisfied; or
(xxvxix) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall knowingly provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Subject to Section 6.5, Parent shall not take or permit any of their its Subsidiaries to take any action that is reasonably likely to prevent or materially prevent, interfere with or delay the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as Merger or result in any of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior conditions to the Closing Date), certifying that each such Subsidiary does Merger set forth in Article VII not own any U.S. real property ibeing satisfied.
Appears in 2 contracts
Sources: Merger Agreement (Medicis Pharmaceutical Corp), Merger Agreement (Valeant Pharmaceuticals International, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof of this Agreement and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, writing (such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), and except as otherwise expressly required by this Agreement) and except as required by applicable Laws, the Company shall, and shall cause its Subsidiaries to, conduct their the business of it and its Subsidiaries in all material respects in the ordinary course of business consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause each of its SubsidiariesSubsidiaries to, to use their its respective reasonable best efforts to preserve their material business organizations intact intact, maintain their Licenses and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associatesassociates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, from the date of this Agreement hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (CB) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (C) as required by applicable Laws or (D) as set forth in Section 6.1 7.1(a) of the Company Disclosure Letter, the Company will shall not do any of the following and will shall cause each of its Subsidiaries not toto do any of the following:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise its shareholders any change in its articles of association, certificate of incorporation, bylaws incorporation or by-laws or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, except for any such transactions among wholly owned Subsidiaries of the Company or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiariesliquidate;
(iii) acquire (by purchase, merger, scheme of arrangementjoint venture, partnership, consolidation, acquisition of stock dissolution, liquidation, tender offer, exchange offer, recapitalization, reorganization, share exchange, business combination or assets or otherwisesimilar transaction) any corporationbusiness or material amount of assets outside of the ordinary course of business consistent with past practice from any other Person, partnership other than (A) acquisitions pursuant to Contracts in effect as of the date hereof and set forth in Section 7.1(a)(iii) of the Company Disclosure Letter and (B) any such acquisition (x) that, individually or other business organization in the aggregate, would not reasonably be expected to prevent, delay, impede or any assets constituting a division otherwise adversely affect the consummation of the Transactions and (y) pursuant to which the total value or business line of any Person purchase price paid or any equity interests of any Person payable by the Company and its Subsidiaries would not exceed $10,000,000 individually or enter into any joint venture or similar arrangementin the aggregate;
(iv) issue, deliver, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, or subject to any Lien or authorize the issuance, delivery, sale, pledge, encumbrance disposition, grant, transfer or subjecting the subjection to any Lien, disposition, grant or transfer of Lien any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, stock appreciation rights, warrants, restricted stock units, restricted stock, “phantom” stock, “phantom” stock rights, stock-based performance units or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except for the issuance of Shares in respect of the ordinary course exercise of business Company Options or the vesting or settlement of Company RSUs or Company Restricted Stock, in each case, outstanding as of the date of this Agreement in accordance with their terms and the applicable Stock Plan as in a manner that would not have any material Tax consequences)effect on the date of this Agreement, or as may be granted in accordance with, or otherwise in compliance with, the terms of this Agreement;
(v) make any loans or forgive advances to, or any loans, advances or capital contributions to or investments in in, any Person (Person, other than to any (A) solely between or among the Company and/or one or more direct or indirect wholly owned Subsidiary Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, immaterial amounts or made in the ordinary course of business consistent with past practicepractice or (B) advances in immaterial amounts made in the ordinary course of business consistent with past practice to employees of the Company and its Subsidiaries for reimbursement of routine travel or immaterial business expenses and in accordance with the terms of the applicable policy in effect on the date of this Agreement;
(vi) (A) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary of the Company, in each case in the ordinary course of business consistent with past practice), provided, that the Company may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2015 in an amount per share not to exceed $0.1033 per quarter and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2014, if the Company provides Parent with written notice of each record date it will select at least twenty (20) business days prior to the declaration date in respect of such applicable record date, (B) purchase, redeem or otherwise acquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities, except for (i) any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company in the ordinary course of business consistent with past practice, (ii) any split, combination or reclassification of capital stock of any wholly owned Subsidiary of the Company, or (iii) purchases, redemptions or other acquisitions of capital stock or other securities (x) in respect of the exercise of Company Options or for withholding of Shares to satisfy Tax withholding obligations in respect of the exercise, vesting or settlement of Company Options, Company RSUs and Company Restricted Stock, in each case, outstanding as of the date of this Agreement in accordance with their terms and the applicable Stock Plan as in effect on the date of this Agreement or (y) required by the terms of any plans, arrangements or Contracts existing on the date of this Agreement (or entered into after the date of this Agreement in accordance with this Section 7.1) between the Company or any of its Subsidiaries and any director or employee of the Company or any of its Subsidiaries (to the extent complete and accurate copies of such plans, arrangements or Contracts have been delivered to Parent prior to the date of this Agreement), or (C) enter into any agreement with respect to the voting of its capital stock or other equity interestsstock;
(vii) reclassifyincur any indebtedness for borrowed money or assume, splitguarantee, combine, subdivide or redeem, purchase endorse or otherwise acquire, directly or indirectly, become responsible for any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under enter into any “keep well” or other Contract to maintain any financial statement condition of another person or enter into any arrangement having the revolving facility under economic effect of any of the foregoing, other than solely between or among the Company Credit Agreement, (B) loans and/or one or advances to more direct or indirect wholly owned Subsidiaries of the Company in immaterial amounts or in the ordinary course of business consistent with past practice; provided that the Company and (C) other Indebtedness its Subsidiaries may incur indebtedness for borrowed money, or issue or sell debt securities, in each case in the ordinary course of business consistent with past practice, in an amount not up to exceed an aggregate principal amount $25,000,000 at any given time; provided further, that all such borrowings pursuant to the preceding proviso shall be repaid within 30 days of $15 millionthe borrowing date (on a rolling basis with respect to each portion of such borrowings);
(ixviii) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures as set forth in the current capital forecast budgets set forth in Section 6.1(a)(ix7.1(a)(viii) of the Company Disclosure Letter and consistent therewith, make or (B) expenditures made authorize any payment of, or accrual or commitment for, any capital expenditure in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwiseexcess of $10,000,000 in the aggregate;
(xix) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as procedures (other than those required by changes in GAAP or applicable Law or by a Governmental Entityor, if applicable with respect to foreign Subsidiaries of the Company, the applicable foreign generally accepted accounting principles);
(xix) except with respect settle or compromise, or offer or propose to settle or compromise, any litigationthreatened or pending actions, auditsuits, claimclaims, action hearings, arbitrations, litigations, investigations or other Proceeding related to Tax Returns proceedings before a Governmental Entity (each, a “Proceeding”) or other obligation or liability except in accordance with the parameters set forth on Section 7.1(a)(x) of the Company Disclosure Letter; provided that no such settlement or compromise, or offer in respect thereof, may involve any Tax Liability injunctive or other non-monetary relief which, in either case, imposes restrictions on the business operations of the Company and its Subsidiaries (whichor would impose restrictions on the business operations of the Parent and its Subsidiaries, including, for the avoidance of doubt, shall be governed by the Company and its Subsidiaries, after the Closing);
(xi) enter into any Contract that (A) would have been a Material Contract had it been entered into prior to the date of this Agreement (other than any Contract that would constitute a Material Contract solely pursuant to clauses (i), (iv) (only with respect to Material Contracts that are letters of credit or surety bonds in the ordinary course of business consistent with past practice, and as expressly permitted pursuant to Section 6.1(a)(xii7.1(a)(vii)), (vii), subclause (C) of clause (viii) (with respect to wholly owned Subsidiaries only), clause (xii) (with respect to such Material Contracts for which the Company or its Subsidiaries are a beneficiary, to the extent otherwise compliant with Section 7.2) of Section 5.13(a) and subject teaming agreements entered into in the ordinary course of business consistent with past practice), in each case except, for the avoidance of doubt, Government Contracts and Direct Charge Contracts, or (B) contains a change of control or similar provision that would require a material payment to the other party or parties thereto in connection with the Transactions;
(xii) amend, modify or terminate any Material Contract (other than any Contract that would constitute a Material Contract solely pursuant to clauses (i), (iv) (only with respect to Material Contracts that are letters of credit or surety bonds in the ordinary course of business consistent with past practice, and as expressly permitted pursuant to Section 6.177.1(a)(vii)), settle (vii), subclause (C) of clause (viii) (with respect to wholly owned Subsidiaries only), clause (xii) (with respect to such Material Contracts for which the Company or compromise its Subsidiaries are a beneficiary, to the extent otherwise compliant with Section 7.2) of Section 5.13(a) and teaming agreements entered into in the ordinary course of business consistent with past practice), or cancel, release, waive or modify any litigationmaterial debts or waive, auditrelease, claimcancel, action transfer, assign or other Proceedings against pledge any material claims or rights held by it thereunder, in each case except in the ordinary course of business consistent with past practice, and except for terminations caused by expirations of Material Contracts in accordance with their terms;
(xiii) except as required by Law, (A) make, change, or rescind any material Tax election, except for any Protective 2014 Distribution Election; (B) file any material amended Tax Return of the Company or any of its Subsidiaries Subsidiaries; (C) adopt or change any material method or period of Tax accounting; (D) settle or compromise any material claim relating to Taxes; (E) voluntarily surrender any claim for a refund of material Taxes; (F) enter into any closing agreement relating to Taxes; (G) file any material Tax Return that is inconsistent with past practice; or (H) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment (other than settlements or compromises pursuant to extensions of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior time to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than file Tax Returns obtained in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement consistent with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Taxpast practice);
(xiiixiv) take any action that would reasonably be expected (A) to cause any of the Applicable Distributions not to qualify as transactions under Section 368(a)(1)(D) of the Code or Section 355 of the Code or (B) to cause any stock or securities distributed in the Applicable Distributions not to be treated as “qualified property” for purposes of Section 361(c)(2) of the Code;
(xv) transfer, sell, lease, assign, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)Liens, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assetsor any part of its assets (including material Intellectual Property), licenses, operations, rights, product lines lines, businesses or businesses of the Company or its Subsidiariesinterests therein, with a value in excess of $50 million in the aggregate, each case except for (Ax) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, business consistent with past practice and (By) any abandonment for transactions involving a de minimis amount of Intellectual Property that the Company or any Subsidiary determines assets in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of businessaggregate;
(xivxvi) except to the extent required pursuant to the terms of any Benefit Plan or Material Contract (or any “rabbi trusts” relating to any such Benefit Plans) in effect as of the date of this Agreement, or as otherwise required by applicable Law, (A) grant, increase grant or provide any retentionseverance, termination, change of control, severance in control or termination retention payments or benefits to any present or former director, consultant officer, or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or pension, welfare, severance, termination pay, change in control, retention or other benefits of, to any current or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any former director, consultant officer, or employee of the Company or any of its Subsidiaries, except (1) for any increase to employees below Band A or Band B that are not material individually or in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practiceaggregate, (C) except as required by Law pay any bonus to any current or as required by agreementsformer director, plansofficer, programs or arrangements employee of the Company or any of its Subsidiaries, (D) grant any equity, equity-based or long-term incentive awards under any Benefit Plan or any arrangement that would have been a Benefit Plan had it been in effect on as of the date hereofof this Agreement, (E) become a party to, establish, adopt, commence participation in, amend or terminate or amend any Benefit Plan (other than routine changes to material compensation, employment, equity compensation, severance, termination, change in control, pension, retirement, profit-sharing, deferred compensation, incentive, welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Groupbenefit, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations employee benefit plan or agreement with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultantsofficers, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as (or newly hired employees), other than amendments that are necessary to avoid adverse tax consequences that do not increase materially costs to the Company, (F) amend or modify the terms of any outstanding equity-based or long-term incentive awards, (G) take any action to amend, waive or accelerate the date hereof, unless simultaneous with such termination, cancellation vesting or lapse, replacement policies underwritten by insurance and reinsurance companies payment of nationally recognized standing compensation or self-insurance programsbenefits under any Benefit Plan or award made thereunder, in each case, providing coverage equal case to the extent such actions are material individually or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of associationaggregate, (H) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action to accelerate the payment, or, in the case of severance or similar benefits or deferred compensation not provided under a plan that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation qualified under Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1401(a) of the Code, to fund or in any other way secure the payment of such severance or similar benefits or deferred compensation under any Benefit Plan, (I) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or other agreement with a U.S. real property interest within the meaning of Section 897(clabor union, works council or similar organization, (J) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own change any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (Harris Corp /De/), Merger Agreement (Exelis Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees that, after the date hereof and until the earlier of prior to the Effective Time Time, except as expressly contemplated or the termination of permitted by this Agreement in accordance or required by applicable Law or with its terms the prior written approval of Parent (unless Buyer which shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause each of its Subsidiaries to, conduct their its business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to course. To the extent consistent therewithwith the foregoing and except as otherwise consented to by Parent (which consent shall not be unreasonably withheld, it shalldelayed or conditioned), the Company and its Subsidiaries shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and other Persons with whom the Company or its Subsidiaries has a material business associatesrelationship. Without limiting the generality of the foregoing and in furtherance thereofforegoing, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except (w) as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required contemplated or permitted by this Agreement, (Cx) Buyer may approve in writing with the prior written approval of Parent (such approval not to be unreasonably withheld, delayed or conditioned), (y) as required by applicable Law or (Dz) as set forth in Section 6.1 5.1(a) of the Company Disclosure LetterSchedule, the Company will not and will cause not permit any of its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws incorporation or by-laws or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesSubsidiaries with any other Person;
(iii) acquire make any acquisition (whether by merger, scheme of arrangement, consolidation, or acquisition of stock or assets or otherwiseassets) of any corporation, partnership or other business organization or any assets constituting a division or business line of interest in any Person or any equity interests division or assets thereof other than (A) acquisitions in the ordinary course of business with a value or purchase price in the aggregate not in excess of $2,000,000 in any Person transaction or enter into any joint venture series of related transactions, or similar arrangement(B) acquisitions pursuant to Contracts in effect as of the date of this Agreement, true and complete copies of which have been made available to Parent;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose ofpledge, grant, transfer, encumber or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer otherwise dispose of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of the Company or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares shares of Class A Common Stock upon the vesting settlement of Company RSUs Options or Company Restricted Stock Awards, (and dividend equivalents thereon, if applicableB) outstanding prior in satisfaction of obligations pursuant to Contracts or Plans existing as of the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary in of the ordinary course Company, (D) the issuance of business and in a manner that would not have any material Tax consequencesequity awards permitted by clause (xii) below or (E) the issuance of shares of Class A Common Stock pursuant to the terms of an ESPP offering permitted under Section 2.8(c));
(v) make or forgive any loans, advances (other than pursuant to Government Contracts in the ordinary course of business) or capital contributions to or investments in any Person (other than to the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company Company) in excess of $2,000,000 in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceaggregate;
(vi) declare, set aside, establish a record date for, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property or otherwise, ) with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly wholly-owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsSubsidiary);
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities stock or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities shares of its capital stock (other than the acquisition of any Ordinary Shares shares of Class A Common Stock tendered by current or former employees or directors in order to pay Taxes in connection with the vesting settlement of Company RSUsOptions or Company Restricted Stock Awards and other than in connection with a customary cashless exercise of Company Options);
(viii) incur or enter into any Indebtedness or guarantee such Indebtedness of another Person (except with respect agreement to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have incur any material Tax consequences), indebtedness for borrowed money or issue or sell any debt securities or warrants or other rights to acquire any debt security securities of the Company or any of its SubsidiariesSubsidiaries or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) for borrowed money, except to fund operations in the event the U.S. Congress allows for (A) Indebtedness a lapse in federal agencies’ authority to appropriate funds or curtails funding for borrowed money nonessential activities in certain federal agencies or departments under the Company’s existing revolving credit facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an aggregate amount not to exceed an aggregate principal the maximum amount of $15 millionauthorized under that agreement at any time to be outstanding;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast as set forth in Section 6.1(a)(ix5.1(a)(ix) of the Company Disclosure Letter or Schedule, (B) in the ordinary course of business or (C) for expenditures made related to operational emergencies, make or authorize any capital expenditure in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwiseexcess of $2,000,000 in the aggregate;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action claim or other Proceedings proceeding against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount amounts paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries in settlement or compromise do not exceed $2,000,000, in the aggregate; provided that the foregoing shall not permit the Company or any of its Subsidiaries to settle any litigation, claim or other than proceeding that would impose material restrictions or changes on the payment business or operations of money damagesthe Company or any of its Subsidiaries;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiiixi) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of, or grant any Lien other than any Permitted Lien on, any material amount of any assets, rights (including Intellectual Property), properties, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for other than (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment pursuant to Contracts existing as of Intellectual Property that the Company date hereof or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers transactions solely among the Company and and/or its wholly wholly-owned Subsidiaries in the ordinary course of businessSubsidiaries;
(xivxii) except to satisfy contractual obligations pursuant to Contracts, or as required under Plans existing as of the date hereof or as set forth in Section 5.1(a)(xii) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (A) grant, increase pay or provide commit to grant or pay any retention, change of control, material severance or termination payments pay, (B) enter into any Plan with any director or executive officer of the Company, (C) adopt any new employee benefit plan or arrangement or amend, modify or terminate any existing Plan or ERISA Plan in a manner that materially increases the cost associated with such Plan or ERISA Plan, (D) make any new equity awards to any current or former director, executive officer, employee or consultant of the Company or any of its Subsidiaries, (E) otherwise increase or commit to increase any compensation or employee benefits payable to any director, consultant officer or employee of the Company or any of its SubsidiariesSubsidiaries or (F) fund or in any way secure any payments or benefits under any Plan;
(xiii) adopt or enter into a plan or agreement of complete or partial liquidation, exceptdissolution, in the case of employees who are not executive officers merger, consolidation or other reorganization of the CompanyCompany or any of its Subsidiaries (other than the Merger);
(A) modify, amend or terminate any Material Contract other than (1) in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who modifications or amendments which are executive officers of the Companyimmaterial, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxiB) enter into any new line of business outside of its existing business Contract or renew or enter into any non-compete or exclusivity agreement that would restrict or limitthat, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been if entered into prior to the date of this Agreement or (bAgreement, would have been required to be listed in Section 3.15(a) of the Company Disclosure Schedule as a Material Contract other than in the ordinary course of business consistent with past practice (it being understood that the foregoing exception to this clause (B) shall not permit the entry into any Contract with an Affiliate or expirations a “related person” (as such term is defined in item 404(a) of any such Contract in Regulation S-K under the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material ContractExchange Act));
(xxiiixv) except as may be required by a change in GAAP or applicable Law, make any material change in its financial accounting principles, policies, or practices;
(A) make any Tax election or take any position on a Tax Return filed on or after the date of this Agreement or adopt any method therein that is inconsistent with elections made, positions taken or methods used in preparing or filing similar returns in prior periods unless such position, election or method is pursuant to applicable Law or the Code, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return that would result in a change in Tax liability, taxable income or loss, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any Tax liability, or (F) give or request any waiver of a statute of limitation with respect to any Tax Return, provided, that such election, settlement, amended Tax Return or any other than renewals action described in the ordinary course foregoing portion of businessthis Section 5.1(a)(xvi) shall not require prior written consent of Parent if all such actions, amendin the aggregate, modify, terminate, cancel or let lapse would not reasonably be expected to result in a material insurance policy (or reinsurance policy) or self-insurance program of cost to the Company or and its Subsidiaries in effect as excess of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)$500,000; or
(xxvxvii) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take Nothing contained in this Agreement is intended to give Parent or permit any of their Subsidiaries Merger Sub, directly or indirectly, the right to take any action that is reasonably likely to prevent control or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth direct the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as or any of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended its Subsidiaries’ operations prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iEffective Time.
Appears in 2 contracts
Sources: Merger Agreement (Providence Equity Partners VI L P), Merger Agreement (Sra International Inc)
Interim Operations. (a) Except (i) as expressly contemplated, required or permitted by this Agreement, (xii) as required by applicable Law, (yiii) otherwise expressly required as approved in writing by this Agreement or Parent (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), (iv) as set forth on Section 6.1 of the Company shallDisclosure Schedule, and shall cause its Subsidiaries toor (v) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, conduct their business that, with respect to actions taken or omitted to be taken in the ordinary course consistent with past practice and in compliance with all applicable Laws andreliance on this clause (v), to the extent consistent therewithpermitted under applicable Law and practicable under the circumstances, it shall, the Company shall provide prior notice to and shall cause its Subsidiaries, consult in good faith with Parent prior to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereoftaking such action), from the date of this Agreement until the earlier to occur of the Effective Time or the termination of this Agreement in accordance with pursuant to Article VIII and the Effective Time, the Company will, and will cause its termsSubsidiaries to, except as use its and their commercially reasonable efforts to (A) required by applicable Law or as contemplated by conduct their businesses in the Scheme Document Annex, ordinary course of business and (B) otherwise preserve intact their business organizations and relationships with customers, suppliers, distributors and other Persons with which it has material business dealings; provided that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Except (u) as expressly contemplated, required or permitted by this Agreement, (Cv) Buyer may approve as required by applicable Law, (w) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or ), (Dx) as set forth in on Section 6.1 of the Company Disclosure LetterSchedule, or (y) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (y), to the extent permitted under applicable Law and practicable under the circumstances, the Company shall provide prior notice to and consult in good faith with Parent prior to taking such action), from the date of this Agreement until earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will not not, and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise (x) adopt any change its articles of association, in the certificate of incorporation, incorporation or bylaws of the Company or other applicable governing documents(y) adopt any change in the comparable organizational document of any of the Company’s Subsidiaries;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or restructure, reorganize reorganize, recapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreement or arrangement imposing restrictions on the assets, operations or business of the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transferof or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance or subjecting to any Lienof, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any Company Securities options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or Other Subsidiary Securities (other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction among the issuance of Ordinary Shares upon Company and its Subsidiaries or among the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereofCompany’s wholly owned Subsidiaries, (B) the any issuance of Ordinary Shares pursuant to the exercise or settlement of Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect Equity Awards outstanding as of the date hereof (for the avoidance of doubtthis Agreement in accordance with their terms, the Company shall not allow the commencement of any new offering periods under the Company ESPP), or (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as incurrence of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)Permitted Liens;
(viv) make or forgive any loans, advances or capital contributions to or investments in any Person (other than (A) to the Company or any direct or indirect of its wholly owned Subsidiary Subsidiaries and (B) operating leases and extensions of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit terms to customers and advancing business expenses to employees, in each case, case in the ordinary course of business consistent with past practice);
(viv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise with respect to any of its shares capital stock, except for dividends or other equity interests (except for cash dividends distributions paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary in of the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsCompany;
(viivi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stockstock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (except for (A) any such transaction by a wholly owned Subsidiary of the Company, Company Securities or any Other Subsidiary Securities (other than the acquisition B) acquisitions of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes satisfaction of withholding obligations in connection with the vesting respect of Company RSUsEquity Awards to the extent required by such Company Equity Awards, or (C) payment of the exercise price in respect of Company Options, in the case of clauses (B) and (C), outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(viiivii) incur create, incur, assume or guarantee any Indebtedness for borrowed money or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries issue any debt securities or guarantees of the Company same or any other Indebtedness, except for (A) borrowings in the ordinary course of business under the Company’s existing revolving credit facilities (including under both the Cash Flow Credit Agreement and ABL Credit Agreement); provided that any such incurrence does not and is not reasonably expected to cause the Payment Condition (as defined in a manner that would not have any material Tax consequences)the ABL Credit Agreement) to fail to be satisfied on, or issue or sell any debt securities or warrants or other rights to acquire any debt security of as of, the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit AgreementClosing Date, (B) loans guarantees or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed credit support provided by the Company or any of its Subsidiaries other than of the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses obligations of the Company or its Subsidiaries, with a value in excess any of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of businessbusiness to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with clause (A) of this Section 6.1(b)(vii), (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, and (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers Indebtedness solely among the Company and its wholly wholly-owned Subsidiaries in or among the ordinary course of businessCompany’s wholly-owned Subsidiaries;
(xivviii) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, other than in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection accordance with the Company’s usual and customary annual review capital expenditure budget made available to Parent, incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $5 million individually or $10 million in 2019, so long as any such increases are consistent with past practice, (C) except the aggregate or capital expenditures as required by Law on an emergency basis or as required by agreements, plans, programs or arrangements in effect on for the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans safety of individuals or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsenvironment;
(xvix) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
, (xviA) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement; provided, that no Contract of the type described in Section 5.1(k)(i)(B)(x) or (C) shall be entered into without the prior written consent of Parent, or (B) amend, modify or waive in any material respect or terminate any Material Contract in a manner adverse to the Company (other than expirations of any such Contract in accordance with its terms);
(x) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) settle any Action for an amount in excess of $1 million individually or $5 million in the aggregate other than (A) any settlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered by insurance coverage or retention amounts maintained by the Company or any of its Subsidiaries and (B) settlements or compromises of any Action for an amount not materially in excess of the amount, if any, reflected or specifically reserved in the balance sheet (or the notes thereto) of the Company included in the Company Reports (with materiality measured relative to the amount so reflected or reserved, if any); provided that, in the case of each of the foregoing clauses (A) and (B), the settlement or compromise of such Action does not (x) impose any non-de minimis restriction on the business or operations of the Company or any of its Subsidiaries (or Parent or any of its Subsidiaries after the Closing) and (y) include any non-de minimis non-monetary or injunctive relief, or the admission of wrongdoing, by the Company or any of its Subsidiaries or any of their respective officers or directors;
(xii) sell, lease, license, encumber (other than Permitted Liens), abandon, permit to lapse, or otherwise dispose of any material assets or property (including any material Intellectual Property Rights) except (A) pursuant to existing contracts or commitments (or refinancings thereof), (B) as may be required by a Governmental Authority to permit or facilitate the consummation of the Merger or any of the other transactions contemplated in this Agreement solely to the extent required pursuant to Section 6.5, (C) transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, or (bD) in the ordinary course of business and in no event in an amount exceeding $1 million individually or $5 million in the aggregate;
(xiii) except for such actions required by the terms of Benefit Plans as in effect on the date hereof: (A) increase the compensation or other benefits payable or provided to the Company’s Employees or other service providers; (B) increase or accelerate or commit to accelerate the funding, payment or vesting of compensation or benefits provided under any Benefit Plan, (C) grant or announce any cash- or equity or equity-based incentive awards, bonus, change of control, severance or retention award to any Employee or other service provider of the Company or its subsidiaries; (D) establish, adopt, enter into terminate or amend any Labor Agreement or material Benefit Plan (or any plan, program, agreement or arrangement that would be a Benefit Plan if in effect on the date hereof); (E) recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative of any employees of the Company or its Subsidiaries or (F) hire or terminate the employment of any employee of the Company whose annualized base compensation exceed $300,000;
(xiv) acquire any business, assets or capital stock of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than the acquisition of assets from vendors or suppliers of the Company or any of its Subsidiaries in the ordinary course of business;
(xv) cancel, modify, amend or waive or terminate any of the Existing Credit Documents, except for modifications or amendments to any of the Existing Credit Documents that would not (A) impair the ability of Parent to obtain the Debt Financing or any high-yield bonds being issued in lieu of all or a portion of the Debt Financing on the Closing Date, (B) reduce the ability of the Company and its Subsidiaries to incur secured debt for borrowed money in the form of the Debt Financing or any high-yield bonds being issued in lieu of all or a portion of the Debt Financing on the Closing Date in any material respect, (C) reduce the ability of the Company and its Subsidiaries to make Restricted Payments (as defined in the applicable Existing Credit Document) on the Closing Date in any material respect, (D) impair the ability of the Merger to be consummated in compliance with any “merger” or “fundamental changes” covenant in the Existing Credit Documents or (E) amend or modify the stated final maturity date of any indebtedness for borrowed money thereunder to be sooner than such maturity date as in effect as of the date hereof, amend or modify the interest rate or undrawn commitment fees payable by the Company or its Subsidiaries under any such agreement in a manner materially adverse to the Company and its Subsidiaries or amend or modify any such agreement to reduce the amount of the total lending commitments thereunder;
(xvi) implement or announce any permanent plant closings or permanent facility shutdown that would implicate the WARN Act;
(xvii) other than in the ordinary course of business or consistent with past practice (A) change or expirations revoke any material Tax election; (B) change any annual Tax accounting period or material method of Tax accounting, (C) file any such Contract material amended Tax Return, (D) settle or compromise any material claim related to Taxes for an amount materially in the ordinary course excess of business consistent with past practice in accordance with the terms of such Contractamounts reserved, amend, modify, supplement, waive, terminate, assign, convey, subject (E) enter into any material closing agreement or (F) surrender any right to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse claim a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereofTax refund, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” offset or other shareholder rights plan reduction in liability for an amount materially in excess of amounts reserved (or otherwise issue it being agreed and understood that, notwithstanding any Rights other provision, neither Section 6.1(b)(xi) nor Section 6.1(b)(xviii) (insofar as defined in the Company’s current articles of associationit relates to Section 6.1(b)(xi)) or similar interests or rightsshall apply to Tax compliance matters); or
(xxvxviii) agree, authorize or commit to do any of the foregoing.
(bc) Neither Buyer nor Company shall knowingly take Nothing contained in this Agreement is intended to give Parent or permit Merger Sub or any of their Affiliates, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
(d) Subject to the terms of this Agreement, including Section 6.5 and Section 6.13, from the date of this Agreement until the Effective Time, none of Parent, Merger Sub or their respective Subsidiaries shall (i) knowingly take any action that is reasonably likely to prevent would prevent, materially delay or materially interfere with impede the consummation of the Equity Financing or the Debt Financing; (ii) acquire or agree to acquire by merging or consolidating with, or by purchasing a material portion of the assets of or equity in, any Person (a “Specified Acquisition”), if the entering into of a definitive agreement relating to or the consummation of such a Specified Acquisition, as applicable, would reasonably be expected to (A) prevent, materially delay or materially impair the obtaining of, or adversely affect in any material respect the ability of Parent or its Affiliates to procure, any authorizations, consents, orders, declarations or approvals of any Governmental Authority or the expiration or termination of any applicable waiting period necessary to consummate the transactions contemplated by this Agreement, including the Merger, or (B) materially increase the risk of any Governmental Authority entering an order, ruling, judgment or injunction prohibiting the consummation of the transactions contemplated by this Agreement.
, including the Merger; or (ciii) The Company shall use its reasonable efforts take any action that would reasonably be expected to cause to be delivered to Buyer at prevent, materially impair or materially delay the Closing (i) executed affidavits dated as consummation of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each Merger or the satisfaction of any of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iclosing conditions thereto.
Appears in 2 contracts
Sources: Merger Agreement (CD&R Associates VIII, Ltd.), Merger Agreement (Cornerstone Building Brands, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, such approval not to be unreasonably withheldwithheld or delayed, delayed and except as otherwise expressly contemplated by this Agreement or conditioned)as set forth in Section 6.1 of the Company Disclosure Letter) and except as required by applicable Law, the Company shall, business of it and shall cause its Subsidiaries to, conduct their business shall be conducted in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except (i) as (A) required by applicable Law or as otherwise contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (Cii) Buyer as Parent may approve in writing (such approval not to be unreasonably withheldwithheld or delayed), delayed (iii) as is required by applicable Law or conditioned) any Governmental Entity or (Div) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause not permit its Subsidiaries not to:
(iA) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws incorporation or by-laws or other applicable governing documentsinstruments or other similar organizational documents of any of its Subsidiaries;
(iiB) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiariesliquidate;
(iiiC) acquire (by merger, scheme assets outside of arrangement, consolidation, acquisition the ordinary course of stock or assets or otherwise) business from any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or with a value or purchase price in the aggregate in excess of $5 million in any equity interests transaction or series of any Person or enter into any joint venture or similar arrangementrelated transactions;
(ivD) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A1) the issuance of Ordinary Shares upon the vesting exercise of Company RSUs Options set forth in Section 5.1(b)(i) of the Company Disclosure Letter in accordance with the terms of the Stock Plans or (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B2) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of business and in a manner that would not have such capital stock, or any material Tax consequencesoptions (including Company Options), warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(vE) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to the Company or any direct or indirect wholly owned Subsidiary of the Company Company) in excess of $4 million in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceaggregate;
(viF) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid or other distributions by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in of the ordinary course of business consistent with past practiceCompany) or enter into any agreement with respect to the voting of its capital stock or other equity interestsstock;
(viiG) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities stock or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities shares of its capital stock (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes Employees in connection with the vesting exercise of Company RSUsOptions set forth in Section 5.1(b)(ii) of the Company Disclosure Letter in accordance with the terms of the Stock Plans);
(viiiH) incur any Indebtedness indebtedness for borrowed money or guarantee such Indebtedness indebtedness of another Person (except with respect to obligations of other than a wholly owned Subsidiaries Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesCompany), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money borrowings and letter of credits issued under the Company’s existing revolving credit facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix5.1(b)(ii) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwiseLetter;
(xI) except as set forth in the capital budgets set forth in Section 6.1(a)(I) of the Company Disclosure Letter, make or authorize any capital expenditure in excess of $2 million in the aggregate;
(J) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xiK) except with respect to settle, release, waive or compromise any litigationpending or threatened suit, auditaction, claim, action arbitration, investigation or litigation or other Proceeding related to Tax Returns proceedings (i) for an amount in excess of $1 million or any Tax Liability obligation or liability of the Company in excess of such amount (which, for ii) entailing obligations that would impose any material restrictions on the avoidance business or operations of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises (iii) that is brought by any current, former or purported holder of any litigation, audit, claim, action capital stock or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate debt securities of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than relating to the payment of money damagestransactions contemplated by this Agreement;
(xiiL) make or change any material Tax election or tax accounting method, settle or compromise any material Tax liability other than in the ordinary course of business consistent with past practice, or agree to an extension or waiver of the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount statute of Tax Liability, enter into any closing agreement limitations with respect to any material amount the assessment or determination of Taxes other than ordinary course state and local Tax or surrender any right to claim a refund for a material amount of Taxinquiries;
(xiiiM) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Groupinventory, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or supplies and other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than assets in the ordinary course of business consistent with past practice;
(xviN) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (except as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
, required pursuant to Benefit Plans in effect prior to the date of this Agreement and listed on the Company’s Disclosure Letter, or as otherwise required by applicable Law, (xviii1) enter into grant or provide for any Contract that would require payment to severance or give rise termination payments or benefits to any rights (other than notice) to such other party director or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations officer of the Company (the “Elected Officers”) or any Employee, except, in the case of its Subsidiaries;
(a) other than new Contracts with customers or suppliers employees who are not Elected Officers, in the ordinary course of business consistent with past practice, enter into (2) increase the compensation, perquisites or benefits payable to any Contract Employee, except, in the case of Employees who are not Elected Officers of the Company, increases in the ordinary course of business consistent with past practice, (3) grant any equity or equity-based awards that would have been a Material Contract had it been entered into prior may be settled in Shares, preferred shares or any other securities of the Company or any of its Subsidiaries or the value of which is linked directly or indirectly, in whole or in part, to this Agreement the price or value of any Shares, preferred shares or other Company securities or Subsidiary securities, (4) accelerate the vesting or payment of any compensation payable or benefits provided or to become payable or provided to any Employee or (b5) terminate or materially amend any existing, or adopt any new, Benefit Plan (other than changes made in the ordinary course of business consistent with past practice or expirations as may be necessary to comply with applicable Laws, in either case that do not materially increase the costs of any such Benefit Plans);
(O) except as required by applicable Laws, enter into, amend or extend any material collective bargaining agreement or other labor agreement;
(P) except to the extent necessary to take any actions that the Company is otherwise permitted to take pursuant to Section 6.2 (and in such case only in accordance with the terms of Section 6.2), take any action to render inapplicable, or to exempt any third party from, any standstill arrangements or the provisions of any Takeover Statutes;
(Q) enter into, amend, cancel or modify any Material Contract or any Contract that would be a Material Contract if in effect on the date of this Agreement;
(R) cancel any debts or waive any claims or rights of substantial value (including the cancellation, compromise, release or assignment of any indebtedness owed to, or claims held by, the Company or any of its Subsidiaries), except for cancellations made or waivers granted with respect to claims other than indebtedness in the ordinary course of business consistent with past practice which, in accordance the aggregate, are not material or for claims other than indebtedness which are cancelled or waived in connection with the terms settlement of such Contractthe actions referred to in, amendand to the extent permitted by, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contractclause (K) above;
(xxiiiS) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal fail to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are maintain in full force and effecteffect the material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practices;
(xxivT) not exercise enter into any rights under Section 5 agreement with a New Jersey Governmental Entity pursuant to the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1K-6, et seq. (“ISRA”) that could reasonably be expected to (i) require the Company to establish a financial assurance exceeding $1 million or Section 6 (ii) otherwise result in investigation or remediation liabilities of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined Company exceeding $1 million in the Company’s current articles of association) or similar interests or rights)aggregate; or
(xxvU) except as provided in Section 6.2 and Section 8.3(a), agree, authorize or commit to do any of the foregoingforegoing or any action which would result in any of the conditions to the Merger set forth in Article VII not being satisfied or that would reasonably be expected to result in a Company Material Adverse Effect.
(b) Neither Buyer nor The Company shall knowingly take consult with Parent reasonably in advance of any decision to (i) hire any “Executive Officer” (as such term is defined in Rule 3b-7 promulgated under the Exchange Act), promote any existing Executive Officer to a more senior position or permit otherwise appoint or promote any current director, employee, independent contractor or consultant to an Executive Officer position or (ii) adopt any material modification or material deviation from the Company’s annual operating plan, as previously provided to Parent; and in each case shall consider in good faith the reasonable recommendations of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this AgreementParent in connection therewith.
(c) The Company shall shall, except as prohibited by applicable Law or as would jeopardize attorney-client privilege (but in such event, the Company will use its commercially reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2keep Parent fully informed), certifying that an interest in each keep Parent informed, on a current basis, of any material events, discussions, notices or changes with respect to any criminal or material regulatory investigation or action involving the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) or any of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iits Subsidiaries.
Appears in 2 contracts
Sources: Merger Agreement (ReAble Therapeutics Finance LLC), Merger Agreement (Djo Inc)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of During the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, period from the date of this Agreement until the earlier of to the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth on the Disclosure Schedule, as expressly permitted by Section 4.1 or as otherwise approved in Section 6.1 of writing by the Company Disclosure LetterPurchaser, the Company will shall not and will shall cause its Subsidiaries subsidiaries not to:
(i) amend (x) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent, (y) 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 (z) purchase, redeem or otherwise change, or authorize or propose to amend or otherwise change its articles acquire any shares of association, certificate capital stock of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiariessubsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(ii) grant, issue, deliver, sell, pledge or otherwise encumber 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, except upon exercise of any Option;
(iii) amend its certificate of incorporation, by-laws or other comparable organizational documents;
(iv) acquire or agree to acquire (x) by mergermerging or consolidating with, scheme or by purchasing a substantial portion of arrangementthe assets of, consolidationor by any other manner, acquisition of stock any business or assets or otherwise) any corporation, partnership limited liability company, partnership, joint venture, association or other business organization or division thereof or (y) any assets constituting a division or business line services of any Person kind other than (A) pursuant to written purchase orders issued in the ordinary course of business and in customary amounts consistent with past practices or any equity interests (B) acquisitions of any Person assets or enter into any joint venture or similar arrangementservices in the ordinary course of business and in customary amounts consistent with past practices that, individually, do not exceed $25,000;
(ivv) issue, sell, pledge lease, license, mortgage or otherwise encumber or subject to any Lien (whether through the issuance or granting otherwise dispose of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries properties or any Company Securities or Other Subsidiary Securities (assets, other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice, that are material to the Company and its subsidiaries taken as a whole;
(vi) declareincur any indebtedness, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary borrowings for working capital purposes not in the ordinary course excess of business consistent with recent past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestspractice and current lending arrangements;
(vii) reclassify, split, combine, subdivide make or redeem, purchase agree to make any new capital expenditure or otherwise acquire, directly or indirectly, any capital expenditures which in the aggregate are in excess of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs)$100,000;
(viii) incur pay (or commit to pay) any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants bonus or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response incentive compensation to any emergencyofficer, whether caused by wardirector, terrorism, weather events, public health events, outages, operational incidents partner or otherwise;
other employee or grant (xor commit to grant) make any material changes with respect to any method of Tax or financial accounting policies or proceduresofficer, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant partner or employee of the Company or any of its Subsidiariesother increase in compensation, except, in the case of employees who are not executive officers or directors, normal salary increases consistent with recent practice;
(i) enter into, adopt or amend (or commit to enter into, adopt or amend) any employment, retention, change in control, collective bargaining, deferred compensation, severance, retirement, bonus, profit-sharing, stock option or other equity, pension or welfare plan or agreement maintained for the benefit of any officer, director, partner or employee, except as required by law, or (ii) except as required by agreements set forth on the CompanyDisclosure Schedule, grant or pay (or commit to grant or pay) any severance or termination compensation or benefits to any officer, director, partner or employee;
(x) make any tax election inconsistent with past practices or settle or compromise any material income tax liability;
(xi) except in the ordinary course of business consistent with past practice or except as required by agreements, plans, programs or arrangements in effect would not reasonably be expected to have a Material Adverse Effect on the date hereofCompany, (B) increase in modify, amend or terminate any manner the compensation, bonus material contract or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of agreement to which the Company or any of subsidiary is a party or waive, release or assign any material rights or claims thereunder;
(xii) make any material change to its Subsidiariesaccounting methods, except (1) in the case of employees principles or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedpractices, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)generally accepted accounting principles; or
(xxvxiii) agreeauthorize, authorize or commit or agree to do take, any of the foregoingforegoing actions.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (Defiance Inc), Merger Agreement (General Chemical Group Inc)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from From the date of this Agreement until the earlier Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall ensure that (i) the business and operations of the Acquired Companies shall be conducted (A) in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) From the date of this Agreement until the Effective Time or the termination of this Agreement (unless Parent shall otherwise approve in accordance with writing in its termssole discretion, and except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required contemplated by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter), the Company will not shall not, and will shall cause its Subsidiaries each of the other Acquired Companies not to:
(i) (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend or otherwise change, or authorize waive or propose to amend or otherwise change waive any provision of its articles of association, certificate of incorporationincorporation or bylaws; (C) split, bylaws combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other applicable governing documentsthan dividends from its direct or indirect wholly-owned Subsidiaries; or (E) repurchase, redeem or otherwise acquire, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ii) merge(A) issue, enter sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any scheme kind to acquire, any shares of arrangement its capital stock of any class or bid conduct agreement any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries) or incur or modify any indebtedness or other similar arrangementLiability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or consolidate with investment in, assets or stock of or other interest in, any other Person or restructureentity; or (D) enter into any joint venture agreement, reorganize partnership agreement or completely or partially liquidate the Company or similar agreement with any of its SubsidiariesPerson;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereongrant or provide any severance or termination payments or benefits to any director, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement officer or employee of any new offering periods under the Acquired Company ESPP)except, (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course case of business and in a manner that would employees who are not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each caseofficers, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, or make, grant or amend in pay any respect any equity or equity-linked awards (including changing the vesting criteria thereof) bonus to, or grant or increase make any bonuses to, new equity awards to any director, consultant officer or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Acquired Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law enter into, adopt, extend, amend or as required by agreementsrenew any employment, plansseverance, programs change in control, termination, deferred compensation or arrangements in effect on the date hereofother similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or amend exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other than routine changes way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of benefits under any Person or funding of any Company Benefit Plan (except (x) as required in connection with the termination of the Arris GroupPlan, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof)extent not already required by any such Company Benefit Plan, (DG) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP, or (EH) forgive any loans to directors, officers or employees of any Acquired Company;
(iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as required by Lawmay arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), establishin amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, adopt2017);
(v) (A) modify, amend, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of terminate any material Intellectual Property owned by the Company or any of its Subsidiaries Contract other than in the ordinary course of business consistent or waive, release or assign any material rights or claims with past practicerespect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(xvivi) allow make any lapse Tax election, settle or abandonment of compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material Intellectual Propertyaspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any registration extension or grant thereof, waiver of the limitation period applicable to any material Tax claim or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgmentassessment;
(xviivii) permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(viii) take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any transaction with agreement that limits the ability of any Affiliate Acquired Company, or would limit the ability of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company Parent or any Subsidiary thereof of Parent (including any Acquired Company) after the Effective Time, to compete in excess or conduct any line of $120,000, other than the agreements expressly contemplated by this Agreementbusiness or compete with any Person in any geographic area or during any period;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxixi) enter into any new line business line;
(xii) (A) adopt a plan or agreement of business outside complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its existing business assets, under any federal, state or renew foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into any non-compete or exclusivity an agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(bc) Neither Buyer nor Company Nothing contained in this Agreement shall knowingly take give to Parent or permit any of their Subsidiaries Merger Sub, directly or indirectly, rights to take any action that is reasonably likely to prevent control or materially interfere with direct the consummation operations of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended Acquired Companies prior to the Closing Date). Prior to the Closing Date, certifying the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that each occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such Subsidiary does not own representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any U.S. real property material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 2 contracts
Sources: Merger Agreement (Willbros Group, Inc.\NEW\), Merger Agreement (Primoris Services Corp)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company The Debtor covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, prior to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsClosing, except (i) as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required or contemplated by this Agreement, (Cii) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (iii) as otherwise required by applicable Laws or (Div) as set forth in Section 6.1 4.1 of the Company Debtor Disclosure Letter, the Company Business shall be conducted in the ordinary and usual course and, to the extent consistent therewith, the Debtor and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations intact, preserve governmental licenses, permits, consents, approvals, authorizations and qualifications and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates, and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Closing, except (i) as otherwise expressly required or contemplated by this Agreement, (ii) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (iii) as otherwise required by applicable Laws or (iv) as set forth in Section 4.1 of the Debtor Disclosure Letter, the Debtor will not and will cause not permit any of its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws incorporation or by-laws or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Debtor or any of its Subsidiaries with any other Person Person, or restructure, reorganize or completely or partially liquidate the Company Debtor or any of its SubsidiariesSubsidiaries or otherwise enter into any agreements providing for the sale of their respective material assets, operations or business (other than the sale or disposition of obsolete or worn-out assets in the ordinary course of business);
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $1,000,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement which have been provided to Parent prior to the date of this Agreement;
(by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwiseiv) acquire any corporation, partnership or other business organization or any division thereof or collection of assets constituting all or substantially all of a division business or business line unit, whether by merger or consolidation, purchase of any Person substantial assets or equity interest or any equity interests of other manner, from any Person or enter into any joint venture or similar arrangementother Person;
(ivv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) Debtor or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly wholly-owned Subsidiary of the Company Debtor to the Company Debtor or another wholly wholly-owned Subsidiary in the ordinary course Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of business and in a manner that would not have such capital stock, or any material Tax consequences)options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(vvi) create or incur any Lien securing indebtedness for borrowed money (other than a Lien currently provided for under the Centerbridge Facility, any Permitted Lien (other than clause (d) of such definition) and/or the grant of any cash collateral in respect of letters of credit issued in respect of, or otherwise securing, ordinary course operating liabilities) on any assets of the Debtor or any of its Subsidiaries having a value in excess of $1,000,000 in the aggregate;
(vii) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to the Debtor or any direct or indirect wholly wholly-owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceDebtor);
(viviii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company Debtor or to any other direct or indirect wholly wholly-owned Subsidiary in the ordinary course of business consistent with past practiceSubsidiary) or enter into any agreement with respect to the voting of its capital stock or (other equity intereststhan the Restructuring Support Agreement);
(viiix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viiix) incur any Indebtedness indebtedness for borrowed money (which, for the avoidance of doubt, shall not include obligations in respect of cash-collateralized letters of credit issued in respect of, or other grants of cash collateral securing, ordinary course operating liabilities) or guarantee such Indebtedness indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company Debtor or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice (A) Indebtedness for borrowed money under not to exceed $2,000,000 in the revolving facility under the Company Credit Agreementaggregate, (B) loans or advances to wholly guarantees incurred in compliance with this Section 4.1 by the Debtor of indebtedness of wholly-owned Subsidiaries and of the Debtor or (C) other Indebtedness in an amount not indebtedness owed to exceed an aggregate principal amount the Debtor or another wholly-owned Subsidiary of $15 millionthe Debtor;
(ixxi) shall not except as set forth in the capital expenditures budget set forth in Section 4.1(a)(xi) of the Debtor Disclosure Letter, make or authorize or make any capital expenditures expenditure in excess of $40 million 2,000,000 in the aggregate, except excluding any capital expenditure required by any Contract set forth on Section 4.1(a)(xi) of the Debtor Disclosure Letter or capital expenditure determined in good faith by the Debtor Board to be required for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter protection of, or to avoid injury to, any Person, (B) expenditures made in response to the care or safety of any emergency, whether caused patient under the care of any facility operated by war, terrorism, weather events, public health events, outages, operational incidents the Debtor or otherwiseany of its Subsidiaries or (C) compliance with Law;
(xxii) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xiii) make any material changes with respect to any method of Tax or financial material accounting policies or procedures, except as required by changes in GAAP or applicable Law or GAAP;
(xiv) settle any litigation or other Proceeding brought against the Debtor or its Subsidiaries by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where Entity (A) the for an amount paid in settlement or compromise does not exceed excess of $25 million 100,000 individually or $100 million 1,000,000 in the aggregate for all such Proceedings (including other than any resolution of claims processing for such purpose a reasonable estimate government reimbursement in the ordinary course of anticipated royalties or similar obligationsbusiness, and excluding recoupment actions) or (B) in a manner that would impose any restrictions on its assets, operations or businesses or result in any injunction or equitable relief against the Debtor or any of its Subsidiaries;
(xv) settle any Proceeding other than against or brought by a Governmental Entity, (A) for an amount paid in settlement does not exceed the amount reserved against such matter excess of $500,000 individually or $8,000,000 in the most recent financial statements aggregate for all such Proceedings in any one-calendar-month period (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement with respect to Proceedings in the state of Pennsylvania, net of applicable insurance proceeds) or compromise does not include (B) in a manner that would impose any criminal liabilityrestrictions on its assets, material injunctive operations or businesses or result in any injunction or equitable relief or obligation to be performed by against the Company Debtor or any of its Subsidiaries other than the payment of money damagesSubsidiaries;
(xiixvi) amend, modify or terminate any Material Contract, including the Centerbridge Facility, in a manner adverse to the Debtor or its Subsidiaries;
(xvii) (A) change in any material respect any material method of accounting of the Debtor or its Subsidiaries for Tax purposes; (B) enter into any agreement with any Governmental Entity (including a “closing agreement” under Code Section 7121) with respect to any material Tax or Tax Returns of the Debtor or its Subsidiaries; (C) surrender a right of the Debtor or its Subsidiaries to a material Tax refund; (D) change an accounting period of the Debtor or its Subsidiaries with respect to any material Tax; (E) file an amended Tax Return; (F) change or revoke any material election with respect to Taxes; (G) make any material election with respect to Taxes that is inconsistent with past practice; (H) file any Tax Return that is inconsistent with past practice; or (I) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment (other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Taxbusiness);
(xiiixviii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, divest, cancel, abandon or allow to lapse or expire divest or otherwise dispose of any assetsmaterial tangible or intangible assets (including Intellectual Property Rights), licenses, operations, rights, product lines lines, businesses or businesses interests therein of the Company Debtor or its Subsidiaries, with a value in excess including the capital stock of $50 million in the aggregateany of its Subsidiaries, except for (A) sales and non-exclusive licenses of products and in connection with services of the Company and its Subsidiaries provided in the ordinary course of businessbusiness and sales or other dispositions of obsolete or worn-out assets and except for sales, leases, licenses, divestitures, cancellations, abandonments, lapses, expirations or other dispositions of assets with a fair market value not in excess of $500,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xix) (A) enter into, adopt, amend in any material respect or terminate any Company Plan (other than entry into any new employment agreement with any individual whose hiring is not restricted by, or who is otherwise hired in accordance with, clause (H) below), (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retentionaccelerate the compensation, change of controlbonus, pension, welfare, fringe or other benefits, severance or termination payments or benefits to pay of any director, consultant officer or employee of the Company Debtor or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreementsgrant any new awards, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend or modify the terms of any Benefit outstanding awards, under any Company Plan (other than routine changes grants of any new awards to welfare plans any individual whose hiring is not restricted by, or the Pension Plan made who is otherwise hired in the ordinary course of business consistent with past practiceaccordance with, clause (H) or below), (D) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or equity for the benefit of benefits under any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof)Company Plan, (DE) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Company Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit terms of any current existing Company Plan set forth on Section 2.1(h)(i) of the Debtor Disclosure Letter or former directorsGAAP, consultants(F) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any director, officers officer or employees employee of the Debtor or any of their beneficiaries; providedits Subsidiaries, however(G) terminate the employment of any officer of the Debtor or its Subsidiaries other than for “cause”, that notwithstanding anything (H) hire (x) any officer of the Debtor or its Subsidiaries with a title of Vice President or higher or (y) any employee of the Debtor or its Subsidiaries with aggregate annual base salary and target bonus of more than $250,000, except, in the case of the foregoing clauses (x) and (y), to the contrary extent jointly determined by the Chief Restructuring Officer of the Debtor (“CRO”) and the Debtor Board in their reasonable business judgment in good faith necessary in the interests of patient care (any such individual described in the foregoing clauses (A)-(Ex) and (y) and hired to replace any such employee, a “New Hire”), provided that (i) any such officer New Hire (and his or her terms and conditions of employment, including any base and target incentive compensation) hired pursuant to this clause (H) shall be reasonably acceptable to Parent and (ii) the terms and conditions of employment of any New Hire that is not an officer, including base and target incentive compensation, shall be subject to notice and consultation with Parent, or (I) make any incentive payment or payment in respect of severance or any nonqualified deferred compensation entitlement to any current or former director, officer or employee of the Debtor or its Subsidiaries (including making any payments to any rabbi trust or taking any action that would cause the trustee of any rabbi trust to make payments to any current or former director, officer or employee of the Debtor or its Subsidiaries), except, with respect to clause (I) payment of any nondiscretionary incentive payments under existing Company shall notPlans, nondiscretionary severance payments under existing Company Plans, and shall not permit any Subsidiary, without nondiscretionary payments of nonqualified deferred compensation (other than as set forth on Section 4.1(a)(xix)(I) of the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equityDebtor Disclosure Letter) or other equity-based as otherwise required by applicable Law; provided that payment in respect of any severance or equity-related awards or other similar arrangements;nonqualified deferred compensation amount in excess of $200,000 shall be subject to prior notice and consultation with Parent and, with respect to clauses (A) through (H) above,
(xv1) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than amendments to welfare plans in the ordinary course of business business, consistent with past practice;
practices that do not materially increase the costs of such welfare plans, (xvi2) allow with respect to any lapse hourly employees and salaried facility-level employees of the Debtor or abandonment its Subsidiaries, and any other employees of any material Intellectual Propertythe Debtor or its Subsidiaries whose annual base salary does not exceed $150,000, increases in compensation in the ordinary course materially consistent with the Debtor’s 2018 operating budget or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made otherwise as reasonably determined by the Company or any Subsidiary thereof CRO, in consultation with the exercise of its reasonable business judgment;
QCP Consultants, to be necessary to respond to market demand, (xvii3) enter into any transaction with any Affiliate respect to each other employee of the Company Debtor or its Subsidiaries whose annual base salary exceeds $150,000 (other than any of its Subsidiaries Eligible Employee), increases in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than compensation in the ordinary course of business consistent with past practice or expirations that do not exceed 1.5% of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms aggregate annual base salaries of such Contractother employees or 7.5% of the annual base salary for any individual and (4) as required pursuant to existing Company Plans, or as otherwise required by applicable Law;
(xx) become a party to, establish, adopt, amend, modifycommence participation in or terminate any collective bargaining agreement or other agreement with a labor union, supplement, waive, terminate, assign, convey, subject works council or similar organization;
(xxi) enter into any Contract adversely affecting in any material respect the Debtor’s or any of its Subsidiaries’ ability to a Lien use or otherwise transfer, exploit any material Intellectual Property Rights;
(xxii) fail to use commercially reasonable efforts to keep in whole or in part, rights or interest pursuant to or in any Material Contractfull force the material Insurance Policies under substantially the same levels of coverage as the current policies of the Debtor and its Subsidiaries;
(xxiii) other than renewals change in any material respect any of the ordinary course Debtor’s or its Subsidiaries’ material policies or procedures for or timing of business, amend, modify, terminate, cancel or let lapse a material insurance policy the collection of accounts receivable (or reinsurance policy) any other trade receivables), payment of accounts payable (or self-insurance program any other trade payables), billing of the Company its customers, pricing and payment terms, cash collections, cash payments or its Subsidiaries in effect as of the date hereof, unless simultaneous terms with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programssuppliers, in each case, providing coverage equal to or greater other than the coverage under the terminatedchanges required by suppliers, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force vendors and effectservice providers;
(xxiv) not exercise dismiss the QCP Consultants other than in accordance with Section 5.1(b);
(xxv) modify or amend in any rights under Section 5 respect any Contract pursuant to which HCR III or Section 6 any of its Subsidiaries currently subleases real property to any other Subsidiary of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Debtor; or
(xxvxxvi) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company Parent shall not knowingly take or permit any of their its Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with impede the consummation of the transactions contemplated by this AgreementTransactions.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Plan Sponsor Agreement, Plan Sponsor Agreement (Quality Care Properties, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, such approval not to be unreasonably withheld, delayed or conditioned), each of the Company shall, and shall cause its Subsidiaries to, shall conduct their its business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material intact its business organizations intact organization and maintain in all material respects existing relations relationships with third parties and goodwill with Governmental Entities, customers, suppliers, employees keep available the services of its present officers and business associatesemployees. Without limiting the generality of the foregoing and in furtherance thereofforegoing, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required permitted by this Agreement, (CB) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld, delayed withheld or conditioneddelayed) or (DC) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause not permit its Subsidiaries not to:
(ia) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, incorporation or bylaws or other applicable governing documentsinstruments;
(iib) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any of agreements or arrangements imposing material changes or restrictions on its Subsidiariesassets, operations or businesses;
(iiic) acquire (by mergerother than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(including Ordinary Sharesd) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) under such Contract; provided, however, that the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company foregoing shall not allow prohibit entering into, modifying or renewing the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary Contracts in the ordinary course of business and in to the extent such Contracts can be terminated after any such entering into, modification or renewal at a manner that would not have any material Tax consequences)cost of less than $200,000;
(ve) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company Company) in excess of $50,000 in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceaggregate;
(vig) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares capital stock or other equity interests the capital stock of its Subsidiaries (except for cash dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly wholly-owned Subsidiary in the ordinary course of business consistent with past practiceSubsidiary) or enter into any agreement with respect to the voting of its such capital stock or other equity interestsstock;
(viih) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs)Stock Plans;
(viiii) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any Indebtedness indebtedness for borrowed money or guarantee such Indebtedness indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness indebtedness for borrowed money under incurred in the revolving facility under the Company Credit Agreement, ordinary course of business consistent with past practices (Bi) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million 200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except for (A) expenditures as set forth in the current capital forecast budgets set forth in Section 6.1(a)(ix6.1(j) of the Company Disclosure Letter and consistent therewith, make or (B) expenditures made authorize any capital expenditure in response to excess of $200,000 in the aggregate during any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise12 month period;
(xk) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by to comply with, or to comply with changes in GAAP or Law or by a Governmental Entityin, GAAP;
(xil) except with respect to settle any litigation, audit, claim, action litigation or other Proceeding related to Tax Returns proceedings before a Governmental Entity for an amount in excess of $200,000 or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle obligation or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) liability of the Company included in the Company Reports filed prior to the date hereof and, in each case, excess of such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damagesamount;
(xiim) other than in the ordinary course of business make, adopt or to the extent required by Law, make change any material Tax electionelection or Tax accounting method, or fail to timely (taking into account all applicable extensions) file any material amended income all Tax ReturnReturns required to be filed, settle and pay all Taxes required to be paid, on or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Taxbefore the Closing Date;
(xiiin) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess including capital stock of $50 million in the aggregateany of its Subsidiaries, except for (A) sales and non-exclusive licenses or rental of products and services of the Company and its Subsidiaries inventory in the ordinary course of business, (B) any abandonment sales of Intellectual Property that the Company obsolete assets and sales, leases, licenses or any Subsidiary determines other dispositions of assets with a fair market value not in excess of $250,000 in the exercise aggregate, other than pursuant to Contracts in effect prior to the date of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of businessthis Agreement;
(xivo) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (Ai) grant, increase grant or provide any retention, change of control, severance or termination payments or benefits to any director, consultant officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Companyofficers, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (Biii) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, amend or terminate or amend any Benefit Plan or amend the terms of any outstanding equity-based awards, (other than routine changes iv) take any action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment payment, or fund or in any other way secure the payment, of any compensation or equity for the benefit of any Person or funding of benefits under any Benefit Plan (except (x) as required in connection with the termination of the Arris GroupPlan, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as extent not already provided in effect on the date hereof)any such Benefit Plan, (Dv) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP; or (Evi) except as required by Law, establish, adopt, enter into or amend forgive any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former loans to directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(ap) other than new Contracts with customers take any action or suppliers in the ordinary course of business consistent with past practice, enter into omit to take any Contract action that would have been a Material Contract had it been entered into prior is reasonably likely to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or result in any Material Contractof the conditions to the Merger set forth in Article VII not being satisfied;
(xxiiiq) other than renewals in take any action that would violate the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effectCIA;
(xxivr) not exercise knowingly take or permit any rights under Section 5 or Section 6 of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Merger; or
(xxvs) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (Encore Medical Corp), Merger Agreement (Compex Technologies Inc)
Interim Operations. (a) Except The Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement until the earlier of the Gulf Effective Time and the termination of this Agreement pursuant to Article VIII, the Company shall, and shall cause each of its Subsidiaries to, conduct their respective businesses in the Ordinary Course and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use their respective commercially reasonable efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates having significant business dealings with them and keep available the services of its and its Subsidiaries’ present officers, employees and agents, except, in each case, as otherwise expressly contemplated by this Agreement, as required by applicable Law, or otherwise approved in writing by Parent (xwhich approval shall not be unreasonably withheld, conditioned or delayed). Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the earlier of the Gulf Effective Time and the termination of this Agreement pursuant to Article VIII, except as otherwise expressly (A) contemplated by this Agreement, (B) required by applicable Law, (yC) otherwise expressly as approved in writing by Parent (which approval shall not be unreasonably withheld, conditioned or delayed), (D) required by this Agreement under any Material Contract or (zE) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws or other applicable governing documentsOrganizational Documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate itself or any of its Subsidiaries with any other Person Person, except for any such transactions among its wholly owned Subsidiaries, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any of agreements or arrangements imposing material changes or restrictions on its Subsidiariesassets, operations or businesses;
(iii) acquire (by mergerassets from any other Person with a fair market value or purchase price in excess of $500,000 individually or $1,000,000 in the aggregate in any transaction or series of related transactions, scheme in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture “holdback” or similar arrangementcontingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company or Parent, as applicable, to consummate the Transactions prior to the Outside Date;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of Encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, F▇▇▇▇▇▇▇ Agreement or (B) the issuance of Ordinary Shares pursuant shares (i) by its wholly owned Subsidiary to the it or another of its wholly owned Subsidiaries, (ii) in respect of Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect RSUs outstanding as of the date hereof (for the avoidance of doubtthis Agreement in accordance with their terms and, as applicable, the Company shall not allow Stock Plan as in effect on the commencement date of any new offering periods under the Company ESPP), this Agreement or (Ciii) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect of warrants outstanding as of the date hereof of this Agreement, or (D) the issuance securities convertible or transfer exchangeable into or exercisable for any shares of common such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other equity interests by a wholly owned Subsidiary of the Company to the Company such convertible or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)exchangeable securities;
(v) create or incur any Encumbrance having a value in excess of $200,000 individually or $500,000 in the aggregate on any of its assets or any of its Subsidiaries;
(vi) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any direct or indirect of its wholly owned Subsidiary Subsidiaries or to or from Parent and any of the Company its wholly owned Subsidiaries, as applicable) in excess of $200,000 individually or $500,000 in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceaggregate;
(vivii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company it or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsSubsidiary);
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition withholding of any Ordinary Shares tendered by current or former employees or directors in order shares of Company Common Stock to pay Taxes in connection with satisfy withholding Tax obligations upon the vesting or settlement of Company RSUs)RSUs outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Company Stock Plan as in effect on the date of this Agreement;
(viiiix) incur any Indebtedness or guarantee such Indebtedness (including the issuance of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security of the Company or any of its Subsidiariessecurity), except for (A) Indebtedness for borrowed money under incurred in the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount Ordinary Course not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize 200,000 individually or make any capital expenditures in excess of $40 million 500,000 in the aggregate, or (B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced;
(x) except for (A) expenditures to the extent expressly provided by, and consistent with the line items set forth in in, the current Company’s capital forecast budget set forth in Section 6.1(a)(ix6.1(a)(x) of the Company Disclosure Letter Letter, make or (B) expenditures made in response to authorize any emergencypayment of, whether caused by waror accrual or commitment for, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entitycapital expenditures;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement or (b) other than amend or modify in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modifymaterial respect, supplement, waivewaive any material term, terminate, assign, convey, subject to a Lien encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Company Material Contract, other than expirations of any such Contract in the Ordinary Course in accordance with the terms of such Contract;
(xxiiixii) cancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries having in each case a value in excess of $200,000 individually or $500,000 in the aggregate;
(xiii) settle any Proceeding for an amount in excess of $200,000 individually or $500,000 in the aggregate or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any Governmental Order that would restrict the future activity or conduct of it or any of its Subsidiaries in any material respect or a finding or admission of a material violation of Law or material violation of the rights of any Person;
(xiv) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or applicable Law;
(xv) enter into any line of business in any geographic area, other than the existing lines of business of the Company and its Subsidiaries solely within the United States;
(xvi) materially modify, cancel, terminate, rescind or adversely affect any Company Material License;
(xvii) other than renewals in the ordinary course Ordinary Course, make, change or revoke any material Tax election, change any annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return in respect of businessmaterial Taxes, amendenter into any closing agreement with respect to Taxes or settle any material Tax claim, modifyaudit, terminateassessment or dispute, cancel or let lapse surrender any right to claim a material insurance policy (refund, agree to an extension or reinsurance policy) waiver of the statute of limitations with respect to the assessment or self-insurance program determination of any material Tax, or take any other action with respect to Taxes which is reasonably likely to result in a material increase in the Tax liability of the Company or its Subsidiaries Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(xviii) transfer, sell, lease, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Encumbrance upon, any assets (tangible or intangible), product lines or businesses of the Company or any of its Subsidiaries, including capital stock of the Company and any of its Subsidiaries, except in connection with non-exclusive licenses or services provided in the Ordinary Course and sales of obsolete assets and except for sales, leases, licenses or other dispositions of tangible assets (not including services) with a fair market value not in excess of $200,000 individually or $500,000 in the aggregate;
(xix) cancel, abandon or otherwise allow to lapse or expire any material Company Intellectual Property Rights that are Registered;
(xx) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date hereofof this Agreement or in the Ordinary Course, unless simultaneous (A) increase the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company Benefit Plan, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (E) forgive any loans or issue any loans (other than routine travel advances issued in the Ordinary Course) to any Company Employee or (F) hire any employee or engage any independent contractor (who is a natural person) with such terminationan annual salary or wage rate or consulting fees in excess of $250,000;
(xxi) become a party to, cancellation establish, adopt, amend, commence participation in or lapseterminate any collective bargaining agreement or other agreement with a labor union, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing works council or self-similar organization;
(xxii) utilize government borrowing, grant programs, or social insurance programs, such as the CARES Act, in each casecase related to the COVID-19 pandemic;
(xxiii) make or authorize any payment or spending, providing coverage equal or accrual or commitment for any payment or spending (including payment or spending with respect to advertising and marketing activities), in connection with entering into any new geographic area or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effectnew line of business;
(xxiv) not exercise apply or seek to apply for any rights under Section 5 or Section 6 license that, if granted, would be reasonably expected to be a Company Material License had it been granted prior to date of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)this Agreement; or
(xxv) agree, authorize or commit to do any of the foregoing. Notwithstanding the foregoing, any action or inaction taken by the Company or any of its Subsidiaries, to the extent required by applicable Law, directive, guidelines or recommendations, to address the COVID-19 pandemic (including, to the extent required by applicable Law, compliance with any quarantine, “shelter in place,” “stay at home,” social distancing, shut down, closure, sequester, safety, or similar Law, directive, guidelines or recommendations promulgated by any Governmental Entity, including the Centers for Disease Control that is outside of the Ordinary Course shall not be deemed to be a breach of this Section 6.1, provided that the Company consults with Parent prior to taking any such action.
(b) Neither Buyer nor Parent covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement until the earlier of the Gulf Effective Time and the termination of this Agreement pursuant to Article VIII (unless the Company shall knowingly take otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or permit delayed)), except as otherwise expressly (A) contemplated by this Agreement, (B) required by applicable Law, (C) required under Contracts to which Parent or any of their its Subsidiaries to take is a party or (D) set forth on Section 6.1(b) of the Parent Disclosure Letter, Parent shall not, and shall cause its Subsidiaries not to:
(i) adopt or propose any action change in Parent’s Organizational Documents in any manner that is reasonably likely to prevent or materially interfere with would prohibit the consummation of the transactions contemplated Transactions; provided, that any amendment to Parent’s articles of incorporation to increase the authorized number of shares or series of the capital stock of Parent shall in no way be restricted by this Agreementthe foregoing;
(ii) 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 (except for dividends paid by any direct or indirect wholly owned Subsidiary to it or to any other direct or indirect wholly owned Subsidiary);
(iii) split, combine, reduce or reclassify any of its issued or unissued shares of its capital stock, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, any shares of its capital stock in any manner that would reasonably be expected to have a material and adverse impact on the value of the Parent Class A Common Stock; or
(iv) agree, authorize or commit to do any of the foregoing.
(c) The Company Nothing contained in this Agreement shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth give Parent or the Company, directly or indirectly, the right to control or direct the other Party’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended operations prior to the Closing Date)Gulf Effective Time. Prior to the Gulf Effective Time, certifying each Party will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations. Notwithstanding anything in this Agreement to the contrary, no consent of Parent or the Company shall be required with respect to any matter set forth in this Section 6.1 or elsewhere in this Agreement to the extent that each the requirement of such Subsidiary does not own any U.S. real property iconsent would, upon the advice of legal counsel, violate applicable Antitrust Law.
Appears in 2 contracts
Sources: Merger Agreement (DraftKings Inc.), Merger Agreement (Golden Nugget Online Gaming, Inc.)
Interim Operations. (a) Except From the date of this Agreement and until the Effective Time or the earlier termination of this Agreement, except as (w) otherwise expressly contemplated by this Agreement, (x) required by applicable Law, Laws (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time Letter or the termination of this Agreement (z) consented to in accordance with its terms writing by Parent (unless Buyer shall otherwise approve in writing, such approval which consent will not to be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company shallwill, and shall will cause each of its Subsidiaries to, conduct their its business in the ordinary course of business consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shallLaws, and shall will, and will cause each of its SubsidiariesSubsidiaries to, to use their respective its reasonable best efforts to preserve their material intact its present business organizations intact organization, maintain in effect all of its Permits, keep available the services of its directors, officers and employees and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliersdistributors, employees lenders, partners, suppliers and others having material business associatesassociations with it or its Subsidiaries. Without limiting the generality of the foregoing and subject to the exceptions set forth in furtherance thereofthe foregoing clauses (w), (x), (y) and (z), from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure LetterTime, the Company will not and will cause not permit its Subsidiaries not toto do any of the following:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, incorporation or bylaws or such other similar applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiariesliquidate;
(iii) other than capital expenditures covered by clause (x) below, acquire assets (whether by merger, scheme of arrangementtender offer, consolidation, acquisition purchase of stock or assets property or otherwise) outside of the ordinary course of business from any corporation, partnership other Person with a value or other business organization purchase price in the aggregate in excess of $10,000,000 in any transaction or any assets constituting a division or business line series of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementrelated transactions;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities including Shares and/or Class B Shares (other than (A) the issuance issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary Subsidiary) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except for the issuance of Shares pursuant to awards or rights outstanding as of the date of this Agreement in accordance with the ordinary course terms of business and the Stock Plans, or as may be granted in a manner that would not have any material Tax consequences)accordance with, or otherwise in compliance with, the terms of this Agreement;
(v) create or incur any material Lien on any of the assets including any material Owned Intellectual Property, other than Permitted Liens;
(vi) make or forgive any loans, advances or capital contributions to to, guarantees of or investments in any Person (other than to any (1) between or among the Company and/or one or more direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesor (2) other than extending trade credit to customers and advancing business expenses to employees, in each case, advances made in the ordinary course of business consistent with past practicepractice to employees of the Company and its Subsidiaries for reimbursement of routine travel or business expenses in accordance with the terms of the applicable policy in effect on the date of this Agreement);
(vivii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary or any dividends required to be paid under any credit facility filed as an exhibit in the ordinary course Company Reports filed with the SEC since June 28, 2014); provided, that the Company may make, declare and pay one regular quarterly cash dividend in each quarter of business the fiscal year with a record date consistent with past practicethe record date for each quarterly period for the fiscal year ended June 27, 2015; provided, further, that such dividend per share shall not exceed (A) or enter into any agreement $0.39 per quarter for dividends with respect to the voting of its capital stock or other equity interestsfiscal year 2017 and (B) $0.41 per quarter for dividends with respect to fiscal year 2018;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or securities convertible or exchangeable into or exercisable for any shares of capital stock of the Company or any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs)Subsidiaries;
(viiiix) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)Indebtedness, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for Indebtedness (A) that is to be paid off in full and without penalty at or prior to the Effective Time and (i) incurred in the ordinary course of business consistent with past practice pursuant to existing Contracts, or (ii) incurred to replace, renew, extend, refinance or refund any existing Indebtedness for borrowed money under the revolving facility under of the Company Credit Agreementor any of its Subsidiaries, (B) loans incurred as intercompany Indebtedness solely among the Company and its direct or advances to indirect wholly owned Subsidiaries and or among the Company’s wholly owned Subsidiaries or (C) other Indebtedness in an amount not to exceed an $10,000,000 in aggregate principal amount outstanding at any time incurred by the Company or any of $15 million;
(ix) shall not authorize its Subsidiaries that is to be paid off in full and without penalty at or make any capital expenditures prior to the Effective Time other than in excess of $40 million in the aggregate, except for accordance with clauses (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or through (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise);
(x) make or authorize any capital expenditures or series of related capital expenditures that are not in the ordinary course of business consistent with past practice;
(xi) (A) except as required by Law (including the legal obligation under the National Labor Relations Act or similar national and provincial Canadian laws to bargain in good faith to reach a labor contract with a labor organization that has been certified as the bargaining agent for the designated employee group) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend or modify in a material manner or terminate any Material Contract, or cancel, modify in a material manner or waive any debts, rights, or claims thereunder (other than as permitted pursuant to Section 6.1(a)(ix));
(xii) make any changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entityapplicable GAAP;
(xixiii) except with respect to any litigation(A) waive, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17release, settle or compromise any litigation, audit, claim, action or other Proceedings pending Action against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where Action (A1) in which the amount paid by or on behalf of the Company or any of its Subsidiaries in settlement or compromise does not exceed $25 million 1,000,000 individually or $100 million 3,000,000 in the aggregate and (including for such purpose a reasonable estimate 2) that would not impose any material restrictions on the business or operations of anticipated royalties the Company or similar obligations) its Subsidiaries or (B) the amount paid commence, join or appeal in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof andany Action, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business business;
(xiv) (A) make or to the extent required by Law, make change any material Tax election, (B) change the Company’s or any of its Subsidiaries’ method of accounting for Tax purposes, (C) file any material amended income Tax Return, settle (D) settle, concede, compromise or compromise abandon any material amount of Tax Liabilityclaim or assessment, enter into any closing agreement with respect to any material amount of Tax or (E) surrender any right to claim a refund for a of material amount Taxes or (F) consent to any extension or waiver of Taxthe limitation period applicable to any claim or assessment with respect to material Taxes;
(xiiixv) fail to use commercially reasonable efforts to maintain in full force and effect the Insurance Policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice;
(xvi) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assetsmaterial assets (including any material Owned Intellectual Property), licenses, operations, product lines lines, businesses or businesses interests of the Company or its Subsidiaries, with a value including capital stock of any of its Subsidiaries, in excess of $50 million in the aggregate, each case except for (A1) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of businessbusiness consistent with past practice, (B2) any abandonment for sales of Intellectual Property that the Company obsolete assets or any Subsidiary determines (3) for transactions involving a de minimis amount of assets in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of businessaggregate;
(xivxvii) except as required pursuant to existing written Benefit Plans in effect prior to the date of this Agreement or as otherwise required by applicable Law and except as contemplated by this Agreement, (A) grantpay, increase grant or provide any retention, change of control, severance or termination payments or benefits to any director, consultant officer, contractor or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, ; (B) increase in any manner the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus, incentive or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) retention payments to, or grant or increase make any bonuses to, equity awards to any director, consultant officer, contractor or employee of the Company or any of its Subsidiaries, except (1) for increases in the case of employees or consultants who are not executive officers of the Company, base salary in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of for employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, not officers; (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, amend or terminate or amend any Benefit Plan or amend the terms of any outstanding equity-based awards; (other than routine changes D) take any action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment payment, or fund or in any other way secure the payment, of any compensation or equity for the benefit of any Person or funding of benefits under any Benefit Plan Plan; (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (DE) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or GAAP; (EF) except as required by Law, establish, adopt, enter into or amend forgive any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former loans to directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries; or (G) hire or terminate without cause any executive officer or any employee with a target annual compensation opportunity in excess of $200,000, other than any such hire that is a replacement hire to fill a position in existence as of the date of this Agreement;
(axviii) other than new Contracts in compliance with customers Section 6.2, take any action or suppliers omit to take any action that is reasonably likely to result in any of the ordinary course conditions to the Merger set forth in Article VII not being satisfied;
(xix) communicate with the directors, officers, employees or consultants of business consistent the Company regarding the compensation, benefits or other treatment they will receive in connection with past practicethe Merger or after the Closing, enter into any Contract other than communications that would have been a Material Contract had it been entered into prior to are not inconsistent with (a) the terms of this Agreement or (b) other than in the ordinary course of business consistent with past practice previous public announcements or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)communications; or
(xxvxx) agree, authorize or commit to do any of the foregoingforegoing actions or enter into any Contracts with respect to any of the foregoing actions.
(b) Neither Buyer nor Nothing contained in this Agreement is intended to give Parent or Merger Sub the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, each of Parent and the Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere will exercise, consistent with the consummation terms and conditions of the transactions contemplated by this Agreement, complete control and supervision over their respective operations.
(c) The From and after the date of this Agreement, the Company shall use will notify Parent promptly of any notice or other communication received by the Company or any of its reasonable efforts to cause to be delivered to Buyer at Subsidiaries from the Closing (i) executed affidavits dated as PBGC regarding any defined benefit pension plan of the Closing Date Company or any of its Subsidiaries other than routine notices in the ordinary course of business. In the event of any such notice or communication, the Company will consult with Parent with respect to any communications with the PBGC or its representatives and will act in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iLetter.
Appears in 2 contracts
Sources: Merger Agreement (G&k Services Inc), Merger Agreement (Cintas Corp)
Interim Operations. (a) Except The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (x) unless Parent shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement or as required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants shall use its reasonable best effort to conduct its business and agrees that, after the date hereof and until the earlier that of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business Subsidiaries’ in the ordinary course consistent with past practice and in compliance with all applicable Laws Ordinary Course and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact intact, including their material Intellectual Property Rights, Company Material Contracts and other material assets, and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associatesassociates and keep available the services of its and its Subsidiaries’ present officers, employees and agents, except as required by applicable Law. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as otherwise expressly (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (B) required by applicable Law, (C) Buyer may approve as approved in writing (such which approval shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed) by Parent or (D) as set forth in the corresponding subsection of Section 6.1 6.1(a) of the Company Disclosure Letter, the Company will shall not and will shall cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws or other applicable governing documentsOrganizational Documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate itself or any of its Subsidiaries with any other Person Person, except for any such transactions among its wholly owned Subsidiaries, or restructure, consolidate, recapitalize, reorganize or completely or partially liquidate the Company liquidate, dissolve or otherwise enter into any of agreements or arrangements imposing material changes or restrictions on its Subsidiariesassets, operations or businesses;
(iii) acquire acquire, directly or indirectly (including by merger, scheme of arrangement, consolidation, operation of law, or acquisition of stock shares, other equity interests or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of combination), any Person or any equity interests division, business, assets or properties of any other Person or enter into make any joint venture investment in any other Person, in each case, with a fair market value or purchase price in excess of one million dollars ($1,000,000) in the aggregate in any transaction or series of related transactions, in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar arrangementcontingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company or Parent, as applicable, to consummate the Transactions prior to the Outside Date, other than acquisitions of inventory or other goods in the Ordinary Course pursuant to and in accordance with the terms of Company Material Contracts in effect as of the date of this Agreement, true, correct and complete copies of which have been made available to Parent prior to the date of this Agreement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of Encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities rights, warrants or Other Subsidiary Securities options to acquire any such shares or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units (other than the issuance of shares (A) the issuance by its wholly owned Subsidiary to it or another of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereofits wholly owned Subsidiaries, (B) the issuance in respect of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to Options outstanding as of the date hereof and only of this Agreement in accordance with such Company ESPP their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement, or (C) Company Options issued to new employees of the Company or its Subsidiaries in the Ordinary Course and in accordance with the Stock Plans as in effect on the date of this Agreement; provided that any Company Options issued pursuant to clause (C) will (w) not exceed 150,000 Company Ordinary Shares in the aggregate on a fully diluted basis, (x) have terms consistent with grant terms and amounts as Company Options granted to similarly situated employees, (y) be subject to the standard four (4) year vesting schedule as existing Company Options as of the date hereof and (z) not provide for accelerated vesting upon a termination of employment or a change in control of the avoidance Company), or securities convertible or exchangeable into or exercisable for any shares of doubtsuch capital stock, the Company shall not allow the commencement or any options, warrants or other rights of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as kind to acquire any shares of the date hereof or (D) the issuance or transfer of common such capital stock or other equity interests by a wholly owned Subsidiary of the Company to the Company such convertible or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)exchangeable securities;
(v) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any direct or indirect of its wholly owned Subsidiary Subsidiaries) in excess of the Company one million dollars ($1,000,000) in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceaggregate;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company it or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsSubsidiary);
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition withholding of any Company Ordinary Shares tendered by current to satisfy withholding Tax obligations upon the exercise, vesting or former employees or directors in order to pay Taxes in connection with the vesting settlement of Company RSUs)Options outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement;
(viii) incur any Indebtedness or guarantee such Indebtedness (including the issuance of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security security) in excess of one million dollars ($1,000,000) in the aggregate;
(ix) make or authorize any payment of, or accrual or commitment for, capital expenditures other than in accordance with the capital expenditures budget set forth on Section 6.1(a)(ix) of the Company Disclosure Letter;
(x) enter into any Contract that would have been a Company Material Contract that is specified in clause (iii), (vi), (vii), (ix), (xi), (xv) or (xvii) in Section 4.18(a) or any Government Grant that would have been a Company Material Contract that is specified in clause (xix) in Section 4.18(a) had it been entered into prior to this Agreement or amend, modify, supplement, waive, terminate, assign, convey, encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any such Company Material Contract, other than (1) expirations of any such Contract in the Ordinary Course in accordance with the terms of such Contract, or (2) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other rights under Intellectual Property Rights owned by the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under in each case, granted in the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 millionOrdinary Course;
(ixxi) shall not authorize cancel, modify or make waive any capital expenditures debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries having in each case a value in excess of one million dollars ($40 million 1,000,000) in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(xxii) (i) settle, pay, discharge or satisfy any Proceeding for an amount in excess of one million dollars ($1,000,000) in the aggregate or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any Governmental Order that would restrict in all material respects the future activity or conduct of it or any of its Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person or (ii) institute any Proceeding by the Company or any Company Subsidiary, other than in the Ordinary Course;
(xiii) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or any similar Law or by a Governmental Entityfinancial accounting standard;
(xixiv) except with respect enter into any new line of business that would be material to any litigationthe Company’s consolidated operations or that would reasonably be expected to prevent, audit, claim, action materially delay or other Proceeding related to Tax Returns or any Tax Liability (which, for materially impair the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) ability of the Company included in to consummate the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damagesTransactions;
(xiixv) other than in the ordinary course of business make, change or to the extent required by Law, make revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any amended material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to material Taxes, settle any material amount of Tax claim, audit, assessment or dispute, surrender any right to claim a refund for of a material amount of Taxes, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax, or take any action which is reasonably likely to result in a material increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(xiiixvi) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire cancel or otherwise dispose of, or permit or suffer to exist the creation of any assetsEncumbrance upon, any assets (tangible or intangible), product lines or businesses of the Company it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with services provided in the Ordinary Course and sales of obsolete assets and except for sales, leases, licenses or other dispositions of tangible assets (not including services) with a fair market value not in excess of one million dollars ($50 million 1,000,000) in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xivxvii) (A) grantcancel, increase abandon or provide otherwise allow to lapse or expire any retention, change of control, severance or termination payments or benefits Intellectual Property Rights that are material to any director, consultant or employee the businesses of the Company or any of its Subsidiaries;
(xviii) alter the operation or security of any IT Assets owned, except, used or held for use in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee operation of the Company and its Subsidiaries businesses in a manner that would be materially less protective of any confidential or proprietary information that is in the Company’s or any of its Subsidiaries’ possession or control, except including any information stored on or processed by such IT Assets;
(1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (Cxix) except as required by under applicable Law or as required by agreements, plans, programs or arrangements pursuant to the terms of any Company Benefit Plan in effect on as of the date hereofof this Agreement and set forth in Section 6.1(a)(xix) of the Company Disclosure Letter, (A) increase the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, in each case, other than increases of up to 7.5% in the Ordinary Course in respect of any Company Employee who (i) is not a Key Employee or (ii) earns a salary, wage rate or consulting fees (as applicable) and target cash bonus opportunity that exceeds $250,000 on an annual basis (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company Benefit Plan (Plan, in each case, other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required Ordinary Course and in connection accordance with the termination Company’s policies and procedures with respect to granting, amending or modifying awards and, with respect to grants of the Arris Groupnew awards, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereofaccordance with Section 6.1(a)(iv), (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (E) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to materially change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP, (F) forgive any loans or issue any loans (other than routine travel advances issued in the Ordinary Course) to any Company Employee, (G) hire any employee or engage any independent contractor (who is a natural person) whose salary, wage rate or consulting fees (as applicable) and target cash bonus opportunity exceed $250,000 in the aggregate on an annual basis or (EH) except as required by Lawterminate the employment of any executive officer or any Company Employee who is eligible to receive payments or benefits upon a termination of employment in connection with a change in control, other than, in each case, for cause;
(xx) become a party to, establish, adopt, enter into amend, commence participation in or amend terminate any collective bargaining agreement, agreement or other agreement with a labor union, plan, trust, fund, policy works council or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000employee representative organization, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment pursuant to applicable Law or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a programextension orders;
(xxi) enter into any new line of business outside of its existing business cancel or fail to use commercially reasonable efforts to replace or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its SubsidiariesInsurance Policies;
(axxii) other than new Contracts with customers take any action or suppliers in the ordinary course of business consistent with past practice, enter into fail to take any Contract action that would have been a Material Contract had it been entered into prior is reasonably likely to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or result in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries conditions to the Merger set forth in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) Article VII not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)being satisfied; or
(xxvxxiii) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Parent covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless the Company shall knowingly take otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or permit any delayed)), except as otherwise expressly contemplated by this Agreement or required by applicable Law, Parent shall use its reasonable best effort to conduct its business and that of its Subsidiaries’ in the Ordinary Course and, to the extent consistent therewith, it and its Subsidiaries shall use their Subsidiaries respective reasonable best efforts to take any action that is reasonably likely to prevent or materially interfere preserve their business organization intact, including their material Intellectual Property Rights, material Contracts and other material assets, and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the consummation services of it and its Subsidiaries; present officers, employees and agents, except as required by applicable Law. Without limiting the generality of and in furtherance of the transactions foregoing, from the date of this Agreement until the Effective Time, except as otherwise expressly (A) contemplated by this Agreement., (B) required by applicable Law, (C) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed) by the Company, (D) as set forth on the corresponding subsection of Section 6.1(b) of the Parent Disclosure Letter or (E) in connection with or required to effectuate the Stock Split, the Sale Transactions, Parent shall not, and shall cause its Subsidiaries not to:
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as adopt or propose any change in Parent’s Organizational Documents in any manner that would prevent, materially delay or materially impair the ability of Parent to consummate the Transactions; provided, that any amendment to Parent’s certificate of incorporation to increase the authorized number of shares or series of the Closing Date capital stock of Parent shall in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of no way be restricted by the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and foregoing;
(ii) executed affidavits dated as merge or consolidate itself or any of its Subsidiaries with any other Person or restructure, consolidate, recapitalize, reorganize or completely or partially liquidate, dissolve, in each case, except for any such transactions among its wholly owned Subsidiaries or any Parent Permitted Acquisitions;
(iii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to the Closing Date)voting of, certifying that each any shares of capital stock of Parent or any of its Subsidiaries or any right, warrants or options to acquire such Subsidiary does not own shares or any U.S. real property i“phantom” stock, “phantom” stock rights, stock appreciation rights or stoc
Appears in 2 contracts
Sources: Merger Agreement (Rada Electronic Industries LTD), Merger Agreement (Leonardo DRS, Inc.)
Interim Operations. 1
(a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the The Company Disclosure Letter, the Company covenants and agrees that, after during the period from the date hereof and until of this Agreement through the earlier of the Effective Time Closing or the termination of this Agreement in accordance with its terms Agreement, except (unless Buyer 1) to the extent Parent shall otherwise approve give its prior consent in writing, writing (such approval consent not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (2) as set forth in Section 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements, or (4) as expressly required by this Agreement, the Company shall, and shall cause its the Company Subsidiaries to, use commercially reasonable efforts to conduct their its business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to of business; provided that any action expressly permitted by the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality remaining provisions of this Section 4.1(a) (including Section 4.1(a) of the foregoing and in furtherance thereof, Company Disclosure Schedule) will not constitute a violation of the foregoing. During the period from the date of this Agreement until through the earlier of the Effective Time Closing or the termination of this Agreement in accordance with its termsAgreement, except as (A) required by applicable Law to the extent Parent shall otherwise give its prior consent in writing (in the case of subsections (iv), (vi), (viii), (ix), (x), (xii), (xiii), and (xvii) of this Section 4.1(a), such consent not to be unreasonably withheld, conditioned or as contemplated by the Scheme Document Annexdelayed), (B) otherwise as set forth in Section 4.1(a) of the Company Disclosure Schedule, (C) as may be required by applicable Legal Requirements, or (D) as expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the shall not (and shall not permit any Company will not and will cause its Subsidiaries not Subsidiary to:):
(i) amend the Company’s Organizational Documents or otherwise change, or authorize or propose to amend or otherwise change its articles the Organizational Documents of association, certificate of incorporation, bylaws or other applicable governing documentsany Company Subsidiary;
(ii) mergesplit, enter into any scheme combine, subdivide, change, exchange, amend the terms of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of reclassify any shares of the Company’s capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the or any Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)Subsidiary;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(viiii) declare, set aside, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property stock or otherwise, property) with respect to any shares of its shares the Company’s capital stock or the capital stock or other equity interests (except for cash interest of any Company Subsidiary, other than dividends or distributions only to the extent paid by any direct or indirect wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person (other than investments in equity securities that constitute short term investments that are accounted for as cash equivalents), (C) any business or division of another Person, or (D) any material assets except, (1) acquisitions by the Company from any wholly owned Company Subsidiary or among any wholly owned Company Subsidiaries; (2) the purchase of equipment, supplies and inventory in the ordinary course of business or (3) inbound licenses or other grants or assignments of Intellectual Property in the ordinary course of business;
1 Note to W&S: Subject to ongoing review by the Company.
(v) except in connection with any transaction between the Company and any wholly owned Company Subsidiary or among any wholly owned Company Subsidiaries, issue, sell, grant or otherwise permit to become outstanding any additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to acquire, any shares of its capital stock or other equity interests, other than shares of Company Common Stock issuable upon exercise of outstanding Company Options;
(vi) except in connection with any transaction between the Company and any wholly owned Company Subsidiary or among any wholly owned Company Subsidiaries, sell, assign, transfer, lease or license to any third party, or incur any Lien on any of its material tangible property or tangible assets, except for Company Permitted Encumbrances, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any material Company IP or material tangible assets of the Company, other direct than: (A) sales of inventory, goods or indirect wholly owned Subsidiary services in the ordinary course of business in a manner consistent with past practice or of obsolete equipment or assets in the ordinary course of business consistent with past practice; (B) pursuant to written Contracts or enter into commitments existing as of the date of this Agreement; or (C) as security for any agreement with respect borrowings permitted by Section 4.1(a)(viii); or (D) licenses granted to the voting of its capital stock customers or other equity intereststhird parties in the ordinary course of business in a manner consistent with past practice;
(vii) reclassifydirectly or indirectly repurchase, split, combine, subdivide or redeem, purchase redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock, Company Securities the Company’s or any Other Subsidiary Securities Company Subsidiary’s capital stock or equity interests, or any other securities or obligations convertible (other than currently or after the acquisition passage of time or the occurrence of certain events) into or exchangeable for any Ordinary Shares tendered by current shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, except: (A) shares of Company Common Stock repurchased from employees or consultants or former employees or directors in order consultants of the Company pursuant to pay the exercise of repurchase rights existing prior to the date of this Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of Company Options or for withholding Taxes incurred in connection with the exercise, vesting or settlement of Company RSUs)Options, as applicable, in accordance with the terms of the applicable award;
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesother than draws on existing revolving loans), redeem, repurchase, prepay (other than prepayments of revolving loans), defease, or cancel any indebtedness for borrowed money, guarantee any such indebtedness, issue or sell any debt securities or warrants or other rights to acquire any debt security securities (directly, contingently or otherwise) or make any loans or capital contributions to any other Person, except for any indebtedness among the Company and its wholly owned Company Subsidiaries or among any wholly owned Company Subsidiaries (and guarantees by the Company or the Company Subsidiaries in respect thereof);
(ix) (A) adopt, terminate or amend any Company Plan except to the extent permitted by clauses (B), (C), (D) or (E) of this Section 4.1(a)(ix), (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any member of the Company Board, current employee, or former employee of the Company or any of its SubsidiariesCompany Subsidiary, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) grant any rights to severance, retention, change in control or termination pay to any member of the Company Board, current employee or former employee of the Company or any Company Subsidiary, (D) hire or promote any employee at or to the level of Vice President or above, or (E) terminate the employment of any employee of the Company or any Company Subsidiary whose annual base salary exceeds $100,000 (other Indebtedness than for cause); except, in each case, for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; (2) hiring any Person for employment (including by means of internal promotion) to fill any currently existing Vice President or higher position that becomes vacant after the date of this Agreement, and, notwithstanding anything to the contrary in this Section 4.1(a)(ix), provide such Person with compensation and benefits for such position consistent with past practice; (3) hiring any Person for employment in accordance with the Company’s present hiring plan made available to Parent or otherwise hiring an amount not to exceed an aggregate principal amount individual below the level of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million Vice President in the aggregateordinary course of business in a manner consistent with past practice; (4) increases in compensation or benefits required pursuant to any Company Plan in effect on the date hereof; (5) increases to total target cash opportunities (i.e., except for (Aannual base salary or wage rates and target annual cash bonus opportunities) expenditures set forth in amounts that are in the current capital forecast ordinary course of business in a manner consistent with past practice; and (6) any other actions set forth in Section 6.1(a)(ix4.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwiseSchedule;
(x) make except in the ordinary course of business, (i)(A) amend or terminate (except for terminations pursuant to the expiration of the existing term of any Material Contract) any Material Contract or (B) waive, release or assign any material changes with respect to rights under any method Material Contracts, or (ii) enter into any Contract or agreement that, if in effect on the date of Tax or this Agreement, would constitute a Material Contract;
(xi) change any of its methods of financial accounting policies or procedures, except accounting practices in any material respect other than as required by changes in GAAP or Law or by a Governmental EntityGAAP;
(xixii) make (except with respect for elections made in the ordinary course of business), change or revoke any material Tax election, change any Tax accounting period or material method of Tax accounting, amend any material Tax Return if such amendment would reasonably be expected to result in a material Tax liability, settle or compromise any litigation, material liability for Taxes or any Tax audit, claim, action or other Proceeding related proceeding relating to a material amount of Taxes, enter into any agreement with a Governmental Entity relating to Taxes if such agreement would reasonably be expected to result in a material Tax Returns liability, request any Tax ruling from any Governmental Entity, surrender any right to claim a material refund of Taxes, or, other than in the ordinary course of business, agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes;
(xiii) other than consignment of Company Products in the ordinary course of business, make any capital expenditure that is not contemplated by the capital expenditure budget (the “CapEx Budget”) set forth in Section 4.1(a)(xiii) of the Company Disclosure Schedule (a “Non-Budgeted Capital Expenditure”), except that the Company or any Tax Liability Company Subsidiary may make any Non-Budgeted Capital Expenditure that, when added to all other Non-Budgeted Capital Expenditures made by the Company and the Company Subsidiaries since the date of this Agreement would not, in the aggregate, exceed the aggregate CapEx Budget by more than $100,000;
(whichxiv) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, for convene (A) any special meeting of the avoidance Company’s shareholders other than the Company Shareholder Meeting or (B) any other meeting of doubtthe Company’s shareholders to consider a proposal that would reasonably be expected to impair, shall be governed by Section 6.1(a)(xiiprevent or delay the consummation of the transactions contemplated hereby;
(xv) enter into any agreement, understanding or arrangement with respect to the voting of any capital stock or other equity interests of the Company (including any voting trust), other than with respect to awards under the Company Equity Plans otherwise permitted under this Agreement or in connection with the granting of revocable proxies in connection with any meeting of the Company’s shareholders;
(xvi) and subject to Section 6.17adopt a plan of (A) complete or partial liquidation of the Company or any Company Subsidiary or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization, other than, in the case of clause (B), transactions between or among direct or indirect wholly owned Company Subsidiaries;
(xvii) settle or compromise any litigation, auditclaim, claimsuit, action or proceeding, except for settlements or compromises other Proceedings than (A) the payment, discharge or satisfaction, in the ordinary course of business in a manner consistent with past practice, of liabilities reflected or reserved against in the Most Recent Company Balance Sheet, or (B) those that do not (x) impose any injunctive relief on the Company or any of its Subsidiaries Company Subsidiary (other than settlements confidentiality obligations), (y) involve the payment of money greater than $100,000 in excess of existing insurance coverage, and (z) do not include an admission of liability or compromises fault on the part of the Company or any litigation, audit, claim, action Company Subsidiary;
(xviii) materially reduce the amount of insurance coverage or other Proceedings where fail to renew or maintain any material existing insurance policies;
(xix) (A) amend any Company Permits in a manner that adversely impacts the amount paid Company’s ability to conduct its business in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) any material respect or (B) the amount paid terminate or allow to lapse any material Company Permits;
(xx) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to any material Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than in settlement does not exceed the amount reserved against such matter its reasonable business judgment or in the most recent financial statements ordinary course of business in a manner consistent with past practice, or (or B) authorize the notes thereto) disclosure to any third party of the Company any material Trade Secret included in the Company Reports filed prior to the date hereof andIP in a way that results in loss of trade secret protection, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim in a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvixxi) allow take or cause to be taken any lapse or abandonment of any material Intellectual Propertyaction, or knowingly fail to take or cause to be taken any registration action, which action or grant thereof, or any application related thereto failure to which, or under which, act would reasonably be expected to (A) prevent the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by Merger from qualifying as a reorganization within the Company or any Subsidiary thereof in the exercise meaning of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402Section 368(a) of the Company Code or (or B) result in any immediate family member or Affiliate of the foregoing) providing for payments by or conditions to the Company or any Subsidiary thereof Mergers set forth in excess of $120,000, other than the agreements expressly contemplated by this Agreement;ARTICLE V not being satisfied; or
(xviiixxii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employeesauthorize, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew approve or enter into any non-compete agreement or exclusivity agreement that would restrict or limit, in make any material respect, the operations commitment to take any of the Company or any actions described in clauses (i) through (xxi) of its Subsidiaries;this Section 4.1(a).
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent the Company shall otherwise give its prior consent in writing (such consent not to be withheld, conditioned or delayed), (2) as set forth in Section 4.1(b) of the ordinary course of Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements, or (4) as expressly required by this Agreement, Parent shall, and shall cause the Parent Subsidiaries to, use commercially reasonable efforts to conduct its business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business. Parent agrees that, amendduring the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, modifyexcept (A) to the extent the Company shall otherwise give its prior consent in writing, terminate(B) as set forth in Section 4.1(b) of the Parent Disclosure Schedule, cancel (C) as may be required by applicable Legal Requirements, or let lapse a (D) as expressly permitted or required by this Agreement, Parent shall not (and shall not permit any Parent Subsidiary to):
(i) amend Parent’s or either of the Acquisition Subs’ Organizational Documents or amend the Organizational Documents of any Parent Subsidiary in any manner that would be adverse in any material insurance policy respect to the holders of Company Common Stock (or reinsurance policyafter giving effect to the Mergers) or self-insurance program materially delay or materially impair the ability of Parent to consummate the Mergers;
(ii) split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of Parent’s capital stock or other equity interests of the Company, except for any such transaction involving only wholly owned Parent Subsidiaries;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock or property) with respect to any shares of Parent’s capital stock or the capital stock or other equity interest of any Parent Subsidiary, other than dividends or distributions only to the extent paid by any wholly owned Parent Subsidiary to Parent or another wholly owned Parent Subsidiary;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person (other than investments in equity securities that constitute short term investments that are accounted for as cash equivalents), (C) any business or division of another Person, or (D) any assets material to the Company or its Subsidiaries in effect and the Company Subsidiaries, taken as of the date hereofa whole, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, except in each case, providing coverage equal to (1) acquisitions by Parent from any wholly owned Parent Subsidiary or greater than among any wholly owned Parent Subsidiaries; (2) the coverage under purchase of equipment, supplies and inventory in the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
ordinary course of business; (xxiv3) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” inbound licenses or other shareholder rights plan (grants or otherwise issue any Rights (as defined assignments of Intellectual Property in the Company’s current articles ordinary course of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property ibusiness
Appears in 2 contracts
Sources: Merger Agreement (Superior Drilling Products, Inc.), Merger Agreement (Drilling Tools International Corp)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after From the date hereof through the Closing, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and Seller shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable subsidiaries to conduct their business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, operations in the ordinary course of business consistent with past practice and to preserve intact its present business organization and maintain good relationships with its customers, suppliers lenders and others having material business relationships with it. Without limiting the generality of the foregoing, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Seller shall cause the Company and each of its subsidiaries not to:
(a) amend its charter, certificate or as required articles of incorporation or formation, bylaws, operating agreement or other constituent or organizational document (whether by agreementsmerger, plansconsolidation or otherwise);
(b) split, programs combine or arrangements in effect on the date hereof, (B) increase in reclassify any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee Capital Stock of the Company or any of its Subsidiariessubsidiaries (whether by merger, except (1) in the case of employees consolidation or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Lawsotherwise);
(xxc) implement declare, set aside or pay any broad-based early retirement plan dividend or announce other distribution (whether in cash, stock or property or any combination thereof) in respect of the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations Capital Stock of the Company or any of its Subsidiariessubsidiaries (whether by merger, consolidation or otherwise);
(ad) redeem, repurchase or otherwise acquire any Capital Stock of the Company or any of its subsidiaries (whether by merger, consolidation or otherwise);
(e) issue, deliver or sell any Capital Stock of the Company or any of its subsidiaries (whether by merger, consolidation or otherwise), other than new Contracts with customers the issuance of any Capital Stock of any wholly owned subsidiary of the Company to the Company or suppliers any other wholly owned subsidiary of the Company;
(f) amend any term of any Capital Stock of the Company or any of its subsidiaries (whether by merger, consolidation or otherwise);
(g) increase the compensation or benefits of any current or former director, officer, employee or consultant of the Company or any of its subsidiaries;
(h) grant or increase any severance, retention, change-of-control or similar payments to any current or former director, officer, employee or consultant of the Company or any of its subsidiaries;
(i) create, incur, assume or guarantee any indebtedness for borrowed money, other than borrowings in the ordinary course of business consistent with past practice, enter into under any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries credit facility in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)this Agreement; or
(xxvj) agree, authorize commit or commit offer to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Stock Purchase Agreement, Stock Purchase Agreement (HC2 Holdings, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants From and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or and the termination of this Agreement in accordance with its termsAgreement, except (the following exceptions (i)–(v), the “Interim Covenant Exceptions”) (i) as (A) otherwise required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required permitted by this Agreement, (Cii) Buyer as may approve be required by applicable Law, (iii) for any actions taken reasonably and in good faith as a result of COVID-19 or to respond to or comply with COVID-19 Measures, (iv) as may be consented to in writing by Parent (such approval which consent shall not to be unreasonably withheld, delayed or conditioned); provided that Parent shall be deemed to have consented in writing if it provides no response or good faith request for additional information within five (5) Business Days after receiving a written request (email sufficient) from the Company for such consent or (Dv) as otherwise set forth in Section 6.1 7.1 of the Company Disclosure LetterSchedule, the Company will shall use reasonable best efforts to, and shall cause each of its Subsidiaries to use reasonable best efforts to, conduct its business in all material respects in the ordinary course of business and, to the extent consistent therewith, shall use, and cause each of its Subsidiaries to use, commercially reasonable efforts to (i) preserve its and its Subsidiaries’ assets and business organizations intact, (ii) maintain in effect all of its material foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations and (iii) maintain satisfactory relationships with its material customers, lenders, suppliers, licensors, licensees, distributors and others having material business relationships with it; provided, however, that no action or failure to take action with respect to matters specifically addressed by the provisions of Section 7.1(b) shall constitute a breach under this sentence unless such action or failure to take action would constitute a breach of such provision of Section 7.1(b).
(b) From the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX, other than pursuant to any Interim Covenant Exception, except that Parent may withhold, delay or condition its consent to actions contemplated by Section 7.1(b)(vii) or Section 7.1(b)(viii) (in each case to the extent relating to actions of the Company only and not of the Company’s Subsidiaries) in Parent’s sole discretion, the Company shall not, and will shall cause its Subsidiaries not to:
(i) amend adopt (A) any change in the Company’s Organizational Documents (except for immaterial or otherwise changeministerial amendments) or (B) material changes to the Organizational Documents of any Subsidiary of the Company that, or authorize or propose in the case of this clause (B), would be adverse to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documentsParent;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesSubsidiaries with any other Person or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, except for any such plan solely between or among the Wholly Owned Subsidiaries of the Company;
(iii) acquire (acquire, directly or indirectly by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise, any business, Person, material properties or material assets from any other Person (other than the Company or its Wholly Owned Subsidiaries) with purchase price in excess of $25 million in any corporationindividual transaction or series of related transactions or $100 million in the aggregate, partnership in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement prior to the Outside Date, other than acquisitions of inventory or other business organization goods or any assets constituting a division or business line services in the ordinary course of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementbusiness;
(iv) transfer, sell, lease, license, divest, cancel or otherwise dispose of, any material properties or material assets (excluding any Intellectual Property Rights) of the Company or any of its Subsidiaries, including capital stock of any of its Subsidiaries or incur, permit or suffer to exist the creation of any material Encumbrance (other than a Permitted Encumbrance) upon, any such material properties, assets or any material Owned IPR, except (A) services provided in the ordinary course of business, (B) sales of obsolete assets in the ordinary course of business, (C) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $25 million individually or $100 million in the aggregate (other than pursuant to the terms of Company Material Contracts in effect prior to the date of this Agreement) and (D) sales of inventory or other goods in the ordinary course of business;
(v) except as set forth in Section 7.1(b)(xix), issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, lease, license, guarantee, Encumber (other than with Permitted Encumbrances), or authorize otherwise enter into any Contract or other agreement with respect to the issuancevoting of, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereonincluding, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (CShares) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common capital stock or other equity interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock or other equity interests or such convertible or exchangeable securities, other than (A) any such transaction or action by a wholly owned Wholly Owned Subsidiary of the Company to the Company or another wholly owned Subsidiary between or among Wholly Owned Subsidiaries of the Company, (B) the issuance of shares of such capital stock, other equity interests or convertible or exchangeable securities in respect of Company Equity Awards outstanding as of the ordinary course date of business and this Agreement in a manner that would not have any material Tax consequences)accordance with their terms and, as applicable, the Company Benefit Plans in effect on the Capitalization Date or (C) the issuance of shares of such capital stock, other equity interests or convertible or exchangeable securities in respect of Company Equity Awards granted after the date hereof without violation of this Agreement;
(vvi) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any direct of its Wholly Owned Subsidiaries or indirect wholly owned Subsidiary between or among any of its Wholly Owned Subsidiaries) in excess of $15 million individually or $30 million in the aggregate, other than (x) pursuant to existing contractual obligations as of the date of this Agreement or (y) in connection with sale or rental financing arrangements in connection with the sale of Company Products in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practicebusiness;
(vivii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for cash (A) dividends paid by any direct or indirect wholly owned Wholly Owned Subsidiary to the Company or to any other direct Wholly Owned Subsidiary of the Company, (B) regular quarterly dividends, in an amount not to exceed $0.24 per share in each case, declared and paid at such times as are consistent with the Company’s historical practice over the twelve (12)-month period prior to the date of this Agreement and (C) pro rata dividends or indirect wholly owned distributions by a Subsidiary other than a Wholly Owned Subsidiary of the Company in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsbusiness;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stockstock or other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), other than (A) to satisfy applicable Tax withholding and/or exercise prices upon vesting, settlement or exercise of any Company Securities Equity Award outstanding on the date hereof or granted after the date hereof without violation of this Agreement, or (B) any such transactions solely involving Wholly Owned Subsidiaries of the Company;
(ix) (A) incur any Indebtedness for borrowed money (including the issuance of any debt securities), or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, except for guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 7.1(b), except for incurrences of Indebtedness and guarantees under the Company Revolving and Term Loan Credit Agreement not in excess of $2.2 billion in the aggregate, the Receivables Agreement not in excess of $110 million in the aggregate and the Master Framework Agreement not in excess of $90 million in the aggregate, (B) prepay, redeem, repurchase, defease, satisfy, discharge, cancel or otherwise terminate any Indebtedness for borrowed money of the Company or any Other Company Subsidiary Securities (other than payments of Indebtedness under the acquisition Company Credit Agreements, except, in each case of clauses (A) and (B) for any Ordinary Shares tendered such transactions solely between or among the Company and/or its Wholly Owned Subsidiaries, or (C) amend, supplement or otherwise modify the Company Credit Agreements or the Company Indentures in any manner that would increase the amount of indebtedness available thereunder, increase the cost to Parent to prepay, terminate, redeem, satisfy or discharge the indebtedness thereunder at Closing or otherwise impede the ability of the Parent to effectuate any prepayment, payment, termination, redemption, satisfaction or discharge thereunder at Closing;
(x) make or authorize any payment of, or commitment for, capital expenditures, other than (A) as contemplated by current the Company’s capital budget set forth in Section 7.1(b)(x) of the Company Disclosure Schedule, (B) to the extent reasonably necessary to protect human health and safety and (C) any unbudgeted capital expenditures not to exceed $5 million individually or former employees $10 million in the aggregate per annum without taking into account any amounts permitted by the foregoing clause (B);
(xi) enter into any Contract that would have been a Company Material Contract had it been entered into prior to this Agreement, other than in the ordinary course of business;
(xii) other than with respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 7.1(b)(vi), Section 7.1(b)(ix) and Section 7.14, terminate, materially amend, materially modify, or directors waive any material rights under, any Company Material Contract, other than in order to pay Taxes the ordinary course of business;
(xiii) cancel, modify or waive any debts or claims held by the Company or any of its Subsidiaries having in each case a value in excess of $1 million individually or $5 million in the aggregate, other than debts or claims held against customers in connection with the vesting sale or rental of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company Products in the ordinary course of business and or solely between or among the Company and/or its Wholly Owned Subsidiaries;
(xiv) for the avoidance of doubt, except as expressly provided for by Section 7.12, fail to use commercially reasonable efforts to maintain in a manner that would not have effect any material Tax consequences)Insurance Policy, unless simultaneous with any termination, cancellation or issue or sell any debt securities or warrants or other rights to acquire any debt security lapse of such material Insurance Policy, replacement self-insurance programs are established by the Company or any one or more of its SubsidiariesSubsidiaries or replacement policies underwritten by reputable insurance carriers are in full force and effect, except for (A) Indebtedness for borrowed money in each case, providing coverage substantially similar to the coverage under the revolving facility under the Company Credit Agreementterminated, (B) loans cancelled or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 millionlapsed material Insurance Policies;
(ixxv) other than with respect to Transaction Litigation or any Tax claim, audit, assessment or dispute, which shall not authorize be governed exclusively by Section 7.19 and Section 7.1(b)(xvii), respectively, settle or make compromise any capital expenditures Proceeding for an amount in excess of $40 5 million individually or $25 million in the aggregateaggregate during any calendar year, except for or which would reasonably be expected to (A) expenditures set forth in prevent, materially delay or materially impair the current capital forecast set forth in Section 6.1(a)(ix) consummation of the Company Disclosure Letter transactions contemplated by this Agreement or (B) expenditures made involve any criminal liability or result in response any non-monetary obligation that is material to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwisethe Company and its Subsidiaries (taken as a whole);
(xxvi) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law SEC rule or by a Governmental Entitypolicy;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate make (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business business), change or to the extent required by Law, make revoke any material Tax election, (B) change any annual Tax accounting period, (C) change any material Tax accounting method, (D) file any material amended income Tax ReturnReturn that is material, settle or compromise any material amount of Tax Liability, (E) enter into any closing agreement with respect to Taxes, (F) settle any material Tax claim, audit, assessment or dispute for an amount of Tax that materially exceeds the amount reserved with respect thereto, or (G) surrender any right to claim a refund for of a material amount of TaxTaxes;
(xiiixviii) (A) sell, assign, transfer, selldivest or otherwise dispose of, lease, or grant any exclusive license, mortgageto any material Owned IPR, pledge except in the ordinary course of business, or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, B) cancel, abandon or otherwise allow to lapse or expire any material Registered Owned IPR (or otherwise dispose of any assets, product lines or businesses rights of the Company or its SubsidiariesSubsidiaries therein or thereto), with a value in excess other than at the end of $50 million its term or otherwise in the aggregateCompany’s reasonable business judgment;
(xix) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or established after the date of this Agreement not in contravention of this clause (xix), (A) materially increase the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, except for (A1) sales and non-exclusive licenses increases in compensation in the ordinary course of products and services business, subject to the limitations set forth in Section 7.1(b)(xix) of the Company Disclosure Schedule and its Subsidiaries (2) the payment of cash incentive compensation for completed periods based on actual performance in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of become a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) party to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, commence participation in or terminate any material Company Benefit Plan, (C) grant any new awards, or amend or modify in any material respect the operations terms of any outstanding awards, under any Company Benefit Plan, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment of, compensation or benefits under any Company Benefit Plan, (E) hire any employee to a position at the level of Vice President or above (other than to replace a departed employee who was not on the Company’s executive leadership team) or (F) terminate the employment of any employee who is a member of the Company or any of its SubsidiariesCompany’s executive leadership team other than for cause;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (bxx) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contractbusiness, become a party to, establish, adopt, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien commence participation in or otherwise transfer, in whole or in part, rights or interest pursuant to or in terminate any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” collective bargaining agreement or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) agreement with a labor union, labor organization, works council or similar interests or rights)organization; or
(xxvxxi) agree, authorize or commit to do any of the foregoing.
(bc) Neither Buyer nor Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time or give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company and its Subsidiaries shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere exercise, consistent with the consummation terms and conditions of the transactions contemplated by this Agreement, complete control and supervision over their respective operations.
(cd) The Notwithstanding anything to the contrary in this Agreement, each of Parent and the Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has shall cause its respective controlled Affiliates not been within the five to directly or indirectly (5) year period described in Section 897(c)(1) of the Codewhether by merger, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s nameconsolidation, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Dateor otherwise), certifying that each such Subsidiary does not own any U.S. real property iacquire, purchase, lease, or license or otherwise enter into a transaction with (or agree to acquire, purchase, lease, or license or otherwise enter
Appears in 2 contracts
Sources: Merger Agreement (Hill-Rom Holdings, Inc.), Merger Agreement (Baxter International Inc)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after From the date hereof and until the earlier of the Effective Time or the termination of this Agreement to the Effective Time, unless Purchaser has consented in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)writing thereto, the Company shall, and shall cause each of its Subsidiaries to, (i) conduct their business in the its operations according to its usual, regular and ordinary course of business consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause practice; (ii) use its Subsidiaries, to use their respective reasonable best efforts to preserve intact their material business organizations intact organizations, maintain in effect all existing qualifications, licenses, permits, approvals and other authorizations referred to in Sections 6.1 and 6.14, keep available the services of their officers and employees and maintain in all material respects existing relations and goodwill satisfactory relationships with Governmental Entities, customers, suppliers, employees and those persons having business associates. Without limiting relationships with them; (iii) promptly upon the generality discovery thereof notify Purchaser of the foregoing existence of any breach of any representation or warranty contained herein (or, in the case of any representation or warranty that makes no reference to Material Adverse Effect, any breach of such representation or warranty in any material respect) or the occurrence of any event that would cause any representation or warranty contained herein no longer to be true and correct (or, in furtherance thereofthe case of any representation or warranty that makes no reference to Material Adverse Effect, from to no longer be true and correct in any material respect); and (iv) promptly deliver to Purchaser true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement, any internal monthly reports prepared for or delivered to the Board of Directors after the 26 31 date hereof and monthly financial statements for the Company and its Subsidiaries for and as of each month end subsequent to the date of this Agreement.
(b) From and after the date of this Agreement until the earlier of to the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve unless Purchaser has consented in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letterthereto, the Company will shall not, and shall not and will cause permit any of its Subsidiaries not to:
, (i) amend its Certificate of Incorporation or otherwise change, Bylaws or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable comparable governing documents;
instruments; (ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the register for issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of sale any shares of its capital stock or other ownership interest in the Company (other than issuances of Common Stock in respect of any exercise of Options outstanding on the date hereof and disclosed in the Disclosure Letter) or any of the Subsidiaries, or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest, or convertible or exchangeable securities; or accelerate any right to convert or exchange or acquire any securities of the Company (including Ordinary Shares) or any of its Subsidiaries for any such shares or ownership interest; (iii) effect any Company Securities stock split or Other Subsidiary Securities (other than (A) the issuance conversion of Ordinary Shares upon the vesting any of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to its capital stock or otherwise change its capitalization as it exists on the date hereof, other than as set forth in this Agreement or contemplated by a Stockholder Agreement; (Biv) grant, confer or award any option, warrant, convertible security or other right to acquire any shares of its capital stock or take any action, other than as set forth in this Agreement, to cause to be exercisable any otherwise unexercisable option under any existing stock option plan; (v) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests (other than such payments by a wholly-owned Subsidiary); (vi) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries; (vii) sell, lease or otherwise dispose of any of its assets (including capital stock of Subsidiaries), except in the issuance ordinary course of Ordinary Shares pursuant business, none of which dispositions individually or in the aggregate will be material; (viii) settle or compromise any pending or threatened Litigation, other than settlements which involve solely the payment of money (without admission of liability) not to exceed $250,000 in any one case; (ix) acquire by merger, purchase or any other manner, any business or entity or otherwise acquire any assets that are material, individually or in the aggregate, to the Company ESPPand its Subsidiaries taken as a whole, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as except for purchases of the date hereof (for the avoidance of doubtinventory, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants supplies or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary capital equipment in the ordinary course of business and consistent with past practice; (x) incur or assume any long-term or short-term debt, except for working capital purposes in a manner that would not have the ordinary course of business under the Company's existing credit agreement set forth in the Disclosure Letter; (xi) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any material Tax consequences);
other person except wholly owned Subsidiaries of the Company; (vxii) make or forgive any loans, advances or capital contributions to to, or investments in in, any Person other person; (other than xiii) make any Tax election or settle any Tax liability; (xiv) waive or amend any term or condition of any confidentiality or "standstill" agreement to any direct or indirect wholly owned Subsidiary of which the Company in the ordinary course of business and in is a manner that would not have party; (xv) grant any material Tax consequencesstock related or performance awards; (xvi) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement new employment, severance, consulting or salary continuation agreements with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former newly hired employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, foregoing with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iany
Appears in 2 contracts
Sources: Merger Agreement (Sinter Metals Inc), Merger Agreement (GKN Powder Metallurgy Inc)
Interim Operations. (a) Except Each of the Partnership and Parent covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (x) unless Parent or the Partnership, as applicable, shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement, as provided in any Contract in effect as of the date of this Agreement, or as required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 the business of the Company Disclosure Letter, the Company covenants it and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business shall be conducted in the ordinary course consistent with past practice and in compliance with all applicable Laws Ordinary Course and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing, from the date of this Agreement until the earlier of Effective Time, except as otherwise expressly: (i) contemplated by this Agreement; (ii) contemplated by any Contract entered into prior to, concurrently with or after the Effective Time or the termination date of this Agreement in accordance by Parent with its termsrespect to the Other Parent Transactions (as such Contract may be amended, except as supplemented or otherwise modified from time to time); (Aiii) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by terms of any Contract in effect on the date of this Agreement, (Civ) Buyer may approve as approved in writing (such which approval shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed) by the other Party; or (Dv) as set forth in the corresponding subsection of Section 6.1 8.1 of the Company Partnership Disclosure Letter, as it relates to the Company will Partnership and its Subsidiaries, or on Section 8.1 of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries, each Party, on its own account, shall not and will cause shall not permit its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose make any material change to amend or otherwise change the nature of its articles of association, certificate of incorporation, bylaws or other applicable governing documentsbusiness and operations;
(ii) mergemake any change to its Organizational Documents as in effect on the date of this Agreement in any manner that would reasonably be expected to prohibit, enter into prevent or materially impede, hinder or delay the ability of such Party to satisfy any scheme of arrangement or bid conduct agreement or other similar arrangementthe conditions to, or consolidate with any the consummation of, the Merger or the other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesTransactions;
(iii) acquire (by mergerA) merge or consolidate itself or any of its Subsidiaries with any other Person (expressly excluding, scheme for the avoidance of arrangementdoubt, consolidationany of the Other Parent Transactions), acquisition or (B) adopt a plan or agreement of stock complete or assets or otherwise) any corporationpartial liquidation, partnership dissolution, restructuring, recapitalization or other business organization reorganization, in each case, except (1) such transactions solely between or among, or solely involving, such Party and one or more of its wholly owned Subsidiaries, or a Subsidiary of such Party and one or more wholly owned Subsidiaries of such Subsidiary, (2) as would not reasonably be expected to result in a Partnership Material Adverse Effect or Parent Material Adverse Effect, as applicable, or (3) as would not reasonably be expected to prohibit, prevent or materially impede, hinder or delay the ability of such Party to satisfy any assets constituting a division of the conditions to, or business line of any Person the consummation of, the Merger or any equity interests of any Person or enter into any joint venture or similar arrangementthe other Transactions;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, transfer or authorize the issuance, salesale or grant, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or otherwise enter into any agreement Contract with respect to the voting of, any of its partnership interests, limited liability company interests, shares of capital stock or other equity interests, as applicable (other than the issuance of partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries, (B) by the Partnership to the GP Delegate pursuant to the Partnership Agreement or (C) in respect of equity-based awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or securities convertible or exchangeable into or exercisable for any such partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or any options, warrants or other rights of any kind to acquire any partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or such convertible or exchangeable securities;
(viiv) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its partnership interests, limited liability company interests, shares of capital stockstock or equity interests, Company Securities as applicable, or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable;
(vi) waive, release, assign, settle or compromise any claim, action or proceeding, including any state or federal regulatory proceeding seeking damages or injunction or other equitable relief, which waiver, release, assignment, settlement or compromise would reasonably be expected to result in a Partnership Material Adverse Effect or Parent Material Adverse Effect, as applicable;
(vii) other than in the acquisition Ordinary Course, make, change or revoke any material Tax election, adopt or change any material Tax accounting method, file any material amended Tax Return, settle any material Tax claim, audit, assessment or dispute for an amount materially in excess of the amount reserved or accrued on such Party’s most recent consolidated balance sheet included in the Parent Reports or Partnership Reports, as applicable, or surrender any Ordinary Shares tendered by current or former employees or directors in order right to pay Taxes in connection with the vesting claim a refund of Company RSUs)a material amount of Taxes;
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedurespolicies, except as required by changes in GAAP or Law or by a Governmental EntityGAAP;
(xiix) except with respect to make or declare any litigation, audit, claim, action dividends or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior distributions to the date hereof andholders of Common Units or Parent Common Stock, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, conveyOrdinary Course, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)8.12; or
(xxvx) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly Notwithstanding anything to the contrary in this Agreement, a Party’s obligations under Section 8.1(a) to take an action or permit any of their not to take an action, or to cause its Subsidiaries to take an action or not to take an action, shall, with respect to any action Persons (and their respective Subsidiaries) controlled by such Party, or in which such Party otherwise has a voting interest, but that is reasonably likely to prevent are not wholly owned Subsidiaries of such Party or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing have public equity holders, only apply (i) executed affidavits dated as to the extent permitted by the organizational documents and governance arrangements of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2)such entity and its subsidiaries, certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each extent a Party is authorized and empowered to bind such Subsidiary does not own entity and its subsidiaries and (iii) to the extent permitted by the Party’s or its Subsidiaries’ duties (fiduciary or otherwise) to such entity and its subsidiaries or any U.S. real property iof its equity holders.
Appears in 2 contracts
Sources: Merger Agreement (Enbridge Inc), Merger Agreement (Enbridge Energy Partners Lp)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement Between the Execution Date and the Closing Date or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms Article IX (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditionedthe “Interim Period”), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality except (y) as set forth on Section 7.01 of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time Disclosure Schedule or the termination of this Agreement in accordance with its terms, except (z) as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly contemplated or required by this Agreement, (C) Buyer may approve unless Purchaser has previously expressly consented in writing (such approval not or to be unreasonably withheldthe extent required by Applicable Law, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Lettereach Seller will, the Company will not and will cause its Subsidiaries not the Company and GSC to:
, (i) amend or otherwise change, or authorize or propose to amend or otherwise change conduct its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary operations in the ordinary course of business and in a manner that would accordance with Applicable Law, (ii) use commercially reasonably efforts to preserve and maintain the current business, assets, properties, organization and goodwill of the Company and GSC, (iii) maintain books, accounts and records of the Company and GSC in accordance with past practice, and (iv) use commercially reasonable efforts to preserve and maintain the present relationships with customers, suppliers, Governmental Entities, lenders and others having business dealings with the Company and/or GSC.
(b) Without limiting the foregoing, during the Interim Period, except (y) as set forth on Section 7.01 of the Disclosure Schedule or (z) as otherwise expressly contemplated or required by this Agreement, unless Purchaser has previously expressly consented in writing or to the extent required by Applicable Law, Sellers shall not, and shall cause the Company and GSC not have to, do any of the following:
(i) make any amendment, modification, change to the Organizational Documents of the Company or GSC (or waive compliance with any material Tax consequencesprovision thereof);
(ii) (A) authorize, issue, pledge, suffer any new security interests on, assign, transfer, or sell any Equity Securities of the Company or GSC or other rights to purchase or otherwise acquire for any such Equity Securities of the Company or GSC or (B) split, combine, redeem, recapitalize, reclassify or subdivide any Equity Securities of the Company or GSC or make any commitments to do any of the foregoing with respect to any Equity Securities;
(iii) sell, assign, transfer, license (other than granting non-exclusive licenses to customers (including retailers and distributors) in the ordinary course of business), sublicense, abandon, allow to lapse or expire, or otherwise dispose of, or fail to enforce, maintain, or protect any material Company Intellectual Property or amended or modified in any material respect any existing Contract or rights with respect to any material Company Intellectual Property;
(iv) (A) merge or consolidate with any other Person, (B) acquire any Equity Securities, business, line of business, other business organization or division thereof, or all or substantially all of the assets, of another Person, in a single transaction or a series of related transactions; (C) make any investment in any other Person or business; (D) enter into any joint venture, partnership or similar venture with any Person (E) restructure, reorganize or adopt a plan or agreement of liquidation, dissolution, merger, consolidation or other reorganization, or (F) dispose of, lease, transfer, surrender, abandon, waive, lapse, or release any asset, right, claim, debt or property, tangible or intangible of the Company or GSC which is material to the business as a whole;
(v) make amend or forgive any loans, advances or capital contributions to or investments modify in any Person material respect (other than to any direct or indirect wholly owned Subsidiary of the Company excluding payment terms that are modified in the ordinary course of business and in a manner that would not have business), cancel, terminate or initiate the termination of, or waive or assign any material Tax consequencesright, claim or benefit under, any Material Contract (excluding any related purchase order in the ordinary course of business) other than extending trade credit or enter into a Contract which, had it been entered into prior to customers and advancing business expenses to employeesthe Execution Date, would have been a Material Contract;
(A) accelerate the collection of or discount of accounts receivable, (B) delay the payment of accounts payable or accrued expenses, (C) delay the purchase of supplies or delay capital expenditures, repairs or maintenance, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)is inconsistent with the Company’s and GSC’s past practice, or issue or sell (D) take any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related fail to Tax Returns take any action that has or any Tax Liability (whichhad, for or would reasonably be expected to have, the avoidance effect of doubt, shall be governed by Section 6.1(a)(xii)) and subject accelerating to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed period prior to the date hereof andClosing, in each case, such settlement sales to customers or compromise does not include any criminal liability, material injunctive relief or obligation others that would reasonably be expected to be performed by occur after the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries Closing in the ordinary course of business;
(xivvii) (A) grantgrant or announce any new award of, increase the amount of, or provide accelerate of the timing of funding, payment or vesting of, any cash, equity or equity-based incentive, severance, change in control, retention, change transaction or other bonus, salary, or other compensation or benefit of controlany current or former employee, severance or termination payments or benefits to any officer, director, consultant or employee other individual service provider of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or GSC other than as required by agreementsApplicable Law, plans, programs or arrangements any existing agreement in effect as of the Execution Date and set forth on Section 5.15(a) of the date hereof, (B) increase in any manner the compensation, bonus or benefits ofDisclosure Schedule, or make, grant or amend the existing terms of any Company Benefit Plan in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee effect as of the Company or any of its Subsidiaries, except (1Execution Date and set forth on Section 5.15(a) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and Disclosure Schedule;
(2viii) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except other than as required by Law or as required by agreementsApplicable Law, plans, programs or arrangements in effect on the date hereofenter into, establish, adopt, terminate, amend or modify any Company Benefit Plan or any other benefit or compensation plan, policy, program, contract, agreement or arrangement that would be a Company Benefit Plan if in effect as of the Execution Date;
(ix) (A) hire, promote or engage, or otherwise enter into any employment or consulting agreement or arrangement with any individual, or (B) terminate, other than for cause, the employment or service of any current or former employee, officer, director or other service provider;
(A) modify, extend, negotiate, terminate or amend enter into any Benefit Plan collective bargaining agreement or other Contract with any labor organization, union, works council, employee representative body or similar organization or (B) recognize or certify any labor union, labor organization, works council or group of employees as the bargaining representative for any employees of the Company;
(xi) implement or announce any employee layoffs, furloughs, reductions in force, plant closings, reductions in compensation or other than routine changes to welfare plans similar actions that would trigger notice obligations under the WARN Act;
(xii) waive or release any noncompetition, non-solicitation, nondisclosure or other restrictive covenant obligation of any current or former employee or independent contractor of the Pension Plan made in Company;
(xiii) (A) make (outside the ordinary course of business consistent business), change or rescind any election relating to Taxes; (B) adopt, change or revoke any material method of Tax accounting, except as required by GAAP; (C) settle or compromise any U.S. federal, state or local or non-U.S. Tax liability, claim, dispute or assessment; (D) amend any Tax Return; (E) enter into any closing agreement or similar agreement with past practiceany Taxing Authority; (F) waive or accelerate the vesting consent to an extension of a statute of limitations period applicable to any Tax claim, assessment or payment deficiency; (G) fail to pay any Tax when due and payable or otherwise incur any penalties or interest in respect of any compensation Tax; or equity for (H) surrender any right to claim a material Tax refund or surrender any other Tax asset;
(xiv) except to the benefit of any Person or funding of any Benefit Plan (except (x) as required extent necessary in connection with the termination filing of the Arris GroupPreliminary Proxy Statement or the Definitive Proxy Statement, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant make any material change to the terms thereof as in effect on accounting methods, principles or practices of the date hereof), (D) change any actuarial Company or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedGSC, except as may be required by this Agreement, GAAP or (E) except as required by changes in Applicable Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license (A) other than draws on the Company’s current line of credit, issue, create, incur, assume, guarantee, endorse, refinance or otherwise become liable or responsible with respect to (whether directly, contingently or otherwise) any indebtedness for borrowed money, (B) cancel, compromise or modify, in any material respects, the terms of any material Intellectual Property owned indebtedness or (C) make any investments in or loans to or enter into or modify any Contract with any Related Party;
(xvi) subject to any Lien or otherwise encumber or permit, allow or suffer to be encumbered, (A) any of the material properties or material assets owned, used or occupied by the Company, other than a Permitted Lien or (B) the Equity Securities of the Company or any of its Subsidiaries GSC, other than restrictions imposed on transfer under applicable federal and/or state securities laws or regulations;
(xvii) settle or compromise any pending or threatened Proceeding against the Company or GSC (or for which the Company or GSC would be financially responsible), whether or not commenced prior to the Execution Date, other than settlements of any pending or threatened Proceeding in the ordinary course of business consistent with past practice;
providing solely for payment of amounts less than $200,000 in cash individually, or $250,000 in the aggregate (xvi) allow any lapse or abandonment net of any material Intellectual Propertyamounts covered by insurance); provided, that no settlement of any pending or threatened Proceeding may involve any injunctive or equitable relief, or any registration or grant thereof, or any application related thereto to which, or under which, impose material restrictions on the Company or any Subsidiary has any ownership interestGSC, excluding any such lapse or abandonment made by the Company admit wrongdoing, or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction be with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in respect to a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreementcriminal matter;
(xviii) enter into any Contract that would require payment to commitment for capital expenditures of the Company or give rise to any rights (other than notice) to such other party or parties GSC in connection with excess of $50,000 in the transactions contemplated by this Agreementaggregate;
(xix) institute enter into any general layoff of employees, implement any early retirement plan agreement or announce the planning of such a program arrangement that would constitute purport to bind or impose a “mass layoff” restrictive covenant on (other than customary confidentiality obligations), or “plant closing” otherwise materially limit the operations of, Purchaser or any of its Affiliates following the consummation of the Closing (as defined under including the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local LawsCompany and/or GSC);
(xx) implement except to a Person that is subject to confidentiality, non-disclosure and non-use obligations in favor of the Company, divulge, furnish to or make accessible, or subject to any broad-based early retirement plan obligation to divulge, furnish or announce make accessible, any Trade Secrets of the planning of such a programCompany to any Person;
(xxi) enter into cause or allow any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limitPermit to be cancelled, in any material respectrevoked, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)suspended; or
(xxvxxii) agree, authorize or commit agree to do take any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing actions described in clauses (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five through (5xxi) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iabove.
Appears in 2 contracts
Sources: Securities Purchase Agreement (Laird Superfood, Inc.), Securities Purchase Agreement (Laird Superfood, Inc.)
Interim Operations. (a) Except as (x) required by applicable LawThe Company shall, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants from and agrees that, after the date hereof of this Agreement and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, with such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company shall, and shall cause its Subsidiaries toexcept as otherwise expressly required by this Agreement or as required by applicable Law, conduct their its business in the ordinary course consistent with past practice and in compliance with all applicable Laws Ordinary Course of Business and, to the extent consistent therewith, it shall, and shall cause use its Subsidiaries, to use their respective reasonable best efforts to to, preserve their material its business organizations organization intact and maintain in all material respects existing satisfactory relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associatesassociates and keep available the services of its present employees and agents. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing sentence, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve required by applicable Law, required by the express terms of any Company Material Contract made available to Parent prior to the date of this Agreement, or approved in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letterby Parent, the Company will not and will cause its Subsidiaries not toshall not:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws or other applicable governing documentsOrganizational Documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company with any other Person or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any of agreements or arrangements imposing material changes or restrictions on its Subsidiariesassets, operations or business;
(iii) acquire (by mergerassets from any other Person, scheme other than acquisitions of arrangementraw materials, consolidationinventory, acquisition equipment, tooling, and supplies in the Ordinary Course of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementBusiness;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or authorize otherwise enter into any Contract or understanding with respect to the issuancevoting of, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) Company, securities convertible or exchangeable into or exercisable for any such shares of capital stock, or any options, warrants or other rights of its Subsidiaries any kind to acquire any such shares of capital stock or any Company Securities such convertible or Other Subsidiary Securities exchangeable securities (other than (A) the issuance of Ordinary Shares upon the vesting in respect of Company RSUs (and dividend equivalents thereon, if applicable) Options outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubtthis Agreement in accordance with their terms and, as applicable, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each Equity Plan as in effect as of on the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequencesthis Agreement);
(v) enter into any Contracts or other arrangements between the Company, on the one hand, and any director or officer of the Company or any Person beneficially owning one percent or more of the outstanding Shares, on the other hand, except for compensatory arrangements entered into in the Ordinary Course of Business with Company Employees consistent with Section 7.1(a)(xxiii) and transactions with Parent or its Affiliates;
(vi) create or incur any Encumbrance that is not incurred in the Ordinary Course of Business on any of the assets of the Company;
(vii) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practicePerson;
(viviii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsCommon Stock;
(viiix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities Common Stock or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities (other than the acquisition shares of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs)its Common Stock;
(viiix) incur any Indebtedness or guarantee such Indebtedness (including the issuance of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entitysecurity);
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Company Material Contract had it been entered into prior to this Agreement or Agreement;
(bxii) other than in the ordinary course of business consistent with past practice respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(x), terminate or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, supplement or waive, terminate, or assign, convey, subject to a Lien Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Company Material Contract, except for (x) expirations of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company or other party to such Contract, except for any ministerial actions, (y) non-exclusive licenses under Intellectual Property Rights owned or purported to be owned by the Company granted in the Ordinary Course of Business or (z) terminations, amendments, modifications, assignments, conveyances, transfers or expirations where, concurrent therewith, the Company enters into a replacement Contract providing substantially similar property, products or services on substantially similar terms;
(xxiiixiii) other than renewals in cancel, modify or waive any debts or claims held by the ordinary course of businessCompany or waive any material rights;
(xiv) except as expressly provided for by Section 7.13, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereofan Insurance Policy, unless simultaneous with such termination, cancellation or lapselapse of any such Insurance Policy, a replacement policies self-insurance program is established by the Company or a replacement policy underwritten by an insurance and reinsurance companies company of nationally recognized standing or self-insurance programsis in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies Insurance Policy for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(xv) other than with respect to Transaction Litigation, which shall be governed by Section 7.16, and settlement of trade accounts payable in the Ordinary Course of Business, settle or compromise any Proceeding for an amount in excess of $100,000 individually or $250,000 in the aggregate during any calendar year;
(xvi) make any changes with respect to the legal structure of the Company or to the Company’s accounting policies or procedures, except as required by changes in GAAP or Law;
(xvii) enter into any line of business in any geographic area other than the existing lines of business of the Company and lines of products and services reasonably ancillary to any existing line of business;
(xviii) make any material changes to the existing lines of business of the Company or adopt or make any material modifications to the Company’s strategic plan;
(xix) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute, surrender any right to claim a refund or take any action which would be reasonably expected to result in an increase in the Tax liability of the Company, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(xx) transfer, sell, lease, divest, cancel, allow to lapse or expire, or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any assets (tangible or intangible, including any Company Intellectual Property Rights), Licenses, product lines or business of the Company, except in connection with services provided in the Ordinary Course of Business or sales of obsolete assets;
(xxi) cancel, abandon or otherwise allow to lapse or expire any Company Intellectual Property Rights, except in the Ordinary Course of Business with respect to Company Intellectual Property Rights that are not material to any business of the Company;
(xxii) adopt or implement any shareholder rights plan or similar arrangement;
(xxiii) except as required pursuant to the terms of any Company Benefit Plan in full force effect as of the date of this Agreement or as required by Law, (A) increase in any manner the compensation or fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, except reasonable holiday bonuses payable to all employees, reasonable compensation adjustments for customer service employees, and effectreasonable compensation adjustments required for exceptional performance or specific needs not to exceed $100,000 in the aggregate unless approved in advance by the Board, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company Benefit Plan, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (E) forgive any loans or make any extensions of credit in the form of a personal loan to any Company Employee (other than routine travel advances issued in the Ordinary Course of Business), (F) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees and target cash bonus opportunity in excess of $100,000 or (G) terminate the employment of any executive officer other than for cause;
(xxiv) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization;
(xxv) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xxvi) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company operates or is otherwise subject to jurisdiction;
(xxvii) take any action or fail to take any action that is reasonably expected to result in any of the conditions to the Merger set forth in Article VIII not exercise any rights under Section 5 or Section 6 being satisfied;
(xxviii) create a Subsidiary of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxvxxix) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company Nothing set forth in this Agreement shall knowingly take give Parent, directly or permit any of their Subsidiaries indirectly, the right to take any action that is reasonably likely to prevent control or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth direct the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended operations prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iEffective Time
Appears in 2 contracts
Sources: Merger Agreement (AeroGrow International, Inc.), Merger Agreement (SMG Growing Media, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by From the date of this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the and termination of this Agreement in accordance with its terms (terms, the Company covenants and agrees as to itself and its Subsidiaries that it will use its commercially reasonable efforts, from the date of this Agreement until the Effective Time, unless Buyer Parent shall otherwise approve in writing, such approval not to cause the business of it and its Subsidiaries to be unreasonably withheldconducted, delayed or conditioned)in all material respects, the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shalland its Subsidiaries shall use their respective commercially reasonable efforts to (a) preserve their business organizations, assets and shall cause lines of business intact, (b) maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations that are material to the Company and its Subsidiaries, taken as a whole, (c) maintain all leases and all personal property (reasonable wear and tear excepted) that are material to use their respective reasonable best efforts the Company and its Subsidiaries, taken as a whole, used by the Company and its Subsidiaries and necessary to preserve their material conduct its business organizations intact in the ordinary course of business consistent with past practice (but with no obligation to renew or extend any lease or to otherwise exercise any rights or options it may have under any lease, including but not limited to rights to purchase or increase or decrease its current properties) and (d) maintain in all material respects its and their existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associatesagents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or and the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (CB) Buyer as Parent may approve in writing writing, (such approval not to be unreasonably withheldC) as required by applicable Laws or definitive interpretations thereof or by any Governmental Entity, delayed or conditioned) or (D) as set forth in Section 6.1 4.1(a) of the Company Disclosure Letter, the Company will not not, and will cause not permit its Subsidiaries not Subsidiaries, to:
(i) amend adopt any amendments to its charter or otherwise changebylaws or, or authorize or propose to amend or otherwise change its articles in the case of associationany Subsidiary that is not a corporation, certificate of incorporation, bylaws or other similar applicable governing organizational documents;
(ii) merge(A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or other reorganization (other than this Agreement), (B) acquire by merging or consolidating with, or by purchasing an equity interest in or portion of the assets of (other than as set forth in Section 4.1(a)(iii)), or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, (C) take or omit to take any action that would cause any rights under Material Intellectual Property, including with respect to any registrations or applications for registration, to lapse, be abandoned or canceled, or fall into the public domain, other than actions or omissions in the ordinary course of business consistent with past practice and not otherwise in violation of this Section 4.1, or (D) enter into any scheme of arrangement a joint venture or bid conduct agreement partnership or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiariesthird-party business enterprise;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwisecapital stock from any other Person, other than (A) in the ordinary course of business consistent with past practice or (B) acquisitions of assets at or below fair market value with a purchase price not in excess of $500,000 individually or $7,500,000 in the aggregate, in each case for any corporation, partnership transaction or other business organization or any assets constituting a division or business line series of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementrelated transactions;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting exercise of Company Options or SARs and the settlement of Restricted Stock Awards, RSUs and PSPUs (and dividend equivalents thereon, if applicable) outstanding prior to on the date hereof, of this Agreement or (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as shares of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common capital stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company or (C) the issuance, sale, pledge, disposition of, grant, transfer, encumbrance, or authorization of the issuance, sale, pledge, disposition, grant, transfer or encumbrance of capital stock of any Subsidiary of the Company in connection with financing arrangements not restricted under this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(v) other than ordinary course trade credit made in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) business, make or forgive any loans, advances or capital contributions to or investments in any Person (other than to the Company or any direct or indirect wholly owned Subsidiary of the Company Company) in excess of $1,000,000 in the ordinary course of business and in a manner that would not have aggregate at any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practicetime;
(vi) (A) declare, set aside, make aside or pay any dividend or other distribution, whether payable in cash, stock, property stock or otherwiseother property, with respect to any of its shares or other equity interests (capital stock, except for cash dividends paid by any wholly owned direct or indirect wholly owned Subsidiary of the Company to the Company or to any other wholly owned direct or indirect wholly owned Subsidiary in of the ordinary course of business consistent with past practiceCompany; provided, that the Company may, at its election, pay the $0.15 per Share cash dividend declared by the Company on June 17, 2015, (B) split, combine or enter into reclassify the Shares or any agreement with respect to the voting of its other outstanding capital stock of the Company or issue or authorize the issuance of any other equity interests;
securities in respect of, in lieu of or in substitution therefor, (viiC) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of its capital stockthe Company, except for acquisitions, or deemed acquisitions, of Shares or other equity securities of the Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with (1) the vesting satisfaction of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except Tax withholding obligations with respect to obligations Company Options, SARs, Restricted Stock Awards, RSUs, or PSPUs outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Options or SARs outstanding on the date of this Agreement with Shares (including in connection with “net exercises”) and (3) forfeitures of Company Options, SARs, Restricted Stock Awards, RSUs or PSPUs outstanding on the date of this Agreement, in the case of each of (1), (2) and (3), pursuant to their terms as in effect on the date of this Agreement, and except for acquisitions or deemed acquisitions of Shares or other equity securities of the Company or any of its wholly owned Subsidiaries by the Company or any of its wholly owned Subsidiaries, or (D) enter into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of the Company’s capital stock or other Rights of the Company or any of its Subsidiaries; provided that nothing contained herein shall prohibit dividends and distributions paid or made on a pro rata basis by direct or indirect Subsidiaries of the Company in the ordinary course consistent with past practice;
(vii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify the terms of business and in a manner that would not have any material Tax consequences)Indebtedness, or issue or sell including any debt securities or warrants or other rights to acquire any debt security Indebtedness under the existing revolving credit facilities of the Company or Company, in excess, in the aggregate, of $3,000,000 of letters of credit and $1,000,000 of all other Indebtedness. “Indebtedness” of any of its Subsidiaries, except for Person means (A) Indebtedness all indebtedness for borrowed money under the revolving facility under the Company Credit Agreementmoney, (B) loans any other indebtedness which is evidenced by a note, bond, indenture, debenture or advances to wholly owned Subsidiaries and similar Contract, (C) other Indebtedness in an amount not all capitalized lease obligations of such Person or obligations of such Person to exceed an aggregate principal amount pay the deferred and unpaid purchase price of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregateproperty and equipment, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries trade payables incurred in the ordinary course of business, (BD) all obligations of such Person pursuant to securitization or factoring programs or arrangements, (E) all guarantees and arrangements having the economic effect of a guarantee of such Person of any abandonment other Indebtedness of Intellectual Property that any other Person, (F) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or financial covenants of others, for the purpose of assuring the holder of any obligation which would constitute Indebtedness under any other clause of this definition of such others, or to purchase any other Person’s Indebtedness of the type referred to in any other clause of this definition or any security therefor (excluding any such obligation or undertaking by the Company or any Subsidiary determines thereof in the exercise respect of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee Indebtedness of the Company or any Subsidiary thereof, to the extent (i) such Indebtedness is in existence on the date hereof or is permitted hereby and (ii) the terms of its Subsidiariessuch Indebtedness require such obligation or undertaking), except(G) net cash payment obligations of such Person under swaps, options, derivatives and other hedging agreements or arrangements that will be payable upon termination thereof (assuming they were terminated on the date of determination), and (H) reimbursement obligations under (i) letters of credit, bank guarantees and other similar contractual obligations entered into by or on behalf of such Person or (ii) surety, customs, reclamation or performance bonds other than, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, this clause (Bii) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made those entered into in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (XPO Logistics, Inc.), Merger Agreement (Con-Way Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), and except as otherwise expressly contemplated or permitted by this Agreement or required by applicable Law or as set forth in Section 7.1(a) of the Company Disclosure Schedule, the Company shall, and its Subsidiaries shall cause the business of it and its Subsidiaries to, conduct their business to be conducted in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees officers, employees, lenders and business associates. .
(b) Without limiting the generality of the foregoing foregoing, and in furtherance thereof, from the date of this Agreement hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law as otherwise specifically contemplated or as contemplated by the Scheme Document Annex, (B) otherwise expressly required permitted by this Agreement, (CB) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (C) as is required by applicable Law or (D) as set forth in Section 6.1 7.1(b) of the Company Disclosure LetterSchedule, the Company will not and will cause not permit its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise adopt any change its articles of association, in (A) the certificate of incorporation, incorporation or bylaws of the Company or (B) the other applicable governing documentsinstruments of the Subsidiaries of the Company that, in the case of clause (B), would adversely affect Parent;
(ii) except pursuant to a transaction expressly permitted by any of Sections 7.1(b)(iii) or 7.1(b)(xiv), merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, amalgamate or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesSubsidiaries with any other Person;
(iii) acquire (by mergermake any acquisition in excess of $50 million for all acquisitions in the aggregate, scheme of arrangement, consolidation, acquisition of the capital stock or other ownership interests of any other Person or the business or assets that comprise a business or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business product line of any Person other Person, whether by way of stock purchase, asset purchase, merger, consolidation or any equity interests otherwise, except for acquisitions of any Person inventory or enter into any joint venture or similar arrangementsupplies in the ordinary course of business;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting settlement of Company RSUs Equity Awards outstanding as of the date hereof or issued in accordance with Section 7.1(b)(xvii) (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof), (B) the issuance of Ordinary Shares pursuant shares of Company Subsidiary stock to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of or any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company, (C) as required to comply with any Benefit Plan, Benefit Agreement or other written agreement as in effect on the date of this Agreement and set forth on Section 7.1(b)(iv) of the Company to Disclosure Schedule, or (D) dispositions permitted by clause (xiv), issue, sell, dispose of, grant any shares of capital stock or other ownership interests of the Company or another wholly owned Subsidiary in the ordinary course any of business and in a manner that would not have its Subsidiaries or securities convertible or exchangeable into or exercisable for any material Tax consequences)shares of such capital stock or other ownership interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock, ownership interests or such convertible or exchangeable securities;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than (A) to the Company or its wholly owned Subsidiaries, (B) as required pursuant to any direct or indirect wholly owned Subsidiary Contract made available to Parent in the data room prior to the date hereof, (C) extensions of the Company trade credit in the ordinary course of business and in a manner that would not have any material Tax consequences(D) other than extending trade credit to customers and advancing business expenses to employeesloans, in each case, advances or capital contributions in the ordinary course aggregate of business consistent with past practiceless than $15,000,000);
(vi) authorize, declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, other ownership interests or other securities, property or otherwise, with respect to any of its shares capital stock or other equity ownership interests (except for cash dividends paid or distributions by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other wholly owned direct or indirect wholly owned Subsidiary of the Company); provided, that the Company may, at its election, pay quarterly cash dividends in the ordinary course of business consistent accordance with its past practice) or enter into any agreement practice (including with respect to timing of declaration, record and payment dates and amount) but in no event in an amount that would exceed $0.23 per Share per fiscal quarter; provided, further, that the voting of its capital stock or other equity interestsCompany shall in no event declare any dividend that would be payable after the Effective Time;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its the capital stock, stock of the Company Securities or other ownership interests or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities shares of the capital stock of the Company or other ownership interests of the Company (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes acquisitions in connection with cashless exercises of Company Stock Options or vesting or payment of Company Equity Awards, or Tax withholdings on the vesting or payment of Company RSUsEquity Awards);
(viii) incur incur, assume, issue, modify, renew, syndicate, guarantee, prepay, refinance or otherwise become liable for any Indebtedness (directly, contingent or guarantee such Indebtedness otherwise) (other than (A) any letters of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company credit issued in the ordinary course of business consistent with past practice, (B) for borrowings in the ordinary course of business under (1) the Existing Credit Facility or (2) the Company’s commercial paper program, (C) any Indebtedness between the Company and in a manner that would not have any material Tax consequences), of its Subsidiaries or issue or sell any debt securities or warrants or other rights to acquire any debt security between the Subsidiaries of the Company or any of its Subsidiaries, except for (AD) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed $50,000,000) or acquire or redeem, offer to acquire or redeem, or exercise any right to make an aggregate principal amount of $15 millionoffer to acquire or redeem the 3.375% Notes due November 1, 2020;
(ix) shall not authorize or make any capital expenditures, other than (A) capital expenditures in 2014 not in excess of $40 million in the aggregate, except for (A) expenditures aggregate amount set forth in the current Company’s capital forecast expenditure plan for 2014 previously provided to Parent or capital expenditures in 2015 in an amount not in excess of 110% of the aggregate amount set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or Company’s 2014 capital expenditure plan and (B) any additional capital expenditures not described in clause (A) so long as the aggregate amount of such capital expenditures made pursuant to this clause (B) does not exceed $10,000,000 in response the aggregate; provided, however, that the Company and its Subsidiaries shall be permitted to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwisemake emergency capital expenditures in an amount not to exceed $10,000,000 in the aggregate;
(x) make any material changes with respect to any method financial or Tax accounting methods of Tax reporting income, deductions or other items to financial accounting policies or procedurespurposes, except as required by changes in GAAP or applicable Law or by a Governmental Entitychanges in GAAP;
(xi) except with respect other than (A) Dissenting Shares (which are the subject of Section 4.2(f)), (B) stockholder litigation (which is the subject of Section 7.16) and (C) as contemplated by Section 7.5, settle or propose to settle any litigation, audit, claim, action arbitration or other Proceeding related to Tax Returns proceeding by or before a Governmental Entity (x) for a monetary amount in excess of $10,000,000 in the aggregate, (y) that imposes any Tax Liability (whichmaterial equitable or material non-monetary relief on the Company, for the avoidance any of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company its Subsidiaries or any of its Subsidiaries other than settlements officers or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) directors or (Bz) that requires the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) admission of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed wrongdoing by the Company or any of its Subsidiaries other than of a nature that would reasonably be expected to have any material adverse effect on any division of the payment Company or any of money damagesits Subsidiaries or that disparages Parent or any of its Subsidiaries;
(xii) other than in the ordinary course of business change its fiscal or Tax year or, except to the extent required by Law, make or change any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, ;
(xiii) enter into any settlement, compromise or closing agreement with respect to any material amount of Tax Liability or Tax refund or file any amended Tax Return with respect to any material Tax or surrender any right to claim a material refund for a material amount of TaxTaxes (except to the extent the consequences thereof are adequately reserved in accordance with GAAP in the Company Reports);
(xiiixiv) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire transfer or otherwise dispose of any assets, product lines of its properties or businesses assets (including capital stock of any Subsidiary of the Company or its Subsidiaries, Company) with a value in excess of $50 million in 20,000,000 (including the aggregatevalue of any assumed liabilities), except for other than (A) sales or other dispositions of inventory and non-exclusive licenses of products and services of the Company and its Subsidiaries other assets in the ordinary course of business, (B) any abandonment the licensing or sublicensing of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or (C) as required by agreements, plans, programs or arrangements pursuant to existing Contracts made available to Parent in effect on the dataroom prior to the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant (A) abandon, voluntarily permit to lapse before expiration, any Company IP that is material to the Company and its Subsidiaries, taken as a whole, or (B) sell, transfer or license to any third-person or otherwise extend any Company IP that is material to the Company and its Subsidiaries, taken as a whole, other than non-exclusive licenses of any material Intellectual Property owned rights granted by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow except in the ordinary course of business, enter into or assume any lapse swap, cap, floor, collar, futures contract, forward contract, option and any other derivative financial instrument, contract or abandonment arrangement, based on any commodity, security, instrument, asset, rate or index of any material Intellectual Propertykind or nature whatsoever, whether tangible or intangible, (including for interest rate and foreign exchange rate hedging), except foreign exchange hedging on customary commercial terms in compliance with the Company’s hedging policies in effect on the date hereof;
(xvii) except as required pursuant to a Benefit Plan or Benefit Agreement in effect on the date hereof or as set forth in Section 7.1(b)(xvii) of the Company Disclosure Schedule, (A) grant or provide any severance or termination payments or benefits to any Employees or Other Service Providers, (B) increase the compensation or pay or establish any award or bonus to or for any Employees or Other Service Providers, (C) establish, adopt, terminate or materially amend any Benefit Plan or Benefit Agreement or any registration plan, program, arrangement, policy or grant thereofagreement that would be a Benefit Plan or Benefit Agreement if it were in existence on the date hereof, other than with respect to Benefit Plans and Benefit Agreements that are not described in clause (D) below and in cases where such adoption, termination or any application related thereto amendment applies only to which, or under which, non-Executive Officers of the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practicepractice and to the extent that such action would not reasonably be expected to result in material expense or Liability to the Company or any of its Subsidiaries, enter into (D) grant any Contract that would have been a Material Contract had it been entered into prior equity or equity-based awards, long-term incentive awards or retention awards, (E) hire any new employee of the Company or any Subsidiary of the Company or engage any other individual to this Agreement provide services to the Company or any Subsidiary of the Company, other than with respect to non-Executive Officers of the Company or any Subsidiary of the Company in the ordinary course of business consistent with past practice and with respect to Executive Officers as needed to replace such Executive Officer, (bF) terminate the employment of any current Employee or the engagement of any current contractor of the Company or any Subsidiary of the Company, other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contractfor cause, (G) negotiate, enter into, amend, modifymodify or terminate any Collective Bargaining Agreement, supplement, or (H) waive, terminatelimit, assignrelease or condition any Restrictive Covenant obligation or any Employee or Other Service Provider; provided, conveyhowever, subject that the foregoing clauses (A) – (H) shall not restrict the Company or any of its Subsidiaries from entering into or making available to a Lien newly hired employees or otherwise transferto Employees in the context of promotions based on job performance or workplace requirements, including replacement of an open position, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals each case in the ordinary course of business, amendplans, modifyagreements, terminatebenefits and compensation arrangements (but not including equity or equity-based awards) 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; provided, cancel further, that the consent of Parent shall be required in the event of a promotion or let lapse hiring to the Executive Officer level unless such promotion or hiring is to replace an Executive Officer. For purposes of this Section 7.1(b), the “Executive Officers” are those individuals listed on Section 7.1(b)(xvii) of the Company Disclosure Schedule;
(xviii) adopt or enter into a plan or agreement of complete or partial liquidation or dissolution of the Company;
(xix) grant any Lien on any material insurance policy (or reinsurance policy) or self-insurance program assets of the Company or any of its Subsidiaries in effect other than Permitted Liens;
(xx) enter into any new line of business that would be material to the Company and its Subsidiaries, taken as of a whole, outside the businesses being conducted by the Company and its Subsidiaries on the date hereofhereof and any reasonable extensions thereof, unless simultaneous with such terminationother than in the ordinary course;
(xxi) enter into any Contract that, cancellation after giving effect to the Merger, would limit or lapseotherwise restrict in any material respect Parent or any of its respective Affiliates (other than the Company and its Subsidiaries), replacement policies underwritten by insurance and reinsurance companies from engaging or competing in any line of nationally recognized standing or self-insurance programsbusiness, in each any location or with any Person;
(xxii) materially amend or modify, extend, terminate, sublease or grant any waiver under, any Material Contract or any Contract that would constitute a Material Contract if entered into prior to the date hereof (other than the expiration or renewal of any Material Contract in accordance with its terms), in ease case, providing coverage equal to other than in the ordinary course of business;
(xxiii) enter into any transactions, agreements, arrangements or greater understandings with any significant holder of Shares or their respective affiliated entities (other than the coverage Company and its Subsidiaries) that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effectSecurities Act;
(xxiv) not exercise terminate the employment of any rights Executive Officer without cause or change the terms and conditions of employment of any Executive Officer in a manner which would constitute “good reason” under Section 5 or Section 6 of a Contract between the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Company and such Executive Officer; or
(xxv) agree, authorize or commit commit, whether or not in writing, to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement, Merger Agreement (Sigma Aldrich Corp)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed and except as otherwise expressly contemplated by this Agreement or conditioned), the Stock Option Agreement or set forth in Section 7.1 of the Company shall, and Disclosure Letter):
(a) The business of all Company Entities shall cause its Subsidiaries to, conduct their business be conducted in the ordinary and usual course consistent with past practice (it being understood and agreed that nothing contained herein shall permit the Company to enter into or engage in (through acquisition, product extension or otherwise) the business of selling any products or services materially different from existing products or services of the Company Entities or to enter into or engage in new lines of business without Parent's prior written approval), and it shall be conducted in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects with all applicable Laws.
(b) To the extent consistent with (a) above, each Company Entity shall use all commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, reinsurers, distributors, creditors, lessors, employees and business associates. Without limiting , and maintain all Permits necessary for the generality Company Entities to conduct business in the jurisdictions in which they currently conduct business.
(c) No Company Entity shall permit a material change in any of the foregoing and its underwriting, investment, actuarial, financial reporting or accounting practices or policies or in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time any material assumption underlying an actuarial practice or the termination of this Agreement in accordance with its termspolicy, except as (A) may be required by any change in GAAP, statutory accounting principles or applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:Law.
(d) The Company shall not (i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose ofof or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its Certificate of Incorporation or Bylaws or amend, grantmodify or terminate the Rights Agreement; (iii) split, transfer, combine or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any reclassify its outstanding shares of capital stock; (iv) authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (capital stock other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any dividends from its direct or indirect wholly owned Subsidiary of Subsidiaries, (B) regular quarterly cash dividends on the Company Common Stock not to exceed $.12 per share per quarter, and (C) regular semi-annual cash dividends required to be paid by the Company on the Company 9% Preferred Stock in accordance with the ordinary course Company's Certificate of business and in a manner that would not have any material Tax consequencesIncorporation; or (v) other than extending trade credit to customers and advancing business expenses to employeesrepurchase, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make redeem or pay any dividend otherwise acquire or other distribution, payable in cash, stock, property or otherwise, with respect to permit any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary Subsidiaries to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly any shares of its stock or indirectlyany securities convertible into or exchangeable or exercisable for any shares of its stock, other than as may be required pursuant to the terms of the Company Stock Plans.
(e) No Company Entity shall (i) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock, Company Securities stock of any class or any Other Subsidiary Securities other property or assets (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting shares of Company RSUs);
(viii) incur Common Stock issuable pursuant to Company Options outstanding on the date hereof under any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesStock Plans), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for ; (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xiiii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other Assets (including capital stock of any of Company Subsidiary) or incur or modify any material indebtedness or other material Liability; (iii) make or authorize or commit for any capital expenditures other than in amounts not exceeding $1 million in the aggregate; (iv) by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity, including by way of assumption reinsurance, in excess of $100,000 individually or $1 million in the aggregate (other than in connection with ordinary course investment activities); or (v) make any capital investment in or loan to NHP Holding Company, Inc. or any entity controlled by it.
(f) No Company Entity shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans, or increase the salary, wage, bonus or other compensation of any employees, except annual base salary (and corresponding benefit) increases occurring in the ordinary and usual course of business (which shall not exceed on an annual basis the lesser of 10% or to the extent $5,000 for any individual employee) or as required by Lawapplicable Law or under existing Contracts.
(g) Each Company Entity shall use all commercially reasonable efforts to ensure that no payments are paid or become due under the change of control employment agreements listed in Section 5.6 of the Company Disclosure Letter.
(h) No Company Entity shall pay, discharge, settle or satisfy any claims, Liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of (A) claims arising under the terms of products, contracts or policies issued by the Company Insurance Subsidiaries in the ordinary and usual course of business, and (B) such other claims, Liabilities or obligations (including Litigation) as shall not exceed $250,000 per claim.
(i) No Company Entity shall make or change any material Tax election, settle any material audit, file any material amended income Tax Return, settle Returns or compromise permit any material amount insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of Tax Liability, business.
(j) No Company Entity shall enter into any closing agreement with respect to Contract containing any provision or covenant limiting in any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose respect the ability of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for Entity to (A) sales and non-exclusive licenses of sell any products and or services of or to any other Person, (B) engage in any line of business, or (C) compete with or to obtain products or services from any Person or limiting the ability of any Person to provide products or services to any Company Entity.
(k) No Company Entity shall enter into any new quota share or other reinsurance transaction (A) that does not contain standard cancellation and its Subsidiaries termination provisions, (B) that, except in the ordinary course of business, (B) any abandonment of Intellectual Property that materially increases or reduces the Company Insurance Subsidiaries' consolidated ratio of net written premiums to gross written premiums, or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as which $5 million or more in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans gross written premiums are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned ceded by the Company Insurance Subsidiaries to any Person other than a Company Entity.
(l) No Company Entity shall enter into, amend or terminate any Material Contract (including for this purpose the Amended Shareholders Agreement, dated May 23, 1994, by and among JA Services, Inc., Dimension Holding Company, Inc. and NHP Holding Company, Inc.).
(m) The Company Entities shall make new investments only in Qualified Investments.
(n) The Company shall use all commercially reasonable efforts to ensure that there will be no downgrade in any Company Insurance Subsidiary's rating relating to its financial strength or claims-paying ability as published by A.M. Best Company.
(o) No Company Entity shall take any action or omit to take any action that would cause any of its Subsidiaries other than the conditions set forth in the ordinary course of business consistent with past practice;
(xviSections 8.2(a) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) not being satisfied (other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;by waiver).
(xxiiip) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the No Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, Entity shall authorize or commit enter into a Contract to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (Fortis Inc /Nv/), Agreement and Plan of Merger (Alden John Financial Corp)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof of this Agreement and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed, and except as otherwise expressly contemplated by this Agreement), the Company shall, business of it and shall cause its Subsidiaries to, conduct their business shall be conducted in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associatesassociates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (CB) Buyer as Parent may approve in writing (writing, such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed, (C) as contemplated by the IP Group Sale and Trust Distribution as described in the term sheet attached hereto as Exhibit B or (D) as expressly set forth in on Section 6.1 5.1(a) of the Company Disclosure Letter, the Company will not and will cause not permit its Subsidiaries not to:
(i) amend or otherwise changeany of its organizational documents, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documentsexcept as specifically required by this Agreement;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any of agreements or arrangements imposing changes or restrictions on its Subsidiariesassets, operations or businesses;
(iii) acquire (by mergerfrom any other Person any asset or group of related assets with a value or purchase price in excess of $25,000 individually or $100,000 in the aggregate, scheme in any transaction or series of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementrelated transactions;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of Encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly owned Subsidiary of the Company to the Company or another a wholly owned Subsidiary in of the ordinary course Company), or securities convertible or exchangeable into or exercisable for any shares of business and in a manner that would not have such capital stock, or any material Tax consequences)options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrances on any FCC Licenses, or create or incur any Encumbrances on any other asset or group of related assets of the Company or any of its Subsidiaries having a value in excess of $25,000 individually or $100,000 in the aggregate;
(vi) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to the Company or any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employeesCompany), in each case, except in the ordinary course of business consistent with past practicepractice and in no event in excess of $10,000 individually or $25,000 in the aggregate;
(vivii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock, (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to of the Company to its stockholders or to any other direct or indirect wholly owned Subsidiary unit-holders on a pro rata basis in the ordinary course of business consistent with past practicepractices) or enter into any agreement with respect to the voting of its capital stock or other equity interestsstock;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viiiix) incur any Indebtedness indebtedness for borrowed money or guarantee such Indebtedness indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, incurred in the ordinary course of business consistent with past practice practices (A) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the terms of the indebtedness being replaced as required by agreements, plans, programs or arrangements in effect on of the date hereofof such replacement, or (B) increase in any manner connection with guarantees by the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee Company of indebtedness of wholly owned Subsidiaries of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers as of the Company, in the ordinary course of business consistent Effective Time complying with past practice or as is not material in the aggregate and clause (2A) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except above;
(x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement Agreement, unless it is on terms substantially consistent with, or on terms more favorable to the Company and/or its Subsidiaries (and to Parent and its Subsidiaries and Affiliates following the Closing) than, a Contract it is replacing;
(xi) amend, modify or terminate any Material Contract, or waive, release or assign any material rights, claims or benefits under any Material Contract, in each case except in the ordinary course of business consistent with past practices;
(xii) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles, by Regulation S-X under the Securities Act, or by the Public Company Accounting Oversight Board or Financial Accounting Standards Board;
(xiii) settle (x) any litigation or claim or (by) other proceedings before a Governmental Entity, in each case for an amount in excess of $25,000 (excluding amounts that may be paid under insurance policies);
(xiv) except as required by applicable Law, (A) make any Tax election that is material to the Company and its Subsidiaries, taken as a whole, or take any position that is material to the Company and its Subsidiaries, taken as a whole, on any material Tax Return filed on or after the date of this Agreement, that is inconsistent with elections made or positions taken in prior periods, (B) change any material method of Tax accounting, which change is material to the Company and its Subsidiaries, taken as a whole, (C) amend any Tax Return with respect to an amount of Taxes that is material to the Company and its Subsidiaries, taken as a whole, or (D) settle or resolve any Tax controversy that is material to the Company and its Subsidiaries, taken as a whole, other than, in each case, in the ordinary course of business consistent with past practice;
(xv) transfer, sell, lease, assign, license, surrender, divest, forfeit, cancel, abandon or allow to lapse or expire, fail to extend or defend or otherwise dispose of any part of its assets (including material Intellectual Property), FCC Licenses, securities or equity of any Subsidiary, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, except (A) in connection with services or products provided in the ordinary course of business consistent with past practices or sales of obsolete assets, or (B) for sales, leases, licenses or other dispositions of any asset or any group of related assets (other than FCC Licenses or wireless spectrum) with a fair market value not in excess of $100,000 individually or $250,000 in the aggregate;
(xvi) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice or expirations of any such Contract and in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or aggregate in any Material Contractevent not in excess of $100,000;
(xxiiixvii) other than renewals enter into any Contract pursuant to which the Company or any of its Subsidiaries agrees to provide any wireless services to any Person as an agent or reseller if such Contract is not terminable by the Company or one of its Subsidiaries on 60 days’ or less notice without penalty;
(xviii) hire or rehire any new or additional employees or terminate any current employees, except in the ordinary course of business, amendconsistent with past practice;
(xix) except as required pursuant to a Benefit Plan or existing written, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries binding agreements as in effect as of the date hereofof this Agreement, unless simultaneous with such terminationor as otherwise required by applicable Law, cancellation (A) grant new or lapseincrease existing compensation, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing severance or self-insurance programsother benefits payable or to become payable to any director, in each case, providing coverage equal to officer or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 employee of the Company’s current articles Company or any of association its Subsidiaries, (B) adopt, enter into, establish, or otherwise adopt materially amend, modify or implement terminate any “poison pill” Benefit Plan or any arrangement that would constitute a Benefit Plan had it been in effect as of the date of this Agreement or (C) take any action to accelerate the vesting or payment, or fund or in any other shareholder rights plan way secure the payment, of compensation or benefits under any Benefit Plan (including any equity-based awards), except to the extent expressly required by any such Benefit Plan or otherwise issue any Rights (as defined provided in the Company’s current articles of association) or similar interests or rights)this Agreement; or
(xxvxx) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (Straight Path Communications Inc.), Merger Agreement (Straight Path Communications Inc.)
Interim Operations. (a) Except The Company shall, and shall cause each of its Subsidiaries to, from and after the date hereof until the earliest of the Additional Closing, the end of the Additional Shares Notice Period and the termination of this Agreement (unless Purchaser shall otherwise approve in writing), and except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time as required by a Governmental Entity or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries toapplicable Law, conduct their its business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shallshall use and cause each of its Subsidiaries to use, their respective commercially reasonable efforts to maintain its and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing ’ relations and goodwill with Governmental Entities, customersclients, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associatesagents. From and after the date hereof until the earliest of the Additional Closing, the end of the Additional Shares Notice Period and the termination of this Agreement, the Company shall provide notice to Purchaser if the Other Investor consents to an action restricted pursuant to Section 3.1(b)(3), (4) or (6)–(10) of the Other Investment Agreement.
(b) Without limiting the generality of the foregoing and in furtherance thereofof the foregoing sentence, from and after the date of this Agreement hereof until the earlier earliest of the Effective Time or Additional Closing, the end of the Additional Shares Notice Period and the termination of this Agreement in accordance with its termsAgreement, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, required by a Governmental Entity or applicable Law, expressly required by the terms of any Company Material Contract in effect prior to the date of this Agreement (Ccorrect and complete copies of which have been made available to Purchaser) Buyer may approve or entered into following the date of this Agreement in accordance with the terms of this Section 3.1, as approved in writing by Purchaser (such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or (D) as set forth in Section 6.1 3.1(b) of the Company Disclosure LetterSchedule, the Company will shall not and will shall cause its Subsidiaries not to:
(i1) amend or otherwise change, or authorize adopt or propose any change in its Organizational Documents (other than to amend correct scrivener’s errors or otherwise change its articles of association, certificate of incorporation, bylaws immaterial or other applicable governing documentsministerial amendments);
(ii2) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person person, except for any such transactions solely among wholly owned Subsidiaries of the Company or in connection with any acquisition permitted by clause (3) below, or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiariesliquidate;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii3) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities other equity interests or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities (shares of its capital stock or other than the acquisition of any Ordinary Shares tendered by current or former employees or directors equity interests, in order to pay Taxes each case except in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to tax withholding obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv4) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Investment Agreement (AlTi Global, Inc.), Investment Agreement (AlTi Global, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the The Company Disclosure Letter, the Company covenants and agrees that, after during the period from the date hereof and until of this Agreement through the earlier of the Effective Time Closing or the termination of this Agreement in accordance with its terms Agreement, except (unless Buyer 1) to the extent Parent shall otherwise approve give its prior consent in writing, such approval writing (which consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (2) as set forth in Part 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements, (4) in connection with any COVID-19 Measures or (5) as expressly required by this Agreement, the Company shall, and shall cause its the Company Subsidiaries to, use reasonable best efforts to conduct their its business in the ordinary course consistent in all material respects with past practice and in compliance to maintain and preserve intact its business organization and maintain satisfactory relationships with all applicable Laws andcustomers, to suppliers and distributors and other Persons with whom the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their Company or any Company Subsidiary has material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associatesrelations. Without limiting the generality of foregoing, during the foregoing and in furtherance thereof, period from the date of this Agreement until through the earlier of the Effective Time Closing or the termination of this Agreement in accordance with its termsAgreement, except (1) to the extent Parent shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(a) of the Company Disclosure Schedule, (A3) as may be required by applicable Law Legal Requirements or (4) as contemplated by the Scheme Document Annex, (B) otherwise expressly permitted or required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Lettershall not (and shall not permit any Company Subsidiary to), the Company will not and will cause its Subsidiaries not toin each case by merger, consolidation, division, operation of law, or otherwise:
(i) amend the Company’s Organizational Documents or otherwise change, or authorize or propose to amend or otherwise change its articles the Organizational Documents of association, certificate of incorporation, bylaws or other applicable governing documentsany Company Subsidiary;
(ii) mergesplit, enter into combine, subdivide, change, exchange, amend the terms of or reclassify any scheme shares of arrangement or bid conduct agreement the Company’s capital stock or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate equity interests of the Company or any of its SubsidiariesCompany Subsidiary;
(iii) acquire declare, set aside, make or pay any dividend or other distribution (by mergerwhether payable in cash, scheme of arrangement, consolidation, acquisition of stock or assets or otherwiseproperty) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject with respect to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of the Company’s capital stock of or the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common capital stock or other equity interests interest of any Company Subsidiary, other than dividends or distributions only to the extent paid by a any wholly owned Company Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person, (C) any business, or (D) any assets, except (1) acquisitions by the Company from any wholly owned Subsidiary or among any wholly owned Subsidiaries of the Company, (2) the purchase of equipment, services, supplies and inventory in the ordinary course of business and in a manner that would not have any material Tax consequences);
consistent with past practice, or (v3) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary inbound licenses of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, Intellectual Property in the ordinary course of business consistent with past practice;
(viv) declare, set aside, make or pay except in connection with any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to transaction between the Company and any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to of the Company or to among any other direct or indirect wholly owned Subsidiary in Subsidiaries of the ordinary course of business consistent with past practice) Company, issue, sell, grant or enter into otherwise permit to become outstanding any agreement with respect additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to the voting acquire, any shares of its capital stock or other equity interests, other than shares of Company Common Stock issuable upon exercise of Company Options or the vesting of Company RSUs, in each case, to the extent such Company Options or Company RSUs are outstanding as of the date of this Agreement and such exercise or settlement is in accordance with the terms thereof;
(vi) except as expressly contemplated by this Agreement, take any action to accelerate the vesting of any Assumed Company Option or any Assumed Company RSU Award (other than to implement any existing agreements or arrangement for such acceleration in effect as of the date of this Agreement and set forth on the Company Disclosure Schedule);
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes except in connection with any transaction between the vesting Company and any wholly owned Subsidiary of the Company RSUs);
(viii) incur or among any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transferCompany, sell, leaseassign, licensetransfer, mortgagelease or license to any third party, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)encumber, surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any assetsCompany IP, product lines Material Communications Permit, or businesses right conferred thereby, or material assets of the Company or its Subsidiaries(including any Company Owned Real Property), with a value in excess of $50 million in the aggregate, except for other than: (A) sales and non-exclusive licenses of products and inventory, goods or services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs of obsolete equipment or arrangements assets in effect on the date hereof, ordinary course of business consistent with past practice; (B) increase pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereofPart 4.1(a)(vii) to, or grant or increase any bonuses to, any director, consultant or employee of the Company Disclosure Schedule; (C) non-exclusive licenses granted to customers or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, other third parties in the ordinary course of business consistent with past practice or as is (D) dispositions of assets which do not material constitute Company IP, and with respect to which the fair market value of all such assets does not exceed $500,000 in the aggregate and aggregate;
(2viii) in the case of employees who are executive officers directly or indirectly repurchase, redeem or otherwise acquire any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, increases in base salary or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable for any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, except: (A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the exercise of repurchase rights existing prior to the date of this Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of options to purchase Company Common Stock pursuant to the Company Equity Plans or for withholding Taxes incurred in connection with the Company’s usual exercise, vesting or settlement of Company Options and customary annual review Company RSUs, as applicable, in 2019accordance with the terms of the applicable award;
(ix) incur any indebtedness for borrowed money, so long as guarantee any such increases are consistent indebtedness, issue or sell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances or capital contributions to any other Person, except for: (1) repayment of indebtedness and reborrowings of such repaid amounts under the Existing Company Credit Facility in accordance with past practicethe terms thereof; (2) letters of credit, (C) except as required by Law bank guarantees, security or as required by agreementsperformance bonds or similar credit support instruments at any time, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes not to welfare plans or the Pension Plan made exceed $2,000,000 in the ordinary course of business consistent with past practice; (3) advancement obligations under the Organizational Documents of the Company or the Company Subsidiaries or indemnification agreements with the Company or the Company Subsidiaries and (4) any indebtedness among the Company and its wholly owned Subsidiaries or among any wholly owned Subsidiaries of the Company (and guarantees by the Company or its Subsidiaries in respect thereof);
(x) (A) adopt, terminate or amend any Company Plan, (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any director, independent contractor or current or former employee of the Company or any Company Subsidiary, (C) grant any rights to severance, retention, change in control or termination pay to any current or former director, independent contractor or current or former employee of the Company or any Company Subsidiary, (D) hire or promote any employee above the level of Vice President or whose annual base compensation exceeds $250,000, or equity for (E) terminate the benefit employment of any Person employee of the Company or funding any Company Subsidiary above the level of any Benefit Plan Vice President (except other than for cause); except, in each case, for: (x1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; (2) as required in connection with permitted by the termination terms of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as Company Plans in effect on the date hereof)of this Agreement or as otherwise expressly contemplated by this Agreement; (3) hiring or promotion of employees below the level of Vice President and whose annual base compensation does not or will not (after giving effect to any such promotion) exceed $250,000; and (4) the grant of annual equity awards and payment of cash incentive compensation as contemplated by Part 4.1(a)(x) of the Company Disclosure Schedule;
(xi) except for renewals or extensions of any existing Material Contract entered into in the ordinary course of business consistent with past practice, (Di)(A) materially amend or terminate (except for terminations pursuant to the expiration of the existing term of any Material Contract) any Material Contract or (B) waive, release or assign any material rights under any Material Contracts, or (ii) enter into any Contract or agreement that, if in effect on the date of this Agreement, would constitute a Material Contract (other than Contracts entered into with Top Customers or Top Suppliers in the ordinary course of business consistent with past practice);
(xii) change any actuarial of its methods of financial accounting or accounting practices in any material respect other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except than as required by Lawchanges in GAAP;
(xiii) change or revoke any material Tax election, establishchange or adopt any Tax accounting period or material method of Tax accounting, adoptamend any material Company Return if such amendment would reasonably be expected to result in a material Tax liability, file any material Tax Return prepared in a manner materially inconsistent with past practice, settle or compromise any material liability for Taxes or any Tax audit, claim, or other proceeding relating to a material amount of Taxes, enter into or amend any collective bargaining “closing agreement, labor union, plan, trust, fund, policy or arrangement for ” within the benefit meaning of any current or former directors, consultants, officers or employees Section 7121 of the Code (or any similar state, local or non-U.S. Legal Requirement) if such agreement would reasonably be expected to result in a material Tax liability or have a material impact on Taxes, request any Tax ruling from any Governmental Entity, surrender any right to claim a material refund of their beneficiaries; providedTaxes, howeveror, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice, agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes;
(xvixiv) allow any lapse sell, transfer, assign, license, or abandonment otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), or mortgage, encumber or exchange any material Intellectual PropertyProperty owned, or any registration or grant thereofpurported to be owned, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in of the exercise Company, including, for the avoidance of its reasonable business judgment;
(xvii) enter into doubt, any transaction sale, transfer, assignment, license, or other disposition of, or mortgage, encumbrance or exchange of any such material Intellectual Property to or with any Affiliate of the Company (other than any of its Subsidiaries non-exclusive licenses granted in the ordinary course of business and in a manner that would not have business), or modify, amend, cancel, terminate, waive, release or assign any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (IP License or any immediate family member rights, claims, obligations or Affiliate of the foregoing) providing for payments by benefits thereunder or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment have been a Company IP License had it been entered into prior to or give rise the Effective Time, in each case, with respect to any rights nonmaterial Company IP License, except in the ordinary course of business;
(xv) make aggregate capital expenditures in excess of one hundred ten percent (110%) of the amounts contemplated by the annual capital expenditure budget set forth in Part 4.1(a)(xv) of the Company Disclosure Schedule;
(xvi) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) any special meeting of the Company’s stockholders other than noticethe Company Stockholder Meeting or (B) any other meeting of the Company’s stockholders to consider a proposal that would reasonably be expected to impair, prevent or delay the consummation of the transactions contemplated hereby; provided, that nothing in this clause (xvi) shall prevent the Company from holding its annual meeting of stockholders for the election of directors and such other party matters that shall be required to be brought before any such meeting under any applicable law, rule or parties regulation or that shall be brought before any such meeting by a stockholder of the Company who complies with the requirements of Section 1.3 of the bylaws of the Company;
(xvii) enter into any agreement, understanding or arrangement with respect to the voting of any capital stock or other equity interests of the Company (including any voting trust), other than with respect to awards under the Company Equity Plans otherwise permitted under this Agreement or in connection with the transactions contemplated by this Agreementgranting of revocable proxies in connection with any meeting of the Company’s stockholders;
(xviii) adopt a plan of (A) complete or partial liquidation of the Company or any Subsidiary of the Company or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization;
(xix) institute commence, settle or compromise any general layoff litigation, claim, suit, action or proceeding, except for settlements or compromises that (A) involve solely monetary remedies with a value not in excess of employees$500,000 in the aggregate to be paid by the Company and its Subsidiaries, implement (B) do not impose any early retirement plan restriction on the Company’s business or announce the planning business of such a program that would constitute a “mass layoff” the Company Subsidiaries, (C) do not relate to any litigation, claim, suit, action or “plant closing” proceeding by the Company’s stockholders in connection with this Agreement or the Merger and (as defined under D) do not include an admission of liability or fault on the Worker Adjustment and Retraining Notification Act part of 1988 and similar state and local Laws)the Company or any Company Subsidiary;
(xx) implement materially reduce the amount of insurance coverage or fail to renew or maintain any broad-based early retirement plan or announce the planning of such a programmaterial existing insurance policies;
(xxi) enter into amend or terminate any new line of Company Permits in a manner that adversely impacts the Company’s ability to conduct its business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(axxii) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to any material Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than new Contracts with customers in its reasonable business judgment or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (bB) authorize the disclosure to any third party of any material Trade Secret included in the Company IP in a way that results in loss of trade secret protection, other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;practice; or
(xxiii) other than renewals in the ordinary course of businessauthorize, amend, modify, terminate, cancel approve or let lapse a material insurance policy (enter into any agreement or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal make any commitment to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do take any of the foregoingactions described in clauses “(i)” through “(xxii)” of this sentence.
(b) Neither Buyer nor Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent the Company shall knowingly take otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or permit delayed), (2) as set forth in Part 4.1(b) the Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements, (4) in connection with any of their Subsidiaries to take any action that is reasonably likely to prevent COVID-19 Measures or materially interfere with the consummation of the transactions contemplated (5) as expressly required by this Agreement.
, Parent shall, and shall cause the Parent Subsidiaries to, use reasonable best efforts to conduct its business in the ordinary course consistent in all material respects with past practice and to maintain and preserve intact its business organization. Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (c1) The to the extent the Company shall use otherwise give its reasonable efforts to cause to prior consent in writing (which consent shall not be delivered to Buyer at unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(b) of the Closing Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, Parent and Acquisition Sub shall not (and shall not permit any Parent Subsidiary to), in each case by merger, consolidation, division, operation of law, or otherwise:
(i) executed affidavits dated as amend Parent’s or Acquisition Sub’s Organizational Documents or amend the Organizational Documents of the Closing Date any Parent Subsidiary in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying any manner that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may would be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iadv
Appears in 2 contracts
Sources: Merger Agreement (RigNet, Inc.), Merger Agreement (Viasat Inc)
Interim Operations. (a) Except as may be (xi) expressly provided for in this Agreement, (ii) expressly provided for in the Merger Agreement (including the Schedules), (iii) required by applicable Law, (y) otherwise expressly required by this Agreement Law or (ziv) otherwise set forth consented to in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement writing by Buyer in accordance with its terms advance (unless Buyer shall otherwise approve in writing, such approval which consent will not to be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company shall, and Sellers shall cause its the Companies and the Company Subsidiaries to, conduct and Westway Canada shall (with respect to the Canadian Feed Business), carry on their respective business in the ordinary course consistent with past practice and in compliance with all applicable Laws practice, and, to the extent consistent therewith, it shall, and the Sellers shall cause its Subsidiaries, the Companies and the Company Subsidiaries to and Westway Canada shall (with respect to the Canadian Feed Business) use their respective reasonable best efforts to preserve substantially intact their material respective business organizations intact organization, to keep available the services of their respective current officers and maintain in all material respects existing relations and goodwill employees, to preserve their respective present relationships with Governmental Entities, customers, suppliers, employees distributors, licensors, licensees and other Persons having business associatesrelationships with them. The Parties agree that each of ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇ shall be authorized to provide consent on behalf of Buyer for purposes of this Section 5.1. Without limiting the generality of the foregoing and in furtherance thereofforegoing, from between the date of this Agreement until and the earlier of the Effective Time or the termination of this Agreement in accordance with its termsClosing, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by provided for in this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed Agreement or conditioned) or (D) as set forth in Section 6.1 Schedule 5.1 or as required by applicable Law, the Sellers shall not permit any of the Company Disclosure Letter, Companies or the Company Subsidiaries to, and Westway Canada shall not (with respect to the Canadian Feed Business), without the prior written consent of Buyer (which consent will not and will cause its Subsidiaries not to:be unreasonably withheld conditioned or delayed):
(ia) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable their respective governing documents;
(b) (i) split, subdivide, combine or reclassify any securities of any of the Companies, the Company Subsidiaries or Westway Canada (ii) mergeexcept as pursuant to this Agreement, enter into any scheme of arrangement repurchase, redeem or bid conduct agreement or other similar arrangementotherwise acquire, or consolidate with offer to repurchase, redeem or otherwise acquire, any other Person or restructuresecurities of any of the Companies, reorganize or completely or partially liquidate the Company Subsidiaries or any of its Subsidiaries;
Westway Canada or (iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than except (A) for transfers which would cause either a net cash inflow or outflow between the issuance of Ordinary Shares upon Feed Intercompany Cash Sweep Account and the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereofParent Swingline Account, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubtUK Reorganization, the Company shall not allow the commencement of any new offering periods under the Company ESPP), and (C) in connection with the Comcast Warrants direct or Charter Warrants indirect repatriation (including exercise thereof)in any form or method approved by the relevant entity) of cash or cash equivalents to Netherlands Holdings or its direct or indirect owners, each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business as otherwise consistent with past practice;
(vi) , declare, set aside, make aside or pay any dividend or other distribution, payable distribution (whether in cash, stock, property or otherwise) in respect of, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement Contract with respect to the voting or registration of, any shares of its the Companies’, the Company Subsidiaries’ or Westway Canada’s capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current dividends from its direct or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUsindirect wholly-owned Subsidiary);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Westway Group, Inc.)
Interim Operations. (a) Except as otherwise (xi) required by this Agreement, (ii) required by applicable Law, (yiii) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (Div) as set forth in on Section 6.1 6.1(a) of the Company Disclosure LetterSchedule, from the date of this Agreement until the Effective Time, the Company will, and will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course of business consistent with past practice and, to the extent consistent therewith, the Company shall, and shall cause its Subsidiaries to, use its and their reasonable best efforts to preserve their business organizations intact (including the service of key employees) and to maintain existing relations with key Persons with whom the Company and its Subsidiaries have significant relationships; provided, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Except as otherwise (w) required by this Agreement, (x) required by applicable Law, (y) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth on Section 6.1(b) of the Company Disclosure Schedule, from the date of this Agreement until the Effective Time, the Company will not not, and will cause its Subsidiaries not to:
(i) amend (x) adopt or otherwise change, or authorize or propose submit to amend or otherwise shareholder approval any change its in the articles of associationincorporation or bylaws of the Company or (y) adopt any change in the comparable organizational document of any Subsidiary of the Company that, certificate in the case of incorporationthis clause (y), bylaws would adversely affect or delay the consummation of the Merger or the other applicable governing documentstransactions contemplated by this Agreement;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, (x) merge or consolidate the Company or any of its Subsidiaries with any other Person Person, except for any such transaction between or among any of its Subsidiaries that would not impose, individually or in the aggregate, any changes or restrictions on its assets, operations or business or on the assets, operations and business of the Company and its Subsidiaries taken as a whole that would be adverse to Parent or any of its Subsidiaries or (y) restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, individually or in the aggregate, any changes or restrictions on the assets, operations or business or on the assets, operations and business of the Company or any of its Subsidiaries that would be adverse to Parent or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (A) acquisitions of inventory, supplies and similar materials in the ordinary course of business consistent with past practice, (B) pursuant to Contracts in effect on the date of this Agreement which have been disclosed in unredacted form to Parent prior to the date of this Agreement, (C) in accordance with the Company’s capital expenditure budget made available to Parent prior to the date of this Agreement and set forth in the Company Disclosure Schedule, or (D) any corporation, partnership or other business organization or any assets constituting a division or business line acquisitions for consideration that are not in excess of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement$5,000,000 in the aggregate;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of Lien against, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any Company Securities options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or Other Subsidiary Securities (other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction among the issuance Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries that would not be adverse to Parent or any of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereonits Subsidiaries, if applicable) outstanding prior to the date hereof, or (B) the issuance any issuance, sale, grant or transfer of Ordinary Shares pursuant to (1) the exercise or settlement of Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Options or Company ESPP as in effect RSU Awards outstanding as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants this Agreement or Charter Warrants (including exercise thereof), each as in effect as of granted after the date hereof of this Agreement not in violation of this Agreement or (D2) the issuance or transfer grant of common stock or other equity interests by a wholly owned Subsidiary Company Restricted Share Awards after the date of the Company to the Company or another wholly owned Subsidiary this Agreement not in the ordinary course violation of business and in a manner that would not have any material Tax consequences)this Agreement;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than (A) to the Company or any of its wholly-owned Subsidiaries, (B) pursuant to any direct or indirect wholly owned Subsidiary Contract described in clause (F) of the Company definition of a “Material Contract,” (C) extensions of credit terms to customers or vendors in the ordinary course of business and in a manner that would not have any material Tax consequences(D) other than extending trade credit customary loans or advances to customers and advancing business expenses to employees, in each case, employees in the ordinary course of business consistent with past practicein amounts not to exceed $10,000,000 in the aggregate at any time);
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash (A) dividends or other distributions paid by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly wholly-owned Subsidiary of the Company and (B) regular quarterly dividends to shareholders of the Company by the Company in the ordinary course of business an amount not to exceed $0.18 per Share, in each case declared and paid at such times as is consistent with past practice) or enter into any agreement with respect historical practice over the most recent fiscal year ended prior to the voting date of its capital stock or other equity intereststhis Agreement);
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stockstock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (except for (A) any such transaction by a wholly-owned Subsidiary of the Company that would not be adverse to Parent or any of its Subsidiaries and (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Options, Company Securities Restricted Share Awards or any Other Subsidiary Securities (other than Company RSU Awards or payment of the acquisition of any Ordinary Shares tendered by current or former employees or directors exercise price in order to pay Taxes in connection with the vesting respect of Company RSUsOptions, in each case, outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(viii) incur any Indebtedness create, incur, assume, guarantee, endorse, suffer to exist or guarantee such Indebtedness of another Person (except otherwise be liable with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an $10,000,000 in the aggregate principal amount that is (1) on terms not materially less favorable in the aggregate than the Company’s existing indebtedness or (2) prepayable at any time at par (plus customary floating rate breakage costs, if applicable), (B) guarantees of $15 millionindebtedness of the Company or any of its wholly-owned Subsidiaries, (C) intercompany indebtedness between or among the Company and/or any of its wholly-owned Subsidiaries and (D) in connection with the financing of accounts payable in the ordinary course of business consistent with past practice;
(ix) shall not authorize or make any other than in accordance with the Company’s capital expenditures in excess expenditure budget made available to Parent prior to the date of $40 million in the aggregate, except for (A) expenditures this Agreement and set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter Schedule, incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $1,000,000 individually or $10,000,000 in the aggregate;
(x) other than in the ordinary course of business or in connection with any matter to the extent such matter is expressly permitted by any other clause of this Section 6.1(b), (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (B) expenditures made amend or modify in response any material respect or assign (other than assignments between or among the Company and/or any of its Subsidiaries that would not be adverse to Parent or any emergencyof its Subsidiaries) or terminate any Material Contract, whether caused by warother than expirations of any such Contract in accordance with its terms; provided, terrorismhowever, weather eventsthat in no event may the Company enter into any Contract described in clause (B) or (E) of the definition of a “Material Contract” or any Specified Contract, public health eventsexcept, outagesin each case, operational incidents as would not be adverse to Parent or otherwiseany of its Subsidiaries following the Effective Time other than in any de minimis respect;
(xxi) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law, proposed Law or by a U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental EntityAuthority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(xixii) except with respect to settle any litigationaction, auditsuit, claim, action hearing, arbitration, investigation or other Proceeding related to Tax Returns proceedings (other than any audit or other proceeding in respect of Taxes), for an amount in excess of $2,000,000 individually or $25,000,000 in the aggregate or any Tax Liability (whichobligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, for judgment, decree, settlement, award, injunction or similar order of any Governmental Authority that would restrict the avoidance future activity or conduct of doubtParent, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its their respective Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person other than with respect to monetary settlements only, settlements or compromises of any litigationaction, auditsuit, claim, action hearing, arbitration, investigation or other Proceedings where (A) proceedings to the amount paid in settlement extent reflected or compromise does not exceed $25 million individually or $100 million reserved against in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements balance sheet (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof andof this Agreement for an amount not in excess of the amount so reflected or reserved;
(A) make or change any material Tax election, in each caseother than consistent with past practice, such settlement or compromise does not include (B) change any criminal liabilityentity classification for federal income tax purposes of any material Subsidiary, material injunctive relief or obligation to be performed by (C) create an entity outside of the United States that is (x) a direct Subsidiary of the Company or any of its domestic Subsidiaries and (y) treated as a “disregarded entity” or partnership for U.S. federal income tax purposes, or knowingly create a permanent establishment of the Company or any domestic Subsidiary outside the United States, (D) file any material amended Tax Return, (E) adopt any material accounting method for Taxes, other than consistent with past practice or change any material accounting method for Taxes, (F) settle or compromise any Tax claim for an amount in excess of $2,000,000 individually or $25,000,000 in the payment aggregate, other than with respect to settlements or compromises of money damages;
any Tax claim for an amount that does not exceed the amount disclosed, reflected or reserved in accordance with U.S. GAAP in the Company Reports filed prior to the date of this Agreement, (xiiG) surrender any material claim for a refund of Taxes, (H) enter into any closing agreement relating to a material amount of Taxes or (I) other than in the ordinary course of business business, consent to any extension or waiver of the limitation period applicable to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle claim or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Taxassessment;
(xiiixiv) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire cancel or otherwise dispose of, or permit or suffer to exist the creation of any assetsLien upon, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee assets of the Company or any of its Subsidiaries, exceptincluding capital stock of any of its Subsidiaries, in the case of employees who are not executive officers of the Company, except for sales in the ordinary course of business consistent with past practice and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets having a value not in excess of $1,000,000 individually or $10,000,000 in the aggregate;
(xv) except as required by agreements, plans, programs or arrangements any Benefit Plan in effect on as of the date hereofof this Agreement or adopted or entered into in accordance with this Agreement, (A) terminate, adopt, establish, enter into, amend or renew any Benefit Plan, other than amendments that do not materially increase benefits or result in materially increased administrative costs; (B) increase in any manner the compensation, bonus benefits, severance or benefits of, or make, grant or amend in termination pay of any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company current or any of its Subsidiariesformer (x) directors, except (1y) in the case of executive officers or (z) employees or consultants who are not executive officers natural persons of the CompanyCompany or its Subsidiaries with target total annual cash compensation opportunities (i.e., in the ordinary course of business consistent with past practice base pay or as is not material in the aggregate base rate and (2short term cash incentive target amounts) in the case excess of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, $300,000; (C) except as required by Law increase in any manner the compensation, benefits, severance or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment termination pay of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any consultants who are natural persons of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries with target total annual cash compensation opportunities at or below $300,000, other than in the ordinary course of business consistent with past practice;
; provided, that (xvix) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse increase in bonus or abandonment made by the Company incentive payment corresponds to a routine annual salary or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than base pay increase implemented in the ordinary course of business consistent with past practice or expirations of (y) any such Contract bonus (or increase in bonus) or similar incentive payment is awarded in recognition of the recipient’s performance in the ordinary course of business consistent with past practice; (D) pay any bonus or incentive compensation under any Benefit Plan, other than payments based on actual performance for completed performance periods; (E) accelerate the vesting of or lapsing of restrictions, or amend the vesting requirements, with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan; (F) grant any new severance, change in control, retention benefit or any other similar award (other than pursuant to arrangements entered into with newly hired and promoted employees in the ordinary course of business consistent with past practice in accordance with the terms of such Contract(provided, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transferthat, in whole or each case, such arrangement is in part, rights or interest pursuant all material respects in the form that has been provided to or in any Material Contract;
(xxiiiParent as of the date of this Agreement) other than renewals and for separation agreements entered into with terminated employees who are not executive officers in the ordinary course of businessbusiness consistent with past practice); (G) take any action to accelerate the payment of, amendor to fund or secure the payment, modifyof any amounts under any Benefit Plan; (H) hire any (x) consultant who is a natural person with aggregate annual fees in excess of $300,000, terminate(y) executive officer or (z) employee who, cancel upon commencement of employment would be designated as a “Level 8” employee or let lapse above, except, in the case of clause (z), employees who are hired in the ordinary course of business to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a material insurance policy result of a current employee’s departure; provided, that such new hire’s compensation and benefits package is comparable to that which the Company has historically made available to employees in similar positions, taking into account reasonable modifications for competitive market arrangements; (or reinsurance policyI) or self-insurance program promote any executive officer of the Company or its Subsidiaries promote any employee to an executive officer position; (J) become a party to, establish, adopt, materially amend, commence participation in effect as or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization; or (K) terminate without cause the employment of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 executive officer of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxvxvi) agree, authorize or commit to do any of the foregoing.
(bc) Neither Buyer nor Company After the date of this Agreement and prior to the Effective Time, Parent and its Subsidiaries shall knowingly take not (x) acquire control (it being understood for the purposes of this Section 6.1(c) that obtaining the right to a board seat of a third party shall be deemed control) or permit any (y) enter into an agreement, arrangement or understanding to acquire control of their Subsidiaries to take any action a third party in North America that is reasonably likely to prevent or materially interfere with in the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing grocery industry and operates physical retail stores if (i) executed affidavits dated as such acquisition of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and control or (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property ientr
Appears in 2 contracts
Sources: Merger Agreement, Merger Agreement (Amazon Com Inc)
Interim Operations. (a) Except The Company shall, and shall cause each of its Subsidiaries to, from and after the date hereof until the earlier of the Closing and the termination of this Agreement (unless Purchaser shall otherwise approve in writing), and except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time as required by a Governmental Entity or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries toapplicable Law, conduct their its business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, shall use and shall cause each of its Subsidiaries, Subsidiaries to use their respective commercially reasonable best efforts to preserve their material business organizations intact maintain its and maintain in all material respects existing its Subsidiaries’ relations and goodwill with Governmental Entities, customersclients, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates. agents.
(b) Without limiting the generality of the foregoing and in furtherance thereofof the foregoing sentence, from and after the date of this Agreement hereof until the earlier of the Effective Time or Closing and the termination of this Agreement in accordance with its termsAgreement, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, required by a Governmental Entity or applicable Law, expressly required by the terms of any Company Material Contract in effect prior to the date of this Agreement (Ccorrect and complete copies of which have been made available to Purchaser) Buyer may approve or entered into following the date of this Agreement in accordance with the terms of this Section 3.1, as approved in writing by Purchaser (such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or (D) as set forth in Section 6.1 3.1(b) of the Company Disclosure LetterSchedule, the Company will shall not and will shall cause its Subsidiaries not to:
(i1) amend or otherwise change, or authorize adopt or propose any change in its Organizational Documents (other than to amend correct scrivener’s errors or otherwise change its articles of association, certificate of incorporation, bylaws immaterial or other applicable governing documentsministerial amendments);
(ii2) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person person, except for any such transactions solely among wholly owned Subsidiaries of the Company or in connection with any acquisition permitted by clause (3) below, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material restrictions on its properties, assets, operations or businesses;
(3) acquire assets or equity interests outside of the ordinary course of business from any other person with a value or purchase price in the aggregate in excess of $10,000,000; provided, however, that the Company shall provide notification to Purchaser in the event that the Company or any of its SubsidiariesSubsidiaries acquires assets or equity interests outside of the ordinary course of business from any other person with a value or purchase price in the aggregate in excess of $1,000,000;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv4) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize otherwise enter into any contract or other agreement, understanding or arrangement (whether oral or written) with respect to the issuancevoting of, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or capital stock or other equity interests of any of its Subsidiaries Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any Company Securities options, warrants or Other Subsidiary Securities other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the issuance of Ordinary Shares upon the vesting shares of Company RSUs (and dividend equivalents thereonsuch capital stock, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests securities or convertible or exchangeable securities (I) by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, (II) to the Other Investor (provided that notice shall be provided to Purchaser of any such issuance no less than five business days prior to such issuance), (III) pursuant to any present employee, director or consultant benefit plan or program of or assumed by the Company or any of its Subsidiaries or any present employee agreements or arrangements or programs, including the issuance of performance shares, restricted shares, options or similar securities in an aggregate amount and on the ordinary course terms separately disclosed to Purchaser on February 20, 2024, (IV) in connection with any acquisition permitted by clause (3) above, or (V) in connection with any earn-out, deferred or contingent payment obligations required by the terms of business and any acquisition contract in a manner that would not have any material Tax consequenceseffect prior to the date of this Agreement or entered into following the date of this Agreement in accordance with the terms of this Section 3.1 or (B) proxies or voting agreements solicited by or on behalf of the Company in connection with the 20% Approval);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii5) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities other equity interests or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities (shares of its capital stock or other than the acquisition of any Ordinary Shares tendered by current or former employees or directors equity interests, in order to pay Taxes each case except in connection with tax withholding obligations of the vesting of Company RSUs)Company;
(viii6) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million 10,000,000 in the aggregate, except for (A) expenditures set forth indebtedness in the current capital forecast set forth in Section 6.1(a)(ix) replacement of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, existing indebtedness for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of borrowed money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its on terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business substantially consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or more favorable to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iindebtedness being replaced,
Appears in 2 contracts
Sources: Investment Agreement (AlTi Global, Inc.), Investment Agreement (AlTi Global, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by During the period from the date of this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time Acceptance Date (or the until termination of this Agreement in accordance with its terms Article 7 hereof (unless Buyer shall otherwise approve the “Termination Date”)), and except (i) as may be required by applicable Law, (ii) as may be agreed in writingwriting by Parent (which consent, such approval or lack thereof, may not to be unreasonably withhelddelayed), delayed (iii) as may be required by this Agreement or conditioned)(iv) as set forth in Section 5.1 of the Company Disclosure Schedule, the Company shall, covenants and shall cause agrees with Parent that (A) the business of the Company and its Subsidiaries to, conduct their business shall be conducted in the ordinary course and consistent with past practice and in compliance with all applicable Laws practice, and, to the extent consistent therewith, it shall, the Company and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve intact their current business organizations, to keep available the services of their current officers and key employees, and to preserve their relationships with material customers, suppliers, licensors, licensees, advertisers, distributors and other third parties having business organizations intact dealings with them, and maintain to preserve in all material respects existing relations the goodwill of their respective businesses; provided, however, that no action by the Company or any of its Subsidiaries with respect to matters addressed specifically by any specific provision of clause (B) of this Section 5.1 shall be deemed a breach of this clause (A) of Section 5.1 unless such action would constitute a breach of such specific provision of clause (B), and goodwill with Governmental Entities(B) the Company shall not, customersand (as applicable) shall not permit any of its Subsidiaries to:
(a) (i) authorize for issuance, suppliersissue, employees and business associates. Without limiting deliver, sell, or agree to issue, deliver or sell, or pledge or otherwise encumber, any shares of capital stock or any other securities convertible into, or any rights, warrants or options to acquire, any such shares, except for issuances of Shares upon the generality exercise of the foregoing and in furtherance thereof, from Options outstanding as of the date of this Agreement until or purchase rights under the earlier Company ESPP, or (ii) repurchase, redeem or otherwise acquire, any shares of capital stock or other equity interests, except for the Effective Time or repurchase of Shares in connection with the termination vesting of this Agreement Restricted Shares under, and in accordance with its termsthe terms of, except as the Stock Option Plans and the agreements executed thereunder;
(Ab) required (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by applicable Law or as contemplated by the Scheme Document Annexit, (Bii) otherwise expressly required by this Agreementalter through merger, liquidation, reorganization, restructuring or in any other fashion its corporate structure or ownership, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(iiii) amend or otherwise change, change the Company Certificate or authorize Company Bylaws or propose to amend or otherwise change its articles of association, the certificate of incorporation, bylaws or other applicable governing documentsequivalent organizational documents of any Subsidiary, or (iv) split, combine or reclassify any shares of its capital stock;
(iic) mergedeclare, set aside or pay any dividends on (whether in cash, stock or property), or make any other distributions in respect of, any of its capital stock, except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or another of its wholly owned Subsidiaries with respect to capital stock;
(d) (i) grant or agree to any material increase in the compensation or fringe benefits of, or pay any bonus to or enter into any scheme new employment, severance or termination agreement, or amend any existing employment, severance or termination agreement with any current or former director, officer or employee except for (A) increases in compensation and payment of arrangement bonuses expressly required under employment agreements, bonus plans and other Company Plans, agreements and arrangements existing as of the date of this Agreement, (B) ordinary course raises granted to non-officer employees in connection with regularly scheduled performance reviews and (C) entering into offer letters with newly-hired non-officer employees, the terms and conditions of which shall be substantially similar to the terms and conditions of the forms previously provided to Parent and Purchaser, and which shall not provide for a term of employment or bid conduct agreement severance payments (other than those generally made pursuant to applicable Company policy, if any); (ii) become obligated under any employee benefit plan that was not in existence on the date hereof, or other similar amend, modify or terminate any Company employee benefit plan or any agreement, arrangement, plan or consolidate with policy for the benefit of any other Person current or restructureformer director, reorganize officer or completely employee in existence on the date hereof, except as required by Law or partially liquidate the Company terms of any such plan; or (iii) pay any benefit not required by any plan or arrangement as in effect as of its Subsidiariesthe date of this Agreement (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise required or permitted by the terms of this Agreement);
(iiie) acquire (or agree to acquire, including, without limitation, by mergermerging or consolidating with, scheme of arrangement, consolidation, acquisition of or purchasing all or substantially all the assets or capital stock or assets other equity interests of, any business or otherwise) any corporation, limited liability company, partnership or other business organization or any organization, other than purchases of assets constituting a division or in the ordinary course of business line consistent with past practice and not in excess of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement$100,000;
(ivf) issue, sell, pledge lease, license, mortgage or otherwise encumber or subject to any Lien (whether through the issuance lien or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), otherwise dispose of, grantor agree to sell, transferlease, license, mortgage or authorize the issuance, sale, pledge, encumbrance otherwise encumber or subjecting subject to any Lienlien or otherwise dispose of, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries properties or any Company Securities or Other Subsidiary Securities (assets other than (Ai) properties or assets not in excess of $100,000 in one instance or $200,000 in the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereofaggregate, (Bii) in the issuance ordinary course of Ordinary Shares pursuant to the Company ESPP, but only business consistent with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP)past practice, (Ciii) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests non-exclusive trademark and logo licenses granted by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary partners for marketing purposes in the ordinary course of business and that have a term of one year or less remaining or that are terminable without penalty upon 60 days or less notice; (iv) nonexclusive licenses granted by the Company in a manner the ordinary course of business to customers for such customers’ use of the Company’s products and services, (v) liens relating to Taxes that would are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have any material Tax consequences)been established by the Company in accordance with GAAP, and (vi) liens of landlords, carriers, warehousemen, mechanics and materialmen that are incurred in the ordinary course of business, in each instance for amounts not yet due and payable;
(vg) incur, assume or pre-pay any indebtedness for borrowed money or enter into any agreement to incur, assume or pre-pay any indebtedness for borrowed money, except for (i) payments required or permitted and the incurrence of indebtedness in the ordinary course of business consistent with past practice, and (ii) financing of capital expenditures in the ordinary course of business and not in excess of $50,000;
(h) make or forgive any loans, advances or capital contributions to to, guarantees for the benefit of, or investments in in, any Person (party, other than to any direct loans between or indirect wholly owned Subsidiary of among the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior and cash advances to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company Company’s or any of its Subsidiaries such Subsidiary’s employees for reimbursable travel and other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, expenses incurred in the ordinary course of business consistent with past practice or as required and guarantees made by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee Company of the Company or obligations of any of its Subsidiaries for the benefit of such Subsidiary;
(i) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any person other than the Company and its Subsidiaries, except (1) in enter into any “keep well” or other agreement to maintain any financial statement condition of any person other than the case Company and its Subsidiaries, or enter into any arrangement having the economic effect of employees or consultants who are not executive officers any of the Company, foregoing;
(j) fail to maintain insurance covering risks of such types and in the ordinary course of business such amounts as are consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019past practices, so long or cancel or terminate any material insurance policy that names the Company as beneficiary or loss payable payee;
(k) establish or acquire (i) any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (Subsidiary other than routine changes to welfare plans wholly-owned Subsidiaries, or (ii) Subsidiaries organized outside of the Pension Plan made in the ordinary course of business consistent with past practiceUnited States and its territorial possessions;
(l) amend, modify or accelerate the vesting or payment waive any term of any compensation of its outstanding securities;
(m) enter into any labor or equity for the benefit of collective bargaining agreement, memorandum or understanding, grievance settlement or any Person other agreement or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof commitment to or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect relating to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedlabor union, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xvn) grant a license of settle or compromise any material Intellectual Property owned by the Company pending or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse threatened suit, action, claim or abandonment of any material Intellectual Propertylitigation, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries except in the ordinary course of business and where such settlement or compromise would result in payments (individually and not in the aggregate), net of insurance, by the Company of less than $100,000;
(o) change any of the material accounting policies, practices or procedures (including material Tax accounting policies, practices and procedures) used by the Company and its Subsidiaries as of the date hereof, except as may be required as a manner that would not have result of a change in applicable Law or in GAAP;
(p) make or change any material tax election, make or change any material method of accounting with respect to Taxes or compromise any material Tax consequencesliability or file any material amended Tax Return, except in each case as required by applicable Law;
(q) pay, discharge or named executive officer satisfy any claims, liabilities or obligations (as defined in 17 CFR 229.402) of the Company (absolute, accrued, asserted or any immediate family member unasserted, contingent or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000otherwise), other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to payment, discharge or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers satisfaction in the ordinary course of business and consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement practice of liabilities reflected or (b) other than reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice practice, or expirations payments otherwise expressly permitted by the terms of this Agreement;
(r) transfer or license to any such Contract third party any Company Intellectual Property (other than pursuant to a contract in effect as of the date of this Agreement), or amend or modify any contract in effect as of the date of this Agreement and relating to Company Intellectual Property, other than the grant in the ordinary course of business consistent with past practice of non-exclusive trademark and logo licenses that have a term of one year or less remaining or that are terminable without penalty upon 60 days or less notice and that are granted by the Company to partners for marketing purposes, and other than non-exclusive licenses to customers in accordance connection with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 provision of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)its Subsidiaries’ services; orand
(xxvs) agree, authorize agree or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (Best Buy Co Inc), Merger Agreement (Napster Inc)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 the corresponding section of the Company Disclosure LetterSchedule or otherwise as expressly provided herein, subject to applicable Law, the Company covenants and agrees that, after the date hereof as to itself and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereofthat, from the date of this Agreement until the earlier Effective Time, the business of the Effective Time or Company and its Subsidiaries shall be conducted only in the termination ordinary course and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations intact and maintain their existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, key employees and business associates and keep available the services of this Agreement the present key employees of the Company and its Subsidiaries.
(b) Without limiting the generality of Section 7.1(a) and in accordance with its termsfurtherance thereof, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 the corresponding section of the Company Disclosure LetterSchedule or as otherwise expressly provided herein, from the date of this Agreement until the Effective Time, the Company will shall not and will cause shall not permit its Subsidiaries not to:to (unless Parent shall otherwise approve in writing, in its sole discretion):
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws incorporation or other applicable By-Laws (or similar governing documents);
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesSubsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company;
(iii) acquire (by merger, scheme assets outside of arrangement, consolidation, acquisition the ordinary course of stock or assets or otherwise) business from any corporation, partnership or other business organization or any assets constituting Persons with a division or business line purchase price in excess of any Person or any equity interests $100,000 in the aggregate except pursuant to Contracts in effect as of any Person or enter into any joint venture or similar arrangementthe date of this Agreement;
(iv) other than (A) as required by the terms of Contracts in effect as of the date of this Agreement, (B) upon the exercise of outstanding Company Options or Company Common Warrants or warrants to purchase Series B Stock, (C) pursuant to the terms of the Debentures (to the extent required by such terms) or (D) upon conversion of outstanding shares of Series A Stock and Series B Stock, in each case, in accordance with their terms, issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary in the ordinary course Subsidiary), or securities convertible or exchangeable or exercisable for any shares of business and in a manner that would not have such capital stock, or any material Tax consequences)options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash (i) dividends paid or other distributions by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly wholly-owned Subsidiary of the Company, (ii) periodic dividends and other periodic distributions by non-wholly-owned Subsidiaries of the Company in the ordinary course of business consistent with past practicebusiness, and (iii) or enter into any agreement declaration and payment of scheduled dividends with respect to the voting of its capital stock or other equity interestsSeries A Stock);
(viivi) reclassify, combine, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viiivii) incur any Indebtedness third-party indebtedness for borrowed money or guarantee such Indebtedness indebtedness or any other obligation of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practicepractice and in compliance with the Company’s existing Contracts;
(xviviii) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to the execution of this Agreement, other than any such Contract (A) entered into in the ordinary course of business or (B) providing for any capital expenditure to the extent permitted by Section 7.1(c)(ii);
(ix) other than in the ordinary course of business, amend or modify in any material respect, or terminate or waive any material right or benefit under, any Material Contract;
(x) make any changes with respect to accounting policies or practices, except as required by changes in GAAP or by Law;
(xi) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity or arbitral proceeding for an amount payable by or on behalf of the Company or any Subsidiary in excess of $100,000 in the aggregate for all such litigation or proceedings (exclusive of any amounts to be received by the Company in reimbursement of such settlement amount, whether under any insurance policy or indemnity, other than such amounts that are contested) or which would be reasonably likely to have any material adverse impact on the operations of the Company or any of its Subsidiaries or on any current or future litigation or other proceeding of the Company or any of its Subsidiaries;
(xii) sell, lease, license or otherwise dispose of any assets of the Company or its Subsidiaries except for sales of (A) products or services provided in the ordinary course of business or (B) other assets in aggregate amount not in excess of $100,000 in the aggregate, and other than pursuant to Contracts in effect as of the date of this Agreement;
(xiii) engage in the conduct of any new line of business; or
(xiv) agree, resolve or commit to do any of the foregoing.
(c) Without limiting the generality of Section 7.1(a) and in furtherance thereof, except as set forth in the corresponding section of the Company Disclosure Schedule or as otherwise expressly provided herein, from the date of this Agreement until the Effective Time, the Company shall not and shall not permit its Subsidiaries to (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed and which shall be subject to the procedures set forth on Schedule 7.1(c) of the Company Disclosure Schedule):
(i) other than pursuant to Contracts in effect as of the date of this Agreement, make any loan, advance or capital contribution to or investment in any Person (other than a wholly-owned Subsidiary of the Company) outside the ordinary course of business;
(ii) make or authorize any capital expenditure in excess of $100,000 in the aggregate;
(iii) except as required by Law, make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any material method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods;
(biv) other than pursuant to Contracts in effect as of the date of this Agreement or as otherwise required by Law, (A) enter into any new employment or compensatory agreements with, or increase the compensation and employee benefits of, any employee, consultant, or director of the Company or any of its Subsidiaries (including entering into any bonus, severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such person has the right to any form of compensation from the Company or any of its Subsidiaries), (B) hire any employee to fill a position at the level of (i) executive officer or (ii) vice president or above who reports directly to an executive officer, or (C) adopt or amend in any respect, or accelerate vesting or payment under, any Benefit Plan in the case of clauses (A) and (C) above other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)practice; or
(xxvv) agree, authorize resolve or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 2 contracts
Sources: Merger Agreement (Moscow Cablecom Corp), Merger Agreement (Renova Media Enterprises Ltd.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Law, the Company shall, business of it and shall cause its Subsidiaries to, conduct their business shall be conducted in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, the Company and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, landlords, licensors, licensees, employees and business associates. Without limiting the generality of Notwithstanding the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except (i) as (A) required by applicable Law or as otherwise contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (Cii) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld), delayed (iii) as is required by applicable Law or conditioned) by any Governmental Entity or (Div) as set forth in Section 6.1 of the Company Disclosure LetterSchedule, the Company will not and will cause not permit its Subsidiaries not to:
(ia) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, incorporation (including by way of any certificates of designation) or bylaws or other applicable governing documentsinstruments;
(iib) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesSubsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company;
(iiic) acquire (by mergerassets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $500,000 in any transaction or series of related transactions, scheme other than acquisitions pursuant to Contracts in effect as of arrangementthe date of this Agreement, consolidation, acquisition all of stock or assets or otherwisewhich are identified on Section 5.1(q) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementthe Company Disclosure Schedule;
(ivd) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfertransfer or subject to any Lien, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of or Lien on, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities Subsidiaries, including, without limitation shares of Series A Junior Participating Preferred Stock (in each case, other than (Ai) the issuance or grant of Shares upon the exercise of Company Options that are outstanding as of the date hereof, or (ii) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common capital stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course Subsidiary), or securities convertible or exchangeable into or exercisable for any such capital stock or other equity interests, or any options, warrants or other rights of business and in a manner that would not have any material Tax consequences)kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(ve) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to the Company or any direct or indirect wholly owned Subsidiary of the Company Company) in excess of $500,000 in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceaggregate;
(vif) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash (i) one quarterly dividend to be issued by the Company in its fourth fiscal quarter ended March 3, 2007, not to exceed $0.04 per Share in the aggregate, and (ii) dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practiceSubsidiary) or enter into any agreement with respect to the voting of its capital stock or other equity interestsstock;
(viig) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities stock or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities shares of its capital stock (other than the acquisition of any Ordinary Shares such capital stock or other securities tendered by current or former employees or directors in order to pay Taxes in connection with the vesting exercise of currently outstanding Company RSUsOptions);
(viiih) incur any Indebtedness indebtedness for borrowed money or guarantee guaranty such Indebtedness indebtedness of another Person (except with respect to obligations of other than a wholly owned Subsidiaries Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesCompany), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except in each case for (A) Indebtedness indebtedness, in the ordinary course of business and consistent with past practice, for borrowed money under credit facilities, lines of credit and other debt or borrowing arrangements reflected in the revolving facility under Financial Statements; provided, however that neither the Company Credit Agreementnor its Subsidiaries shall draw down on any amounts under its existing credit facilities except to the extent necessary to comply with letters of credit, (B) loans under credit facilities, lines of credit and other debt or advances borrowing arrangements reflected in the Company's most recent financial statements included in the Company Reports issued from time to wholly owned Subsidiaries and (C) other Indebtedness time in the ordinary course of business in an amount not to exceed an $1,000,000 in the aggregate principal amount of $15 millionoutstanding at any given time;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(xi) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xij) except with respect to any litigationmake, audit, claim, action alter or other Proceeding related to Tax Returns or revoke any Tax Liability (whichaccounting method or material Tax election, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, or settle or compromise any litigation, Tax liability or otherwise pay or consent to any assessment as the result of an audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with relating to Taxes, or waive or extend the statute of limitations in respect of Taxes (other than pursuant to any material amount extensions of time to file Tax or surrender any right to claim a refund for a material amount Returns obtained in the ordinary course of Taxbusiness);
(xiiik) transfer, sell, lease, exclusively license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of of, or subject to any Lien, any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Groupinventory, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or supplies and other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than assets in the ordinary course of business consistent with past practice;
(xvil) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (except as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii, required pursuant to the Benefit Plans in effect on the date of this Agreement disclosed in Section 5.1(h)(i) enter into any Contract that would require payment to or give rise of the Company Disclosure Schedule, pursuant to any rights employment or separation agreement disclosed in Section 5.1(h)(vi) of the Company Disclosure Schedule or any collective bargaining agreement disclosed in Section 5.1(m) of the Company Disclosure Schedule, or as otherwise required by applicable Law, including to comply with Section 409A of the Code, (other than noticei) grant or provide any severance or termination payments or benefits to such other party any officers, employee, independent contractor or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations consultant of the Company or any of its Subsidiaries;
, (aii) other than new Contracts increase (or commit to increase) the compensation, perquisites or benefits payable to any director, officer, employee, independent contractor or consultant of the Company or any of its Subsidiaries, except for increases with customers or suppliers respect to non-executive employees in the ordinary course of business consistent with past practice, (iii) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement new, or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with amend the terms of such Contractany existing, amendemployment agreement or Benefit Plan with any member of management of the Company or any of its Subsidiaries, modify, supplement, waive, terminate, assign, convey, subject to a Lien (iv) grant any equity or otherwise transferequity-based awards that may be settled in Shares or any other equity securities of the Company or any of its Subsidiaries or the value of which is linked directly or indirectly, in whole or in part, rights to the price or interest pursuant to value of any Shares or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program equity securities of the Company or any of its Subsidiaries in effect as Subsidiaries, (vi) accelerate the vesting or payment of compensation payable or benefits provided or to become payable or provided to any current or former director, officer, employee, independent contractor or consultant, (vii) change the date hereofterms of any outstanding Company Option, unless simultaneous or (viii) terminate or materially amend any existing, or adopt any new, Benefit Plan (other than changes that may be necessary to comply with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programsapplicable Law, in each casecase that do not materially increase the costs of any such Benefit Plans); provided, providing coverage equal however, that the manner of any change, amendment or acceleration to comply with Section 409A of the Code must be approved by Parent, which approval shall not be unreasonably withheld or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effectdelayed);
(xxivm) not exercise enter into, amend or extend any collective bargaining agreement or other labor agreement;
(n) enter into, amend or modify any agreement of the type described in Section 5.1(s);
(o) make any capital expenditures in excess of $100,000 individually or $300,000 in the aggregate over and above those capital expenditures identified in the capital expenditure plan set forth in Section 6.1(o) of the Company Disclosure Schedule;
(p) enter into any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement agreement, establish any “poison pill” or other shareholder stockholder rights plan (or otherwise issue any Rights (similar plan commonly referred to as defined in the Company’s current articles of associationa "poison pill") or similar interests enter into any Contract (in each case other than the Stock Plans existing on the date hereof and Company Options issued thereunder) under which the Company or rights)any of its Subsidiaries is or may become obligated to sell or otherwise issue, register, redeem, repurchase, vote, transfer or dispose of any shares of its capital stock or any other securities; or
(xxvq) except as provided in Section 6.2 and Section 6.3, agree, authorize or commit to do any of the foregoing.
. Nothing contained in this Agreement (bincluding, without limitation, this Section 6.1) Neither Buyer nor is intended to give Parent, directly or indirectly, the right to control or direct the Company's or any of its Subsidiaries' operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent's or any of its Subsidiaries' operations. Prior to the Effective Time, each of Parent, Merger Sub and the Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries' respective operations. Subject to the immediately preceding paragraph, in connection with the continued operation of the Company and the Subsidiaries, the Company will reasonably confer in good faith on a regular basis with one or more representatives of Parent, designated by Parent to the Company in writing, regarding operational matters, and the general status of ongoing operations of the Company and will notify Parent promptly of any event or occurrence that has had or may reasonably be expected to have a Company Material Adverse Effect or that, individually or in the aggregate, has materially delayed or impaired, or would reasonably be expected to materially delay or impair, consummation of the transactions contemplated by this Agreement.
(c) , or that, individually or in the aggregate, has resulted, or would reasonably be expected to result, in the failure by the Company to comply with or satisfy in any material respect any condition set forth in Section 7.1 or 7.2; provided, however, that no such notification shall affect the covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement. The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying acknowledges that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary Parent does not own and will not waive any U.S. real property irights it may have under this Agreement as a result of such notice or consultations.
Appears in 2 contracts
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants From and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement to the Effective Time, unless Purchaser has consented in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)writing thereto, the Company shall, and shall cause each of its Subsidiaries to, :
(i) conduct their business respective businesses and operations only in the its usual, regular and ordinary course of business consistent with past practice practice;
(ii) use their reasonable efforts to (A) preserve intact their business organizations, (B) maintain in effect all existing material qualifications, licenses, permits, approvals and other authorizations referred to in compliance Section 5.1 and Section 5.12, (C) keep available the services of the officers and key employees of the Company and each Subsidiary, and (D) preserve existing relationships with all applicable Laws andmaterial customers and suppliers and those Persons having business relationships with them;
(iii) promptly upon the discovery thereof notify Purchaser of the existence of any breach of any representation or warranty contained herein (or, in the case of any representation or warranty that makes no reference to Company Material Adverse Effect, any breach of such representation or warranty in any material respect) or the occurrence of any event that would cause any representation or warranty contained herein no longer to be true and correct (or, in the case of any representation or warranty that makes no reference to Company Material Adverse Effect, to no longer be true and correct in any material respect);
(iv) promptly deliver to Purchaser copies of any report, statement or schedule filed with the extent consistent therewith, it shall, and shall cause its Subsidiaries, SEC subsequent to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. the date of this Agreement.
(b) Without limiting the generality of the foregoing and in furtherance thereofforegoing, from and after the date of this Agreement until the earlier of to the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve unless Purchaser has consented in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letterthereto, the Company will shall not, and shall not and will cause permit any of its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to its stockholders or amend or otherwise change its articles of association, certificate of incorporation, incorporation or bylaws or other applicable comparable governing documentsinstruments, except for any amendment required in connection with the performance by the Company or its Subsidiaries of their respective obligations under this Agreement;
(ii) mergegrant, enter into issue, sell, pledge, encumber, transfer, deliver or register for issuance or sale any scheme shares of arrangement or bid conduct agreement capital stock or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate ownership interest in the Company (other than issuances of Common Stock pursuant to (A) the exercise of Options outstanding on the date hereof or (B) the conversion of any Class B Common Stock outstanding on the date hereof into Class A Common Stock) or any of its SubsidiariesSubsidiaries (other than issuances of capital stock of the Company’s Subsidiaries pursuant to the exercise of Options outstanding on the date hereof), or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest or convertible or exchangeable securities; or accelerate any right to convert or exchange or acquire any securities of the Company (other than Options pursuant to Sections 4.2(d) and 5.2(c)) or any of its Subsidiaries for any such shares or ownership interest;
(iii) effect any stock split, combination, reclassification or conversion of any of its capital stock or otherwise change its capitalization as it exists on the date hereof;
(iv) directly or indirectly redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise acquire, any shares of its capital stock or capital stock of any of its Subsidiaries, other than by repurchasing restricted stock or upon the cashless exercise of options, in each case in the ordinary course of business;
(v) sell, lease, license, encumber or otherwise dispose of any of its assets (including Intellectual Property of the Company or its Subsidiaries or capital stock of any of its Subsidiaries), except in the ordinary course of business (excluding capital stock of its Subsidiaries);
(vi) merge with or acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets assets, joint venture or otherwiseotherwise of a direct or indirect ownership interest or investment) in one transaction or a series of related transactions any corporationPerson, partnership for an aggregate consideration in excess of $1.0 million, any equity interests or other business organization or securities of any assets constituting a Person, any division or business line of any Person or any equity interests all or substantially all of the assets of any Person or enter into any joint venture or similar arrangementPerson;
(ivvii) issueincur or assume any indebtedness for borrowed money, sell, pledge issue or otherwise encumber or subject to sell any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock debt securities of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities assume, guarantee, endorse or Other Subsidiary Securities otherwise become liable or responsible (other than (Awhether directly, contingently or otherwise) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement obligations of any new offering periods under the Company ESPP), other Person (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a except wholly owned Subsidiary Subsidiaries of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business up to $1.0 million), in any such case in excess of $1.0 million, except for the incurrence of indebtedness for working capital purposes in the ordinary course of business under the Company’s or its Subsidiaries’ existing credit facilities and capital expenditures made in a manner that would not accordance with the Company’s or its Subsidiaries’ previously adopted capital budgets, copies of which have any material Tax consequences)been provided to Purchaser;
(vviii) make or forgive any loans, advances or capital contributions to to, or investments in in, any Person other Person;
(ix) (A) enter into any new employment, severance, consulting or salary continuation agreements with any newly hired employees other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and or enter into any of the foregoing with any existing officers or directors or alter or amend in a manner that would not have any material Tax consequences) way, except as may be required by Law or pursuant to any Contract or commitment in existence as of the date hereof, any compensation or benefits due to employees other than extending trade credit to customers and advancing business expenses to employees, in each case, increases or new incentive awards in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, practices; (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit existing Company Employee Plan or to change the manner in which contributions to such plans are made Material Contract or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into increase the amount of compensation of or grant new incentive awards to any Contract that would have been a Material Contract had it been entered into prior to this Agreement director or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program officer of the Company or any of its Subsidiaries in effect other than annual restricted stock granted to directors; (C) except as of required by Law, a Material Contract existing on the date hereof or pursuant to a Company severance policy or Company Employee Plan existing on the date hereof, unless simultaneous with such termination, cancellation grant any severance or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing termination pay to any director or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 officer of the Company’s current articles of association Company or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of its Subsidiaries; (D) except as required by Law, adopt any additional employee benefit plan; (E) except as required by any existing Company Employee Plan or agreement thereunder, provide for the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit payment of any amounts as a result of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
; or (cF) The Company shall use its reasonable efforts pay any bonuses except to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary extent earned under existing awards or new incentive awards listed in Section 6.1(c5.10(h)(i)(6) of the Company Disclosure Letter Letter;
(x) adopt or amend in any material respect or terminate any employee benefit plan or arrangement;
(xi) make any material changes in the type or amount of their insurance coverage or permit any material insurance policy naming the Company or any of its Subsidiaries as a beneficiary or a loss payee to be canceled or terminated other than in the ordinary course of business;
(xii) except as required by changes in applicable Law or GAAP, change any accounting methods, principles or practices used by the Company or its Subsidiaries, in each case, as concurred by its independent public accountants;
(xiii) (A) settle, pay or discharge, any litigation, investigation, arbitration, proceeding or other claim, liability or obligation arising from the conduct of business in the ordinary course for an amount in excess of $1.0 million, except for any settlement, payment or discharge by FTD, Inc. and ▇▇▇.▇▇▇ Inc. of their obligations under that certain Stipulation and Agreement of Compromise, Settlement and Release, dated as of August 4, 2003 (the “Stipulation”) entered into in settlement of the consolidated shareholder class actions entitled “In re ▇▇▇.▇▇▇, Inc. Shareholders Litigation,” Delaware ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇-▇▇, provided, that the Settlement (as defined in the Stipulation) has not been and shall not be changed or altered in any material way since the date of such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iStipulation;
Appears in 2 contracts
Sources: Merger Agreement (FTD Inc), Merger Agreement (FTD Inc)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise Law or as expressly required provided by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure LetterAgreement, the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not and prior to be unreasonably withheld, delayed or conditioned)the Acceptance Time, the Company shall, business of it and shall cause its Subsidiaries to, conduct their business shall be conducted in all material respects in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve the material components of their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, clients, suppliers, licensees, licensors, partners, creditors and lessors, key employees and independent contractors, material service providers, agents and business associatesassociates and other Persons with which it or any of its Subsidiaries has significant business relations and keep available the services of its and its Subsidiaries’ present officers and key employees and independent contractors; provided, however, that the Company and its Subsidiaries shall be under no obligation to and shall not, without Parent’s prior written consent, put in place any new retention programs or include additional personnel in any existing retention programs. Without limiting the generality of the foregoing and in furtherance thereofimmediately preceding sentence, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsAcceptance Time, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (CB) Buyer may approve in writing with the prior written consent of Parent (such approval which consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or (DC) as set forth in on Section 6.1 6.1(a) of the Company Disclosure LetterSchedule, the Company will not and will cause not permit its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose any change or amendment (whether by merger, consolidation or otherwise) to amend or otherwise change its articles of association, certificate of incorporation, incorporation or bylaws or other applicable similar governing documentsdocuments of the Company and its Subsidiaries;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among wholly owned Subsidiaries of the Company not in violation of any instrument binding on the Company or any of its Subsidiaries and that would not reasonably be expected to result in a material increase in the net Tax liability of the Company and its Subsidiaries, taken as a whole;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any (A) shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A1) the issuance issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or (2) the issuance or transfer of Shares pursuant to awards outstanding as of the date of this Agreement under, and as required by the terms of the Stock Plans as in effect as of the ordinary course date of business and in a manner that would not have this Agreement), (B) securities convertible into or exercisable, exchangeable or redeemable for any material Tax consequences)shares of such capital stock, any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible, exercisable, exchangeable or redeemable securities, or (C) any Voting Debt;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(viiv) declare, authorize, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect a wholly owned Subsidiary in of the ordinary course of business consistent with past practiceCompany) or enter into any agreement Contract with respect to the voting of its capital stock or other equity interestsstock;
(viiv) adjust, reclassify, split, combinecombine or subdivide, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viiivi) incur acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any Indebtedness assets, securities, properties, interests, or guarantee such Indebtedness businesses or make any investment (whether by purchase of another Person stock or securities, contributions to capital, loans to, or property transfers), except for the capital expenditures contemplated by (except with respect to obligations ix) below, in each case, other than (A) acquisitions of wholly owned Subsidiaries of the Company supplies, equipment, inventory, third party Software and capital in the ordinary course of business consistent with past practice (it being understood and agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business consistent with past practice), or (B) acquisitions with a manner that would value or purchase price (including the value of assumed liabilities) not have in excess of $100,000 in any material Tax consequences)transaction or related series of transactions or $400,000 in the aggregate;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) except for such advances incurred in the ordinary course of business consistent with past practice not to exceed $500,000 in the aggregate;
(viii) incur, alter, amend or modify any indebtedness or guarantee indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness the incurrence of indebtedness for borrowed money under incurred in the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount ordinary course of business consistent with past practice not to exceed an aggregate principal amount of $15 million25,000 in the aggregate;
(ix) shall not make or authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwiseexpenditures;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entityapplicable GAAP;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.176.10, release, assign, compromise, discharge, waive, settle or compromise satisfy any litigationAction (including any Action relating to this Agreement, audit, claim, action the Offer or the Merger) or other Proceedings against the Company rights, claims, liabilities or any of its Subsidiaries obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) other than releases, assignments, compromises, discharges, waivers, settlements or compromises of any litigation, audit, claim, action or other Proceedings satisfactions where (A) the amount paid in settlement or compromise does payments not covered by insurance do not exceed $25 million individually or $100 million 850,000 in the aggregate (including or providing for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damagesmonetary relief (except for confidentiality, non-disparagement, releases, agreements not to ▇▇▇ and other similar provisions in a settlement agreement);
(xii) other than (A) amend or modify, in any material respect, or terminate any Material Contract, material lease for Leased Real Property or material Company Permit, (B) waive, release or assign any material rights or material claims under any Material Contract or (C) except in the ordinary course of business or consistent with past practice enter into any Contract that would have been a Material Contract had it been entered into prior to the extent required by Law, execution of this Agreement;
(xiii) make any material Tax election, file materially amend any material amended income Tax Return, settle or compromise finally resolve any material amount controversy or change any method of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of businessaccounting;
(xiv) (A) grantgrant to any third Person any license, increase sublicense, covenant not to ▇▇▇, immunity, authorization, release or other right with respect to any material Intellectual Property; (B) assign or transfer to any third Person any material Intellectual Property; or (C) abandon any material Company Registered Intellectual Property Rights, in each case except as in the ordinary course of business consistent with past practice;
(xv) terminate any executive officers or hire any new employees unless such hiring is in the ordinary course of business consistent with past practice;
(xvi) adopt, enter into, amend, terminate or extend any Collective Bargaining Agreement;
(xvii) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (A) grant or provide any retention, change of control, severance or termination payments or benefits to any director, consultant officer or, other than in the ordinary course of business consistent with past practice, employees (who are not officers) of the Company or any of its Subsidiaries, (B) increase the compensation, bonus or pension, welfare, severance, change-in-control or other benefits of, pay any bonus to, any director, officer or, other than in the ordinary course of business consistent with past practice, non-officer employee of the Company or any of its Subsidiaries other than, in the case of non-officer employees, base salary increases or bonuses awarded in the ordinary course of business consistent with past practice (which bonuses shall not exceed $10,000 in the aggregate), (C) make any new equity-based awards to any director, officer or non-officer employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (BD) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, enter into amend or terminate any Company Benefit Plan or amend the terms of any Benefit Plan outstanding equity-based awards, (other than routine changes E) take any action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment payment, or fund or in any other way secure the payment, of any compensation or equity for the benefit of benefits under any Person or funding of any Company Benefit Plan (except (x) as required in connection with the termination of the Arris GroupPlan, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as extent not already provided in effect on the date hereof)any such Company Benefit Plan, (DF) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP, or (EG) except as required by Law, establish, adopt, enter into or amend forgive any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former loans to directors, consultants, officers or key employees of the Company or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsits Subsidiaries;
(xvxviii) grant a license reclassify any independent contractor as an employee of any material Intellectual Property owned by the Company or any of its Subsidiaries unless the Company reasonably believes that such a change is advisable in order to comply with applicable law;
(xix) fail to use commercially reasonable efforts to renew or maintain the Insurance Policies or comparable replacement policies, other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiariesbusiness;
(axxi) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practiceadopt, enter into or effect any Contract plan of complete or partial liquidation, dissolution, reorganization or restructuring;
(xxii) take any action that would, or would have been a Material Contract had it been entered into prior to this Agreement be reasonably likely to, individually or (b) other than in the ordinary course aggregate, prevent, materially delay or materially impede the consummation of business consistent with past practice the Offer, the Merger or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;other transactions contemplated by this Agreement; or
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize authorize, propose, commit or commit announce an intention to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described Nothing contained in Section 897(c)(16.1(a) of the Codeshall give to Parent or Acquisition Sub, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth directly or indirectly, rights to control or direct the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended operations prior to the Closing Date)Acceptance Time in violation of applicable Law. Prior to the Acceptance Time, certifying the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its operations and shall not be required to obtain consent of Parent if it reasonably believes that each such Subsidiary does not own any U.S. real property idoing so would violate applicable Law.
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until prior to the earlier of the Effective Time or the termination of this Agreement in accordance with its terms Article VIII and the Effective Time (unless Buyer Parent shall otherwise approve in writing, writing (such approval not to be unreasonably withheld, delayed or conditioned)), and except as otherwise expressly required or permitted by this Agreement or as required by applicable Law, the Company shall, business of it and shall cause its Subsidiaries to, conduct their business shall be conducted in all material respects in the ordinary course consistent with past practice and in compliance with all applicable Laws of business and, to the extent consistent therewithwith the foregoing and the restrictions in the next sentence, it shall, the Company and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and substantially intact, maintain in all material respects existing relations and goodwill satisfactory relationships with Governmental Entities, customers, suppliers, employees and other business associatesrelationships having significant business dealings with them) and keep available the services of their key employees and agents; provided that any action specifically permitted by the exceptions to the restrictions set forth in clauses (i)—(xviii) of this Section 6.1(a) shall be deemed in compliance with this sentence. Without limiting the generality of the foregoing and in furtherance thereofforegoing, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsArticle VIII and the Effective Time, except (w) as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required or permitted by this Agreement, (Cx) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), (y) as is required by applicable Law or (Dz) as set forth in Section 6.1 6.1(a) of the Company Disclosure Letter, the Company will not and will cause not permit its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise adopt any change in its articles of association, certificate of incorporation, incorporation or bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesSubsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company;
(iii) acquire (by merger, scheme of arrangement, consolidation, make any acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division in excess of $5,000,000 individually or $15,000,000 in the aggregate, other than acquisitions of assets acquired from the Company’s vendors or suppliers in the ordinary course of business line of any Person or any equity interests the Company and its Subsidiaries; Table of any Person or enter into any joint venture or similar arrangement;
Contents (iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any shares of capital stock or other equity securities of the Company (including Ordinary Shares) or any of its Subsidiaries or securities convertible or exchangeable into or exercisable for, or give any Company Securities Person a right to subscribe for or Other Subsidiary Securities acquire (including options, warrants or other rights of any kind), any shares of capital stock or other equity securities (other than (A) the issuance of Ordinary Shares upon the vesting in respect of Company Options, RSUs (and dividend equivalents thereon, if applicable) PSUs outstanding prior to as of the date hereof, of this Agreement as required by their terms as in effect on the date of this Agreement or (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Interim Operations. (a) Except After the date of this Agreement and prior to the Effective Time, except as (xw) required by applicable LawLaw or by a Governmental Entity, (x) otherwise expressly contemplated by this Agreement, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 6.1(a) of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time Letter or the termination of this Agreement in accordance with its terms (unless Buyer z) Parent shall otherwise approve in writing, writing (such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, shall use reasonable best efforts to cause the business of it and shall cause its Subsidiaries to, conduct their business to be conducted in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material its business organizations organization and that of its Subsidiaries intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annexa Governmental Entity, (B) otherwise expressly required contemplated by this Agreement, (C) Buyer may as set forth in Section 6.1(a) of the Company Disclosure Letter or (D) Parent shall approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter), the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise adopt any change in its articles of association, certificate of incorporation, bylaws incorporation or by-laws or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (including by merger, scheme of arrangement, consolidation, consolidation or acquisition of stock equity interests or assets or otherwiseany other business combination) (A) any corporation, partnership or partnership, other business organization or division thereof or (B) any assets constituting a division outside of the ordinary course of business from any other Person in any transaction or business line series of any Person or any equity interests related transactions (in the case of any Person or enter into any joint venture or similar arrangementclause (B), for consideration in excess of $5 million in the aggregate);
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, (x) any shares of capital stock or other equity interests of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the exercise of Company Options outstanding on the date hereof or the vesting of Company RSUs Restricted Stock (and dividend equivalents thereon, if applicable) outstanding prior to on the date hereof, or (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course Subsidiary), (y) securities convertible or exchangeable into or exercisable for any shares of business and in a manner that would not have such capital stock or other equity interests, or (z) any material Tax consequences)options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to among the Company and any direct or indirect wholly owned Subsidiary of the Company Company) in excess of $1,000,000 in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceaggregate;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in and except for quarterly dividends paid by the ordinary course Company to holders of business Shares consistent with past practicepractice and not in excess of $0.05 per Share) or enter into any agreement with respect to the voting of its capital stock or other equity interestsstock;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities stock or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities shares of its capital stock (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the exercise of Company Options or the vesting of Company RSUsRestricted Stock);
(viii) incur add an employer stock investment option to any Benefit Plan intended to be qualified under Section 401(a) of the Code or permit any participant in any such Benefit Plan to direct the investment of his or her plan account in employer securities within the meaning of Section 407(d) of ERISA;
(ix) incur, assume or otherwise become liable for any Indebtedness for borrowed money or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries other than of the Company in or any wholly owned Subsidiary of the ordinary course of business and in a manner that would not have any material Tax consequencesCompany), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under pursuant to the revolving facility under the Company Second Amended and Restated Credit Agreement, (B) loans or advances to wholly owned Subsidiaries dated August 4, 2011 borrowed in the ordinary course of business and (C) other Indebtedness in an a net amount not to exceed an aggregate principal amount $40 million (including letters of $15 millioncredit pursuant thereto);
(ixx) shall not authorize or make any capital expenditures in excess of $40 million 1,000,000 in the aggregate, except for (A) expenditures set forth as included as a line item in the current Company’s 2013 capital forecast set forth budget, with respect to the 2013 fiscal year, or in Section 6.1(a)(ixthe 2014 capital budget, with respect to the 2014 fiscal year (true and correct copies of which have been made available to Parent) and except for expenditures related to operational emergencies solely to the extent necessary to restore and resume ordinary course operations and functions disrupted as a result of the Company Disclosure Letter or (B) expenditures made in response to any such operational emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(xxi) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP GAAP, or Law the interpretation thereof, or by a Governmental Entity;
(xixii) except with respect to any litigationsettle, auditrelease, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle waive or compromise any litigationclaim or obligation (whether absolute, auditaccrued, claim, action contingent or other Proceedings otherwise) or any pending or threatened Action by or before a Governmental Entity against the Company or any of its Subsidiaries other than settlements or compromises of Subsidiaries, except for any litigation, audit, such claim, action obligation or other Proceedings where (A) the amount paid Action that would not result in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including liability for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than in an amount in excess of $500,000 individually or $1 million in the aggregate (in each case, net of applicable insurance proceeds after payment of money damagesdeductibles) and that does not otherwise impose any material obligations or restrictions on the business or operations of the Company or any of its Subsidiaries;
(xiixiii) other than in the ordinary course of business or to the extent required by Law, make or change any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiiixiv) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material amount of assets, product lines or businesses of the Company or Company, including capital stock of any of its Subsidiaries, other than inventory, supplies and other assets (including with a value in excess of $50 million in the aggregaterespect to Intellectual Property, except for (Awhich shall be governed solely under Section 6.1(a)(xvii)) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of businessbusiness or pursuant to Contracts in effect prior to the date of this Agreement (true and correct copies of which, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment subject to abandon in the ordinary course of businessredactions, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of businesshave been provided to Parent);
(xivxv) except as required pursuant to the terms of any Benefit Plan set forth on Section 5.1(h)(i) of the Company Disclosure Letter, (A) grant, increase grant or provide any retention, change of control, severance or termination payments or benefits to any directoremployee, consultant director or other individual service provider, (B) grant any new equity-based awards (including any phantom stock award) to any employee or accelerate the vesting of any award under the Company Stock Plan, (C) materially increase the compensation of any employee, director or any of its Subsidiariesother individual service provider, except, in the case of other than routine salary increases for non-officer employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof(with respect to both timing and amount), (BD) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or except to the Pension Plan made 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) or (E) hire any employee, director or other individual service provider with an annual base salary in excess of $175,000, and on terms that do not provide for any payments or benefits upon termination;
(xvi) (A) terminate or materially amend or modify any Material Contract or any Lease (other than, except with respect to Leases, extensions at the end of a term or on overall terms no less favorable than the terms of the existing Material Contract and for a term no longer than the existing term of such Material Contract and in no event longer than one year) or enter into a Contract that, if in effect on the date of this Agreement, would have been a Material Contract or (B) enter into any Contract that contains a change of control or similar provision that would require a payment to any Person counterparty thereto in connection with the consummation of the Offer, the Merger and/or the other transactions contemplated in this Agreement that would not otherwise be due;
(xvii) sell, transfer, assign, abandon or otherwise dispose of, or grant any license or sublicense with respect to, any Company Intellectual Property (other than any license granted or abandonment in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xvxviii) grant implement any facility closings or reductions in force not in compliance with the WARN Act;
(xix) fail to maintain in full force and effect any Insurance Policy material to the operations of the business of the Company and its Subsidiaries taken as a license whole;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable or participate in any material Intellectual Property owned activity that would reasonably be expected to result in a temporary increase in the demand for the products offered by the Company or any of its Subsidiaries (in each case, other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxvxxi) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer Parent, Merger Sub nor the Company shall knowingly take or permit any of their Subsidiaries Affiliates to take any action that is reasonably likely to prevent or materially interfere with delay the consummation of the Offer, the Merger or the other transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts Nothing contained in this Agreement is intended to cause give Parent or Merger Sub, directly or indirectly, the right to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth control or direct the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended or its Subsidiaries’ operations prior to the Closing Date)Effective Time, certifying that and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each such Subsidiary does not own any U.S. real property iof Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of The Company and the Company Disclosure Letter, Shareholders agree during the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from period commencing on the date of this Agreement until through the earlier Closing Date or termination of the Effective Time or the termination of this Agreement in accordance with its terms, under Article VIII (except as (A) required by applicable Law or as expressly contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve including any Exhibits and Schedules hereto, or to the extent that Purchaser shall otherwise consent in writing (such approval writing, which consent shall not to be unreasonably withheld), delayed that as to the Company:
(1) The Company shall carry on the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact its present business organization, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it.
(2) The Company shall not and shall not propose to: (a) declare, set aside or conditionedpay any dividend, on, or make other distributions in respect of, any of its capital stock, except for: (i) those S Corporation distributions necessary to cover applicable pass-through taxes on the Company’s net income prior to Closing; or (Dii) such distributions of cash prior to the Closing, provided the Company retains sufficient Working Capital in amounts at least equal to or greater than the Minimum Working Capital Amount; (b) purchase or redeem any shares of its capital stock; (c) split, combine or reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (d) redeem, repurchase or otherwise acquire any shares of its capital stock; or (e) otherwise change its capitalization.
(3) Except as set forth contemplated by this Agreement, the Company shall not sell, issue, pledge, authorize or propose the sale or issuance of, pledge or purchase or propose the purchase of, any shares of its capital stock of any class or securities convertible into, or rights, warrants or options to acquire, any such shares or other convertible securities.
(4) The Company shall not amend its articles of incorporation or its bylaws.
(5) The Company shall not sell, lease, pledge, encumber or otherwise dispose of or agree to sell, lease, pledge, encumber or otherwise dispose of, any of its assets that are material to the Company’s Business or any other assets except in Section 6.1 the Ordinary Course of Business and in no event amounting in the aggregate to more than $25,000.
(6) The Company shall not incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities of the Company Disclosure Letteror guarantee any debt securities of others other than in the Ordinary Course of Business consistent with prior practice and in no event amounting in the aggregate to more than $25,000.
(7) The Company shall not make any capital expenditures in excess of $25,000 individually or $100,000 in the aggregate without the Purchaser’s prior written consent.
(8) The Company shall maintain the levels of materials and supplies used in the Business consistent with Company’s past practice for similar periods of the calendar year.
(9) The Company shall not accelerate the collection of its accounts receivable or delay the payment of its accounts payable or other liabilities, in each case arising out of the operation of the Business in a manner which would be inconsistent with past practice.
(10) The Company shall not adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan; provided, however, the Company shall arrange to terminate its 401K Plan, if any, as of the Closing, with the understanding that all covered employee funds will not and will cause its Subsidiaries not to:be transferred to a 401K Plan maintained by Purchaser or Radiant.
(i11) amend Except for (a) payment of bonuses described in the Shareholders’ Schedules and (b) wage increases or otherwise changeraises to non-officer or director employees in the Ordinary Course of Business, the Company shall not grant to any employees any increase in compensation (except for the Employment Agreements) or authorize in severance or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) mergetermination pay, enter into any scheme of arrangement or bid conduct employment agreement or other similar arrangementwith any employee, or consolidate with grant, pay or accrue to an employee, any other Person bonus or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;incentive compensation.
(iii12) The Company shall not acquire (by merger, scheme of arrangement, consolidation, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or subdivision thereof, or make any assets constituting a division investment by either purchase of stock or business line securities, contributions to capital, property transfer or, except in the Ordinary Course of Business, purchase of any Person property or any equity interests assets, of any Person other individual or enter into any joint venture or similar arrangement;entity.
(iv13) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the The Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, election or settle or compromise any material amount Tax liability.
(14) The Company will duly and timely file all reports or Tax Returns required to be filed with federal, state, local and foreign authorities and will promptly pay all Tax, assessments and governmental charges levied or assessed upon it or any of Tax Liabilityits properties (unless contesting such in good faith and adequate provision has been made therefor).
(15) The Company shall not waive, enter into release, grant or transfer any closing agreement with respect to rights of material value or modify or change in any material amount respect any Material Contract other than in the Ordinary Course of Tax or surrender any right to claim a refund for a material amount of Tax;Business.
(xiii16) transferThe Company shall not take any action, sellor fail to take any action, lease, license, mortgage, pledge that is not in the Ordinary Course of Business or otherwise encumber or subject that is reasonably likely to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of result in any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales representations and non-exclusive licenses of products and services warranties of the Company and its Subsidiaries the Shareholders set forth in the ordinary course of business, (B) this Agreement becoming untrue in any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;material respect.
(xiv17) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits The Company shall maintain in full force and effect all insurance coverages for its properties and assets substantially comparable to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect coverages existing on the date hereof.
(18) Within thirty (30) days of the close of each month after the execution of this Agreement, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing Company shall make available to the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee Purchaser a preliminary unaudited balance sheet and income statement for the Company disclosing the financial position and results of operations of the Company for the preceding month and year to date.
(19) The Company shall not enter into, or modify, any of its Subsidiaries, except contract with a Related Person.
(120) in the case of employees or consultants who are not executive officers of The Company will pay off and close the Company, in the ordinary course of business consistent ’s credit facility with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary ▇▇▇▇▇ Fargo simultaneously in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiariesClosing; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application UCC-3 termination statements related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to will be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897post-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iClosing.
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by From the date of this Agreement or (z) otherwise until the Effective Time, except as set forth in Section 6.1 SECTION 6.2 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement unless Parent has consented in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)writing thereto, the Company shall, and shall cause its Subsidiaries to, (i) conduct their business in the its operations according to its ordinary course of business consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause practice; (ii) use its Subsidiaries, to use their respective reasonable best efforts to preserve their material intact its business organizations intact and goodwill, keep available the services of its officers and employees, and maintain in all material respects existing relations satisfactory relationships with those Persons having business relationships with them; and goodwill with Governmental Entities(iii) upon the discovery thereof, customers, suppliers, employees and business associates. Without limiting the generality promptly notify Parent of the foregoing existence of any breach of any representation or warranty contained herein (or, in the case of any representation or warranty that makes no reference to Material Adverse Effect, any breach of such representation or warranty in any material respect) or the occurrence of any event that would cause any representation or warranty contained herein no longer to be true and correct (or, in furtherance thereofthe case of any representation or warranty that makes no reference to Material Adverse Effect, from to no longer be true and correct in any material respect).
(b) From and after the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 SECTION 6.2 of the Company Disclosure Letter, unless Parent has consented in writing thereto, the Company will not shall not, and will shall cause each of its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws incorporation or other applicable governing documentsby-laws;
(ii) mergeissue, enter into sell or pledge any scheme shares of arrangement or bid conduct agreement its capital stock or other similar arrangementownership interest in the Company (other than issuances of Common Stock in respect of any exercise of stock options outstanding on the date hereof and disclosed in SECTION 4.4 of the Company Disclosure Letter) or its Subsidiaries, or consolidate with any other Person securities convertible into or restructureexchangeable for any such shares or ownership interest, reorganize or completely or partially liquidate the Company or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest, or convertible or exchangeable securities (or derivative instruments in respect of the foregoing);
(iii) effect any stock split or otherwise change its capitalization as it exists on the date hereof, or directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of its Subsidiaries;
(iiiiv) (A) grant, confer or award any option, warrant, convertible security or other right to acquire (by merger, scheme any shares of arrangement, consolidation, acquisition of its capital stock or assets take any action to cause to be exercisable any otherwise unexercisable option under any Company Stock Plan (except as otherwise required by the terms of such unexercisable options), (B) accelerate or otherwise) waive any corporationor all of the goals, partnership restrictions or other business organization conditions imposed under any Award, or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(ivC) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of award any shares of capital stock of the Company (including Ordinary Shares) or any right to acquire shares of its Subsidiaries or capital stock under any Company Securities or Other Subsidiary Securities Stock Plan (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with except as otherwise required by such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequencesplan);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make aside or pay any dividend or make any other distribution, payable in cash, stock, property distribution or otherwise, payment with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities ownership interests (other than such payments by the acquisition of any Ordinary Shares tendered by current or former employees or directors in order Subsidiaries to pay Taxes in connection with the vesting of Company RSUsCompany);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by From the date of this Agreement and until the Effective Time or the earlier termination of this Agreement, except (zw) otherwise as set forth in Section 6.1 5.1(a) of the Company Disclosure Letter, (x) as expressly contemplated by this Agreement, (y) to the Company covenants and agrees thatextent consented to in writing by Parent (which consent, after in the date hereof and until the earlier cases of the Effective Time matters set forth in subclauses (ii), (ix), (xi), (xiii), (xvi), (xix) and (xx) (solely in respect of agreements, authorizations or commitments in respect of the termination of this Agreement in accordance with its terms (unless Buyer immediately foregoing subclauses) below shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), and, in all other cases, shall be in Parent’s sole discretion) or (z) as required by applicable Law, the Company shall, and shall cause each of its Subsidiaries to, conduct their business its operations in all material respects in the ordinary course consistent with past practice of business and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause each of its SubsidiariesSubsidiaries to, to use their its respective commercially reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees manufacturers, distributors and business associatespartners. Without limiting Notwithstanding the generality of the foregoing and in furtherance thereofforegoing, from but subject to the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as exceptions set forth in Section 6.1 clauses (w), (x), (y) and (z) of the Company Disclosure Letterimmediately preceding sentence, the Company will shall not and will cause shall not permit any of its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable comparable governing documents;
(ii) mergeacquire (by merger, enter into consolidation, acquisition of stock or assets or otherwise) any scheme of arrangement or bid conduct agreement corporation, partnership or other similar arrangementbusiness organization or any property, rights or assets outside of the ordinary course of business for consideration that exceeds, individually or in the aggregate, $1.0 million from any other Person in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement that have been made available to Parent prior to the date of this Agreement;
(iii) except for (A) advances of expenses and trade credit, in each case in the ordinary course of business, (B) in connection with any Transaction Litigation or (C) in a manner consistent with the Company’s indemnification obligations set forth in its certificate of incorporation or bylaws, make any loans, advances or capital contributions to, or investments in, any other Person (other than any wholly owned Subsidiary of the Company);
(iv) make, authorize or incur any capital expenditure in excess of the amounts set forth in Section 5.1(a)(iv) of the Company Disclosure Letter;
(v) merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesSubsidiaries (other than with respect to any merger or consolidation among the Company and any wholly owned Subsidiary of the Company or among wholly owned Subsidiaries of the Company);
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(ivvi) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer or transfer of encumbrance of, any shares of capital stock Equity Interests of the Company (including Ordinary Shares) or any of its Subsidiaries Subsidiaries, except issuances or any Company Securities or Other Subsidiary Securities (other than dispositions of (A) the issuance Shares in respect of Ordinary Shares upon the vesting of Company Stock Options, Stock Appreciation Rights and RSUs (and dividend equivalents thereon, if applicable) outstanding prior to on the date hereof, of this Agreement under the Company Plans or (B) the issuance Shares or options or rights to acquire Shares in connection with grants or awards of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections stock based compensation made prior to the date hereof and only in accordance with such Company ESPP as Section 5.1(a)(xii) hereof;
(vii) declare, set aside, establish a record date for, or pay any dividends on or make any other distributions (whether payable in effect as cash, stock, property or a combination thereof) in respect of any of the date hereof (for the avoidance of doubtcapital stock, the Company shall not allow the commencement of other than any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a dividends from any wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceCompany;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(viiviii) reclassify, split, combine, subdivide or redeemsubdivide, purchase repurchase, redeem or otherwise acquire, directly or indirectly, any of its capital stockthe Equity Interests, Company Securities except for repurchases, redemptions or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes acquisitions in connection with the vesting exercise, vesting, settlement or forfeiture of Stock Options, Stock Appreciation Rights and RSUs under Company RSUs)Plans;
(viiiix) except in connection with the repayment of the Credit Facility at or prior to the Closing or any voluntary repayment of borrowings under the Credit Facility, (A) incur or issue any Indebtedness for borrowed money, or assume, voluntarily prepay, defease, cancel, acquire, guarantee such or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the Indebtedness of another Person any Person, (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or B) issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its SubsidiariesSubsidiaries or (C) assume, except for (A) Indebtedness guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (whicheach case, for the avoidance of doubt, shall be governed by Section 6.1(a)(xiiexcluding trade payables, capitalized lease obligations, or obligations issued or assumed as consideration for services or property, including inventory)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A1) sales Indebtedness incurred under the Credit Agreement, dated as of May 5, 2015, by and non-exclusive licenses among the Company, certain of products its Subsidiaries, as borrowers, Bank of America, N.A., as agent for the lenders and services the other lenders, guarantors and agents party thereto (the “Credit Facility”), (2) letters of credit issued pursuant to the Company and its Subsidiaries Credit Facility or otherwise issued in the ordinary course of business, (B3) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon interest rate, foreign currency and other hedging arrangements on customary commercial terms entered into in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease business and (E4) transfers among the Company and its wholly owned Subsidiaries Intercompany Indebtedness incurred in the ordinary course of business;
(xivx) grant or incur any Lien, other than (A) Permitted Encumbrances; (B) pledges or deposits by the Company or any of its Subsidiaries in the ordinary course of business under workmen’s compensation Laws, unemployment insurance Laws or similar Laws; (C) good faith deposits in connection with Contracts (other than for the payment of Indebtedness) to which the Company or one of its Subsidiaries is a party, in each case, in the ordinary course of business; (D) Liens that may be incurred or granted pursuant to or in accordance with the terms of any Indebtedness in effect as of the date hereof, securing any Indebtedness permitted pursuant to Section 5.1(a)(ix), or (E) pursuant to licenses or sublicenses of Intellectual Property granted in the ordinary course of business;
(xi) engage in any transaction, or series of similar transactions, agreements, arrangements or understandings, that is of a type that would be required to be disclosed in the Company SEC Documents pursuant to Item 404 of Regulation S-K, other than (A) as permitted pursuant to Sections 5.1(a)(xii) or 5.9, or (B) in the ordinary course of business and on terms, taken as a whole, no less favorable to the Company than terms that could have been obtained from an unaffiliated third party;
(xii) except as required pursuant to the existing terms of any Company Plan, Employment Agreement or another agreement in effect prior to the date of this Agreement, or as required by applicable Law, (A) grant, increase pay or provide agree to pay any retention, change of control, severance or termination payments or any benefits to any director, consultant current or employee former director or officer of the Company or any of its Subsidiaries, except, except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on and consistent with the date hereofCompany’s existing severance plans and policies, (B) increase in the compensation or bonus (or grant, pay or agree to pay bonuses) or other benefits to any manner the compensation, bonus current or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any former director, consultant officer or employee of the Company or any of its Subsidiaries, except (1) in the case of employees who are not executive officers of the Company, immaterial increases in compensation in the ordinary course of business consistent with past practice, (C) increase pensions or consultants welfare benefits of any current or former director, officer or employee of the Company or any of its Subsidiaries, (D) establish, adopt, terminate or materially amend any Company Plan or Employment Agreement, or enter into any new, or amend any existing, change in control arrangements or retention, retirement or similar agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries, (E) waive or materially amend any performance or vesting criteria or accelerate the vesting or payment of, or take action to fund, any compensation payable or benefits payable or provided to any current or former director, officer or employee of the Company or any of its Subsidiaries, except as expressly provided in this Agreement, (F) enter into any new, or amend any existing, employment agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice and with an annual base salary and incentive compensation opportunity not to exceed $200,000, (G) terminate any executive officer other than for cause or for performance reasons (in each case, as is not material reasonably determined by the Company) (in which case the aggregate and Company shall promptly notify Parent) or hire or promote any executive officer, or (2H) grant or make any equity awards that may be settled in the case of employees who are executive officers Shares, preferred shares, or any Equity Interest or any other securities of the CompanyCompany or any of its Subsidiaries, increases or the value of which is linked directly or indirectly, in base salary whole or in connection with part, to the Company’s usual and customary annual review in 2019price or value of any Shares, so long as any such increases are consistent with past practicepreferred shares, Equity Interests or other Company securities or Subsidiary securities;
(Cxiii) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice(A) make or accelerate change any material Tax election, (B) change the vesting Company’s or payment any of its Subsidiaries’ method of accounting for Tax purposes, (C) file any compensation amended Tax Return that would result in a material change in Tax liability, taxable income or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof)loss, (D) change settle, concede, compromise or abandon any actuarial material Tax claim or other assumptions used assessment, (E) surrender any right to calculate funding obligations a refund of material Taxes or (F) consent to any extension or waiver of the limitation period applicable to any claim or assessment with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or material Taxes;
(Exiv) except as required by GAAP, a Governmental Entity or applicable Law, establish, adopt, enter into make any material changes to accounting policies or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsprinciples;
(xv) grant a license transfer, sell, lease, license, assign, mortgage, pledge, divest or otherwise dispose of any entity or assets, product lines, rights or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries having a value in excess of $1.0 million in the aggregate, other than (A) machinery, equipment, inventory, supplies, materials and other assets (including, without limitation, Intellectual Property) in the ordinary course of business, (B) pursuant to Contracts in effect prior to the date of this Agreement that have been made available to Parent prior to the date of this Agreement or (C) pursuant to the Contracts listed in Section 5.1(a)(xv) of the Company Disclosure Letter;
(xvi) enter into, materially amend or modify, transfer, assign, license, encumber or terminate, or waive any material Intellectual term under, any Company Material Contract or Material Real Property owned by Lease or any Contract that would constitute a Company Material Contract or Material Real Property Lease if entered into prior to the date hereof (other than the expiration or renewal of any of the foregoing Contracts in accordance with its terms);
(xvii) other than in accordance with Section 5.17, waive, release, settle or compromise any pending or threatened litigation, arbitration, claim (excluding ordinary course disputes with vendors in which no litigation or arbitration commences) or action against the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse settlements or abandonment compromises of any material Intellectual Propertylitigation, arbitration, claim or any registration action where the amount paid in an individual settlement or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made compromise by the Company (and not including any amount paid by the Company’s insurance carriers or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xviithird parties) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would does not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of exceed $120,000, other than the agreements expressly contemplated by this Agreement500,000;
(xviii) enter into or amend any Contract that would require payment to agreement or give rise to arrangement with any rights (other than notice) to such other party broker or parties finder in connection with the transactions contemplated by this AgreementMerger Transactions;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such adopt a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations budget of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in for the ordinary course of business consistent with past practicefiscal year ending December 31, enter into any Contract 2016 that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in is different from the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of draft 2016 budget that the Company has made available to Parent, or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise make any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)amendment thereto; or
(xxvxx) agree, authorize or commit to do any of the foregoing actions or enter into any letter of intent (binding or non-binding) or similar agreement or arrangement with respect to any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Interim Operations. (a) Except as otherwise (xi) required by this Agreement, (ii) required by applicable Law, (yiii) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (Div) as set forth in on Section 6.1 6.1(a) of the Company Disclosure LetterSchedule, from the date of this Agreement until the Effective Time, the Company will, and will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course of business consistent with past practice and, to the extent consistent therewith, the Company shall, and shall cause its Subsidiaries to, use its and their commercially reasonable efforts to preserve their business organizations intact and to maintain existing significant business relationships (including customers and suppliers, but excluding Parent and its Affiliates) and relationships with Governmental Authorities; provided that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Except as otherwise (w) required by this Agreement, (x) required by applicable Law, (y) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth on Section 6.1(b) of the Company Disclosure Schedule, from the date of this Agreement until the Effective Time, the Company will not not, and will cause its Subsidiaries not to:
(i) amend (A) adopt, propose or otherwise change, submit to shareholder approval any change in the articles of incorporation or authorize bylaws of the Company or (B) adopt or propose to amend or otherwise any change its articles in the comparable organizational document of association, certificate any Subsidiary of incorporation, bylaws or other applicable governing documentsthe Company;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, (A) merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or (B) restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, individually or in the aggregate, any changes or restrictions on the assets, operations or business of the Company or any of its Subsidiaries;
(iii) (A) acquire (including by merger, scheme of arrangement, consolidation, consolidation or acquisition of stock equity interests or assets or otherwiseany other business combination) (x) any corporation, partnership or other business organization or (y) any assets constituting a division outside of the ordinary course of business consistent with past practice from any other Person in any transaction or business line series of related transactions or (B) make any Person loans, advances or capital contributions to any Person, other than, in the case of clause (A) and (B), for consideration in excess of $1 million in the aggregate, and, in the case of clause (B), other than (1) to the Company or any equity interests of its wholly owned Subsidiaries, (2) extensions of credit terms to customers outside the United States in the ordinary course of business consistent with past practice and (3) loans or advances made by the Company or any Person or enter into any joint venture or similar arrangementof its Subsidiaries to employees in the ordinary course of business consistent with the terms set forth in Section 6.1(b)(iii) of the Company Disclosure Schedule;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of Lien against, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any Company Securities options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or Other Subsidiary Securities (other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction among the issuance of Ordinary Shares upon Company and its wholly owned Subsidiaries or among the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereofCompany’s wholly owned Subsidiaries, (B) the issuance any issuance, sale, grant or transfer of Ordinary Shares pursuant to the exercise or settlement of Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect Equity Awards outstanding as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants this Agreement or Charter Warrants (including exercise thereof), each as in effect as of granted after the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary this Agreement not in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employeesviolation with this Agreement, in each case, in accordance with their terms or (C) the ordinary course grant of business consistent with past practiceCompany Equity Awards required to be granted by any Company Benefit Plan as in effect on the date hereof;
(viv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise with respect to any of its shares or other equity interests capital stock (except for cash dividends or other distributions paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary in of the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsCompany);
(viivi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (except for (A) any such transaction by a wholly owned Subsidiary of the Company Securities or any Other Subsidiary Securities and (other than the acquisition B) acquisitions of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes satisfaction of withholding obligations in connection with the vesting respect of Company RSUsEquity Awards), or payment of the exercise price in respect of Company Options, in each case, outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement;
(viiivii) incur any Indebtedness create, incur, assume, guarantee, endorse, suffer to exist or guarantee such Indebtedness of another Person (except otherwise be liable with respect to obligations of wholly owned Subsidiaries any Indebtedness for borrowed money or guarantees of the Company in same or any other Indebtedness incurred outside the ordinary course of business and in a manner that would not have any material Tax consequences)consistent with past practice, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than borrowings in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with under the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof credit facilities as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, hereof or under which, facilities that replace or refinance such existing credit facilities (provided that such facilities (x) can be repaid on the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties Closing Date in connection with the transactions contemplated Closing without premium or penalty, (y) do not increase the aggregate amount of the commitments thereunder relative to the facilities so replaced or refinanced, and (z) are on terms substantially consistent with or more favorable to the Company than the facilities so replaced or refinanced), (B) guarantees by this Agreement;
(xix) institute any general layoff the Company of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside obligations of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers Subsidiaries incurred in the ordinary course of business consistent with past practice, and (C) Indebtedness for borrowed money incurred for expenditures permitted by any other provision of this Section 6.1(b) and associated schedules of the Company Disclosure Schedule;
(viii) other than in accordance with the Company’s capital expenditure budget set forth on Section 6.1(b)(viii) of the Company Disclosure Schedule or as required to comply with Section 6.1(b)(xvi), incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $500,000 in the aggregate;
(ix) other than in the ordinary course of business or in connection with any matter to the extent such matter is permitted by any other clause of this Section 6.1(b), (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (bB) amend, modify in any material respect, assign or terminate any Material Contract (other than expirations of any such Contract in accordance with its terms) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries thereunder;
(x) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings for an amount in excess of $100,000 in the aggregate per annum (after taking into account insurance coverage maintained by the Company or its Subsidiaries) or which would reasonably be expected to (A) prevent, materially delay or materially impair the consummation of the Merger or any other transactions contemplated by this Agreement, (B) result in the Company or any of its Subsidiaries being subject to any criminal liability, equitable relief or admission of wrongdoing;
(xii) (A) make, change or revoke any material Tax election, (B) file any material amended Tax Return, (C) adopt or change any accounting method or accounting period for Taxes, (D) settle or compromise any material Tax liability or any material assessment, claim, dispute, audit, examination or other proceeding in respect of Taxes, (E) surrender any claim for a material refund of Taxes, (F) request or consent to a waiver of the statute of limitations or extension of time with respect to any material Tax or Tax Return, or (G) enter into any closing agreement relating to Taxes;
(xiii) sell, lease, license, encumber (including by the grant of any option thereon), lapse, abandon or otherwise dispose of any material assets or property or Intellectual Property Rights except (A) pursuant to existing contracts or commitments, (B) other than with respect to Intellectual Property Rights, in the ordinary course of business consistent with past practice and in no event in an amount exceeding $100,000 individually or $500,000 in the aggregate, (C) with respect to Intellectual Property Rights, the grant of non-exclusive licenses in the ordinary course of business consistent with past practice or expirations (D) dispositions of any such Contract in surplus, obsolete or worthless assets no longer useful to the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program operation of the Company or its Subsidiaries Subsidiaries;
(xiv) except as required by Benefit Plans as in effect as of on the date hereof, unless simultaneous with such termination(A) increase the compensation or benefits (including severance) payable or provided to the Company’s directors or employees, cancellation (B) enter into any employment, change of control, severance or lapseretention agreement with, replacement policies underwritten by insurance and reinsurance companies or grant any incentive award to, any employee of nationally recognized standing the Company, (C) establish, adopt, enter into, amend or self-insurance programsterminate any Benefit Plan or any arrangement that would have been a Benefit Plan had it been entered into prior to this Agreement, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in each caseany other way secure the payment, providing coverage equal to of compensation or greater than the coverage benefits under the terminatedany Benefit Plan, canceled (E) hire any employee or lapsed policies for substantially engage any independent contractor (who is a natural person), or (F) enter into or amend or terminate any collective bargaining, labor union, works council or similar premiums, as applicable, are in full force and effectagreement;
(xxivxv) not exercise make any rights under Section 5 or Section 6 material changes to the operation of the Company’s current articles Specific Business other than (A) changes effected by the construction of association the planned new brewing facilities at Lot 16 in Kailua-Kona (the “Kona Brewery”) or otherwise adopt or implement (B) actions contemplated by the capital expenditure budget set forth on Section 6.1(b)(viii) of the Company Disclosure Schedule;
(xvi) fail to use commercially reasonable efforts to complete the construction of the Kona Brewery on the schedule set by the Company and made available to Parent prior to the date of this Agreement; provided, for the avoidance of doubt, that this Section 6.1(b)(xvi) shall not require the Company to make expenditures that would cause any “poison pill” or other shareholder rights plan overall cost of the Kona Brewery to exceed by a material amount the aggregate anticipated costs for the Kona Brewery;
(or otherwise issue xvii) fail to comply with any Rights (as defined in obligations under the class action settlement agreement between ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ et al. and the Company’s current articles of association) , dated May 23, 2019, or similar interests or rights)fail to use reasonable best efforts to complete all actions required by such settlement agreement prior to the Closing; or
(xxvxviii) agree, authorize or commit to do any of the foregoing.
(bc) Neither Buyer nor Company Parent agrees that neither it, and shall knowingly take cause its Affiliates not to, acquire (including by merger, consolidation or permit acquisition of equity interests or assets or any other business combination) or make any investment in or enter into any joint venture with any corporation, partnership or other business organization engaged in the brewing and sale of their Subsidiaries alcohol malt beverages in the United States or any interest therein if such acquisition, investment or joint venture requires a filing under the HSR Act and would be reasonably expected to take any action that is reasonably likely to prevent prevent, materially impair or materially interfere with the consummation delay satisfaction of the transactions contemplated by this Agreementcondition described in Section 7.1(b).
(cd) The Company shall use its reasonable efforts Nothing contained in this Agreement is intended to cause give Parent or Merger Sub, directly or indirectly, the right to be delivered to Buyer at control or direct the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each operations of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended its Subsidiaries prior to the Closing Date)Effective Time. Prior to the Effective Time, certifying that each such Subsidiary does not own any U.S. real property ithe Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. (a) Except as (x) otherwise required by applicable Law, (y) otherwise Law or expressly required by this Agreement Agreement, each Seller agrees, from the date it becomes a Party hereto until the Closing, to use its best efforts to cause the Company and its Subsidiaries (solely to the extent that such Seller (directly or through its Subsidiary) (zi) otherwise set forth in Section 6.1 has a right to vote for or against the taking or not taking of any such action, either as a shareholder or through one or more representatives appointed to the board of directors or similar governing or advisory body of the Company Disclosure Letteror a Company Subsidiary, (ii) has a veto, consent or other right pursuant to the Company covenants and agrees thatShareholders Agreement, after alone or together with the date hereof and until the earlier other Sellers then party hereto, to cause any such action to be taken or not taken or (iii) with respect to shareholder or board meetings of the Effective Time Company or any Company Subsidiary, has the termination right at such meeting to speak in favor of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), against the Company shall, and shall cause its Subsidiaries to, or a Company Subsidiary taking the course of action contemplated by this Section 6.1(a) without unreasonably disrupting such meeting (clause (i) through clause (iii) “Specified Rights”)) to (w) conduct their business respective businesses in the ordinary course consistent with past practice of business, on an arms-length basis and in compliance in all material respects with Law, (x) comply with all applicable Covered Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to (y) use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, creditors, lessors, employees and business associatesassociates and keep available the services of their present employees and agents and (z) make all filings and other submissions required to be made by the Company and its Subsidiaries with the CVM, the United States Securities and Exchange Commission or other Governmental Authorities in compliance with Law and on a timely basis. Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, each Seller agrees, from the date of this Agreement it becomes a Party hereto until the earlier of Closing, (solely to the Effective Time extent that such Seller has (directly or the termination of this Agreement in accordance through its Subsidiary) Specified Rights with its terms, respect to such matter) to (except as (A) otherwise required by applicable Law Law, or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (or approved by Buyer, it being understood that if a notice requesting such approval is made to Buyer and Buyer does not respond to such notice within 5 Business Days of receipt thereof, such non-response shall be deemed approval of the matter referred to in such notice) use its best efforts to cause the Company and each Company Subsidiary not to be unreasonably withheld(in each case, delayed or conditioned) or (D) as set forth except in Section 6.1 the ordinary course of business where not material to the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:Subsidiaries):
(i) amend or otherwise change, or authorize or propose to amend any governing document of the Company or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documentsany Company Subsidiary;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, except for any such transactions among Wholly-Owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any of agreements or arrangements imposing material changes or restrictions on its Subsidiariesassets, operations or businesses;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) or of the Company Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any of its Subsidiaries options, warrants or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement rights of any new offering periods under the Company ESPP)kind to acquire any shares of such capital stock or such convertible or exchangeable securities, (C) except in connection with the Comcast Warrants Company’s employee benefits plans and stock option plans;
(iv) redeem, purchase or Charter Warrants (including exercise thereof)acquire or offer to redeem, each as in effect as purchase or acquire, directly or indirectly, any shares of the date hereof or (D) the issuance or transfer of common its capital stock or other equity interests by a wholly owned Subsidiary any securities convertible into or exchangeable for any shares of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)its capital stock;
(v) make split, combine or forgive reclassify any loans, advances outstanding shares of its capital stock (or any securities convertible into or exchangeable for any shares of its capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practicestock);
(vi) declare, set aside, make aside or pay any dividend or other distribution, distribution payable in cash, stock, property or otherwise, otherwise with respect to any shares of its shares or other equity interests capital stock (except for cash (A) as required by Law or the Company’s by-laws, the by-laws of a Company Subsidiary in existence on the date hereof or the Company Shareholders Agreement as amended through the Buyer Initial Offer Submission Date, (B) with respect to dividends paid and distributions by any direct or indirect wholly owned Wholly-Owned Subsidiary of the Company to either the Company or (C) cash dividends made pursuant to any other direct or indirect wholly owned Subsidiary and in the ordinary course of business consistent compliance with past practiceSection 2.10) or enter into any agreement with respect to the voting of its capital stock or other equity interestsstock, it being understood that the Company is not able to decide on the distribution of dividends by certain Company Subsidiaries pursuant to the shareholders agreements of such Subsidiaries set forth in Schedule 4.2(a)(ii);
(vii) reclassifymake any loans, splitadvances, combine, subdivide guarantees or redeem, purchase capital contributions to or otherwise acquire, directly or indirectly, investments in any of its capital stock, Company Securities or any Other Subsidiary Securities Person (other than the acquisition Company or any direct or indirect Wholly-Owned Subsidiary of any Ordinary Shares tendered by current or former employees or directors the Company) in order to pay Taxes excess of R$10 million in connection with the vesting of Company RSUs)aggregate;
(viii) except as set forth in Section 6.1(a)(viii) of Schedule 6.1(a), incur any Indebtedness indebtedness for borrowed money or guarantee any such Indebtedness indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries other than a direct or indirect Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesCompany), or issue or sell any debt securities securities, or warrants or other rights to acquire any debt security security, of the Company or any of its Subsidiaries, except other than for (A) Indebtedness the incurrence by the Company and its Subsidiaries of indebtedness for borrowed money under in the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness ordinary course of business in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 R$50 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed incurrence by the Company or any of and its Subsidiaries other than of indebtedness for borrowed money on the payment most favorable market terms reasonably available to the Company or such Company Subsidiary and consistent with the indebtedness being replaced, or (C) guarantees of indebtedness for borrowed money damagesof Subsidiaries of the Company;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiiiix) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, licenses, operations, rights, product lines lines, properties, businesses or businesses interests therein (including capital stock of the Company any of its subsidiaries), except for sales, leases, licenses or its Subsidiaries, other dispositions of assets with a fair market value not in excess of $50 R$5 million in any single transaction or series of related transactions, other than pursuant to Contracts in effect prior to the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of businessdate hereof;
(xivx) (Aexcept as set forth in Section 6.1(a)(x) grantof Schedule 6.1(a), increase or provide any retention, change acquire outside of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice (including by merger, exchange, consolidation, acquisition of stock or as required by agreementsassets or otherwise) any material assets, plansor any corporation, programs partnership, joint venture, limited liability company or arrangements in effect on the date hereofother business organization (or division or material assets thereof), (B) increase in any manner the compensation, bonus single transaction or benefits of, or make, grant or amend series of related transactions in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee excess of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsR$50 million;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xviixi) enter into any transaction with any Affiliate of the Company Insider (other than any employment or consulting engagement arrangements with customary and arm’s-length terms entered into in the ordinary course of its Subsidiaries business);
(xii) cancel any debts or waive any claims or rights of material value except for cancellations made or waivers granted to any Person other than an Insider in the ordinary course of business and which, in a manner that would the aggregate, are not have material;
(xiii) conclude or agree to any material Tax consequencescorrective actions, plans, consent decrees, actions or orders;
(xiv) initiate, settle, compromise or named executive officer (as defined in 17 CFR 229.402) of the Company (waive any rights relating to any material litigation or arbitration matters or other proceedings before a Governmental Authority or any immediate family member other Person (A) for amounts in excess of R$50 million or Affiliate of the foregoing(B) providing for payments by with respect to settlements, compromises or to waivers, where such settlement, compromise or waiver imposes non-monetary restrictions, obligations or penalties on the Company or any Company Subsidiary thereof in excess or would materially damage the reputation of $120,000, other than the agreements expressly contemplated by this AgreementCompany or any Company Subsidiary;
(xviiixv) enter into make any Contract that would require payment changes with respect to accounting policies or give rise to any rights (other than notice) to such other party procedures, except as required by changes in Law or parties in connection with the transactions contemplated by this AgreementBrazilian GAAP;
(xixxvi) institute except as set forth in Section 6.1(a)(xvi) of Schedule 6.1(a), (A) materially increase the compensation or benefits of any general layoff of employeesdirectors, implement any early retirement plan officers or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations employees of the Company or any of its the Company Subsidiaries, (B) enter into, modify or terminate any employment, severance or similar Contract with any directors, officers or employees of the Company or any of the Company Subsidiaries, other than employment agreements terminable at will or (C) take any action to accelerate the vesting or lapsing of restrictions or payment;
(axvii) other than new Contracts make or change any (A) material Tax election, accounting method, principle or practice from those utilized in the preparation of the latest Tax Returns , (B) settlement or final resolution of any Tax controversy or (C) amendment to any Tax Return;
(xviii) take any action that would (or fail to take any action where such failure would), individually or in the aggregate, result in or reasonably be likely to result in any of the conditions in this Agreement set forth in Article VII not being satisfied; or
(xix) enter into or propose to enter into, or modify or propose to modify, any Contract which obligates or would obligate the Company or any Company Subsidiary to take any of the actions set forth in this Section 6.1(a). It is understood and agreed that to the extent a Seller has exercised all of the Specified Rights available to it or its Subsidiary in connection with customers a matter covered by this Section 6.1(a) in furtherance of its obligation to use best efforts to cause the Company and/or its Subsidiaries to take (or, as applicable, not take) an action pursuant to this Section 6.1(a), and the Company or suppliers such Company Subsidiary nonetheless takes an action that such Seller was using its best efforts to cause not to be taken (or the Company or such Company Subsidiary nonetheless does not take an action that such Seller was using its best efforts to cause to be taken), then such Seller shall not be in breach of its obligations under this Section 6.1(a) as a result of the Company or such Company Subsidiary having taken (or, as applicable, not taken) such action.
(b) Each Seller shall use its best efforts to cause the Company and the Company Subsidiaries to, to the extent permissible by Law, and subject to acknowledgment by Buyer that it is restricted in its ability to trade Shares of the Company and its Subsidiaries, promptly notify Buyer of (i) any emergency involving the Company or any Company Subsidiary, (ii) any material deviation by the Company or any Company Subsidiary from the ordinary course of business consistent with past practice, enter into or any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than material change in the ordinary course operation of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program properties of the Company or its Subsidiaries in effect as of the date hereofany Company Subsidiary and (iii) any material claims, unless simultaneous with such terminationcomplaints, cancellation investigations or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan hearings (or otherwise issue communications indicating that the same may be contemplated) in any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do case initiated by any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of Governmental Authority regarding the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the or any Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iSubsidiary.
Appears in 1 contract
Sources: Share Purchase Agreement (State Grid Corp of China)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by Between the date of this Agreement and the Closing or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (Article IX, except as set forth on Schedule 7.1 or as expressly required by this Agreement, unless Buyer shall otherwise approve has previously consented in writing, such approval not to be unreasonably withheld, delayed writing or conditioned)as required by applicable Law, the Company shall, and shall cause will (i) conduct its Subsidiaries to, conduct their business operations in the ordinary course consistent with past practice Ordinary Course of Business and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to (ii) use their respective commercially reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill present relationships with Governmental Entities, customers, suppliers, co-packers, vendors, distributors, employees and lenders having business associatesdealings with the Company (it being understood that, for the avoidance of doubt, prior to the Effective Time, the Company may use all available cash to repay any Company Debt). Without limiting the generality of the foregoing and in furtherance thereofforegoing, from between the date of this Agreement until and the Closing or the earlier of the Effective Time or the termination of this Agreement in accordance with its termsArticle IX, except as (A) required by applicable Law set forth on Schedule 7.1 or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) unless Buyer may approve has previously consented in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other required by applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubtLaw, the Company shall not allow do any of the commencement following:
(a) incur any Company Debt or issue any long-term debt securities or assume, guarantee or endorse such obligations of any new offering periods other Person, except for indebtedness incurred in the Ordinary Course of Business under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as lines of credit existing on the date hereof or (D) hereof, which will be paid off at the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Closing and included in Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)Debt;
(vi) make except in the Ordinary Course of Business, sell, transfer, assign, lease, license, abandon or forgive dispose of, any loansmaterial property or assets, advances (ii) mortgage or capital contributions encumber, or subject to any Lien, any property or assets other than Permitted Liens incurred in the Ordinary Course of Business, or (iii) cancel any debts owed to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of claims held by the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceCompany;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xiic) other than in the ordinary course Ordinary Course of business Business, enter into, amend, modify, renew, cancel or terminate any Material Contract; provided that the Company shall be permitted to extend, renew or replace any such Material Contract with one or more Contracts on substantially similar terms;
(d) enter into, adopt, amend, terminate, or increase the amount benefits or compensation (including any bonus) due under any Employee Plan or other benefit or compensation plan, program, Contract, or arrangement, including any agreement relating to the compensation or severance of any employee of the Company, except to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiiie) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject make any change to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019accounting methods, so long as any such increases are consistent with past practice, (C) except as required by Law principles or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedpractices, except as may be required by GAAP or (E) except as required by changes in Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xvf) grant a license make or change any material Tax election, change an annual accounting period, or adopt or change any accounting method;
(g) make any amendment (whether by merger, consolidation or otherwise) to the Company’s Organizational Documents;
(h) issue, redeem, pledge, deliver, grant, sell, or otherwise dispose of any Equity Interests or options, warrants, calls, subscriptions or other rights to purchase or redeem any Equity Interests of the Company, or issue or declare any non-cash dividends or distributions with respect thereto, or split, combine, reclassify or subdivide the Equity Interests of the Company, or otherwise change the capital structure of the Company;
(i) directly or indirectly, acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all of the assets or otherwise acquire any assets or business of, or acquire any equity interests in, any Person;
(j) (i) initiate any Action or (ii) enter into any settlements or compromises of any Actions, if such settlements or compromises would involve (x) the imposition of any material Intellectual Property owned non-monetary restrictions upon the Company, or (y) any payment in excess of $100,000;
(k) allow any material insurance policies to lapse, without renewal or replacement on commercially reasonable terms;
(l) make any material loans, advances or capital contributions to, or material investments in, any other Person;
(m) make capital expenditures in excess of $500,000, in the aggregate;
(n) dispose of (whether by transfer, merger, consolidation, disposition of stock or assets or otherwise), directly or indirectly, any material assets, properties or businesses, other than (i) the sale of inventory in the Ordinary Course of Business or (ii) the sale or disposal of obsolete or excess equipment in the Ordinary Course of Business;
(o) create any Subsidiary of the Company;
(p) (i) adopt a plan of agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization or (ii) file a bankruptcy petition under any provisions of federal or state bankruptcy law on behalf of the Company or consent to the filing of any bankruptcy petition against the Company under any similar law;
(q) materially delay, decrease, or increase the rate of its Subsidiaries promotional or marketing expenditures, other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxvr) agreeauthorize, authorize agree or commit to do take any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period actions described in the foregoing sub-clauses of this Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of 7.1. Nothing contained in this Section 897(c) of the Code and which sets forth 7.1 or elsewhere in this Agreement shall preclude the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification numberin its sole discretion, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended making cash distributions to Seller prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iEffective Time using available cash on hand and without otherwise violating this Section 7.1.
Appears in 1 contract
Sources: Securities Purchase Agreement (Hormel Foods Corp /De/)
Interim Operations. (a) Except as otherwise (w) required by this Agreement, (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (Dz) as set forth in on Section 6.1 6.1(a) of the Company Disclosure LetterSchedule, after the date of this Agreement and prior to the Effective Time, the Company will, and will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course and, to the extent consistent therewith, the Company shall, and shall cause its Subsidiaries to, use its and their commercially reasonable efforts to preserve their business organizations intact (including the service of key employees) and maintain existing relations with key customers, suppliers and other Persons with whom the Company and its Subsidiaries have significant business relationships; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision of Section 6.1(b).
(b) Except as otherwise (w) required by this Agreement, (x) required by applicable Law, (y) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth on Section 6.1(b) of the Company Disclosure Schedule, from the date of this Agreement until the Effective Time, the Company will not not, and will cause its Subsidiaries not to:
(i) amend (x) adopt any change in the certificate of incorporation or otherwise changebylaws of the Company, or authorize (y) adopt any change in the comparable organizational document of any Subsidiary of the Company that, in the case of this clause (y), would adversely affect the consummation of the Merger or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or the other applicable governing documentstransactions contemplated by this Agreement;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries, in each case other than any such transactions among any wholly-owned Subsidiaries of the Company which would not reasonably be expected to result in a restriction or reduction in any participation exemption available under non-U.S. Law with respect to any such Subsidiaries;
(iii) (A) acquire or license tangible or intangible assets outside of the ordinary course of business or (B) make any capital contributions to or investments in any Person, in the case of clauses (A) and (B), other than any such transactions (I) among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries or (II) for amounts that do not exceed $200,000,000 in the aggregate in any fiscal year of the Company (in the case of clause (A), determined based upon the greater of the fair market value of the assets so acquired by merger, scheme the Company and its Subsidiaries or the fair market value of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementthe consideration paid by the Company and its Subsidiaries);
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of encumber any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any Company Securities options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or Other Subsidiary Securities (other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction among the issuance of Ordinary Shares upon Company and its wholly-owned Subsidiaries or among the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, Company’s wholly-owned Subsidiaries or (B) the issuance any issuance, sale, grant or transfer of Ordinary Shares pursuant to the settlement of Company ESPPOptions, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect SARs, Company RSUs, Company PSUs or Company Awards outstanding as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants this Agreement or Charter Warrants (including exercise thereof), each as in effect as of granted after the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary this Agreement not in violation of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)this Agreement;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in guarantees outside the ordinary course of business and in a manner that would not have any material Tax consequences) business, other than extending trade credit to customers any such transactions (I) among the Company and advancing business expenses to employeesits wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, (II) permitted under Section 6.1(b)(viii) or (III) not in each case, excess of $25,000,000 in the ordinary course aggregate in any fiscal year of business consistent with past practicethe Company;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash (A) dividends or other distributions paid by any direct or indirect wholly wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly wholly-owned Subsidiary of the Company and except for any quarterly dividends to stockholders of the Company by the Company in the ordinary course of business an amount not to exceed $0.54 per Share, in each case declared and paid at such times and in such amounts as is consistent with past practice) or enter into any agreement with respect historical practice over the most recent fiscal year ended prior to the voting date of its capital stock this Agreement and (B) dividend equivalents paid in respect of Company RSUs, Company PSUs or other equity interestsCompany Awards outstanding as of the date of this Agreement or granted thereafter in accordance with the terms of this Agreement, in each case, in accordance with their terms);
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stockstock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (except for (A) any such transaction by a wholly-owned Subsidiary of the Company and (B) acquisitions of Shares in satisfaction of withholding obligations or payment of the exercise price in respect of Company Options, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of SARs, Company RSUs, Company PSUs or Company Awards outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(viii) incur any Indebtedness, except for (A) intercompany Indebtedness among the Company and its wholly-owned Subsidiaries or guarantee such among the Company’s wholly-owned Subsidiaries, (B) Indebtedness not to exceed $1,500,000,000 in aggregate principal amount incurred to replace, renew, extend, refinance or refund any existing Indebtedness of another Person the Company, which Indebtedness is (except I) prepayable without premium or penalty (other than customary LIBOR breakage amounts) or (II) on terms that (x) taken as a whole, are substantially consistent with respect or not more restrictive than those contained in the Indebtedness being replaced, renewed, extended, refinanced or refunded and (y) permit parent guarantees and parent company reporting to obligations be substituted for Company reporting, (C) Indebtedness under commercial paper arrangements, revolving credit facilities and other working capital or liquidity facilities not to exceed $3,500,000,000 in aggregate principal amount at any time outstanding pursuant to this subclause (C), (D) guarantees of wholly Indebtedness of the Company or its wholly-owned Subsidiaries outstanding on the date hereof or otherwise incurred in compliance with this Section 6.1(b), (E) Indebtedness of the Subsidiaries of the Company organized under the laws of a country other than the United States in an aggregate principal amount (for all such Subsidiaries, taken together) not to exceed $500,000,000 at any time outstanding pursuant to this subclause (E), (F) Indebtedness pursuant to receivables financing or factoring arrangements (but in any event for which the factoring balance does not exceed $2,400,000,000 at any time outstanding (it being understood that this clause (viii)(F) and clause (xv)(D), taken together, permit a factoring balance that does not exceed $2,400,000,000)), (G) Indebtedness pursuant to capitalized leases (1) entered into in the ordinary course of business or (2) entered into in connection with the Arizona Greenhouse project, (H) Indebtedness in respect of swaps, options, derivatives and other hedging Contracts entered into in a manner the ordinary course of business, (I) Indebtedness under letters of credit, bank guarantee arrangements and any related reimbursement obligations entered into in the ordinary course of business or (J) Indebtedness not to exceed $250,000,000 in aggregate principal amount that would not have any material Tax consequences), or issue or sell any debt securities or warrants or may be incurred other rights to acquire any debt security of the Company or any of its Subsidiaries, except for than in accordance with subclauses (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, through (BI) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 millioninclusive;
(ix) shall not (A) make or authorize any payment of, or make any accrual or commitment for, capital expenditures in excess of $40 million that, in the aggregate, except for exceed by more than 5%, or (B) fail to make payments of capital expenditures that, in the aggregate, are no less than 90%, in the case of each of clauses (A) expenditures set forth in and (B), of the current capital forecast aggregate amounts set forth in Section 6.1(a)(ix6.1(b)(ix) of the Company Disclosure Letter Schedule (the “Capex Budget”) for the respective periods set forth therein, except with respect to acquisitions or licenses of tangible or intangible assets permitted by clause (BII) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwiseof Section 6.1(b)(iii);
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or in connection with any matter to the extent required such matter is expressly permitted by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount other clause of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lienthis Section 6.1(b), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (bB) terminate or waive, or materially amend, modify or supplement, any rights or interests pursuant to or in any Material Contract, other than expirations of any such Contract in accordance with the terms of such Contract;
(xi) enter into any Contract that (x) materially restricts the ability of the Company or any of its Subsidiaries (or, following the consummation of the Merger, would materially restrict the ability of the Surviving Corporation or its Affiliates) to compete in any business or geographic area, or (y) grants “most favored nation” status that, following the consummation of the Merger, would be material to the Company or the crop science business of Parent and would apply to Parent, the Company or any of their respective Subsidiaries;
(xii) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Entity or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(xiii) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings (other than any audit or other proceeding in respect of Taxes), in each case made or pending against the Company or any of its Subsidiaries (and not including any settlement with respect to matters in which any of them is a plaintiff) for an amount in excess of $150,000,000 in the aggregate in any fiscal year of the Company or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that, in the aggregate, would materially restrict the future activity or conduct of Parent, the Company or any of their respective Subsidiaries, other than with respect to monetary settlements only, settlements or compromises of any action, suit, claim, hearing, arbitration, investigation or other proceedings to the extent reflected or reserved against in the balance sheet (or the notes thereto) of the Company included in the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2016 for an amount not in excess of the amount so reflected or reserved;
(A) file or amend any material Tax Return (other than in the ordinary course of business), (B) settle or compromise any material Tax liability for an amount materially in excess of the amount reserved or accrued on the Company’s most recent consolidated balance sheet included in the Company Reports, (C) make, change or revoke any material Tax election (other than an entity classification election under Treasury Regulation Section 301.7701-3 in respect of any Subsidiary that is not material), (D) change any material method of Tax accounting or (E) terminate, consent to the termination of or agree to any material modification of any ruling or agreement listed in Section 5.1(n)(iii) of the Company Disclosure Schedule (or that would be necessary to be listed therein in order to prevent a breach of Section 5.1(n)(iii)) if such action is reasonably expected to result in a material increase in the Tax liability of the Company or any of its Subsidiaries;
(xv) transfer, sell, lease, divest, cancel or otherwise dispose of any assets (other than Intellectual Property Rights, Germplasm, or Biological Materials) of the Company or any of its Subsidiaries, except for transfers, sales, leases, divestments, cancellations or other dispositions (A) of products and services in the ordinary course of business, (B) of obsolete inventory and equipment in the ordinary course of business, (C) of tangible assets having a net present value not in excess of $35,000,000 individually or $60,000,000 in the aggregate in any fiscal year of the Company (it being understood that the net present value of such assets shall count against the thresholds set forth in Section 6.1(b)(xvi)(IV)), (D) of receivables, invoices and related rights and assets pursuant to receivables financing or factoring arrangements (but in any event for which the factoring balance does not exceed $2,400,000,000 at any time outstanding (it being understood that this clause (xv)(D) and clause (viii)(F), taken together, permit a factoring balance that does not exceed $2,400,000,000)) and (E) among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(xvi) (A) transfer, sell, license, mortgage, pledge, encumber, divest or otherwise dispose of any Intellectual Property Rights, Germplasm or Biological Materials or (B) except in the ordinary course of business, grant, extend, amend, fail to diligently prosecute or cancel, abandon or allow to lapse (in each case, except as required in the diligent prosecution of Registered Intellectual Property), waive or modify, as applicable, any rights in or to material Owned Intellectual Property, Germplasm or Biological Materials, except, in the case of each of clauses (A) and (B), for (I) non-exclusive licenses of Intellectual Property Rights, Germplasm or Biological Materials in the ordinary course of business, (II) exclusive licenses of Intellectual Property Rights, Germplasm or Biological Materials in the ordinary course of business, provided such licenses are not exclusive in all fields of use, and provided, further, that such licenses retain the Company’s rights to offer or develop products or services that the Company is offering or developing or planning to offer or develop, as the case may be, at any time from the date hereof and through the Effective Time, (III) transfers, sales, licenses, mortgages, pledges, encumbrances, divestments and other dispositions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (IV) transfers, sales, licenses, divestments or other dispositions of Intellectual Property Rights, Germplasm or Biological Materials having a net present value not in excess of $35,000,000 individually or $60,000,000 in the aggregate in any fiscal year of the Company (it being understood that the net present value of such Intellectual Property Rights, Germplasm or Biological Materials shall count against the thresholds set forth in Section 6.1(b)(xv)(C));
(xvii) except as required by Contracts or Benefit Plans, (A) terminate, adopt, establish, enter into, materially amend or renew (or communicate any intention to take such action) any material Benefit Plan, (B) increase in any manner the compensation, benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants who are natural persons of the Company or its Subsidiaries, other than routine annual salary or base pay increases (and corresponding increases in bonus or incentive payments to the extent determined by reference to salary or base pay) for non-executive officer employees, in the ordinary course of business consistent with past practice practice, (C) pay any bonus or expirations of incentive compensation under any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such ContractBenefit Plan, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in payments based on actual performance for completed performance periods, (D) accelerate the ordinary course vesting of businessor lapsing of restrictions, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of amend the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property ivesting require
Appears in 1 contract
Sources: Merger Agreement (Monsanto Co /New/)
Interim Operations. Except (aA) Except as Parent shall otherwise permit (x) required by applicable Lawwhich permission shall not be unreasonably withheld or delayed), (yB) otherwise expressly as required by this Agreement in order for it to comply with any Law or any contract existing on the date hereof to which the Company or any of its Subsidiaries is bound, (zC) otherwise as set forth in Section 6.1 3.1 of the Company Disclosure Letter, or (D) as otherwise contemplated by this Agreement (including the Recapitalization), the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until prior to the earlier Merger Closing:
(a) the business of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business shall be conducted in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, the Company shall and shall cause its Subsidiaries, Subsidiaries to use their respective all reasonable best commercial efforts to preserve their material its business organizations organization intact and maintain in all material respects its existing relations and goodwill with Governmental Entities, customers, suppliers, employees distributors, creditors, lessors, officers and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documentsemployees;
(iib) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
it shall not (iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(ivi) issue, sell, pledge pledge, dispose of or encumber any share capital owned by it in any of its Subsidiaries; (ii) adopt any change to the Company’s and its Subsidiaries’ articles of incorporation or bylaws; (iii) amend the Shareholders Agreement, (iv) split, consolidate, combine or reclassify its issued and outstanding share capital; (v) declare, set aside or pay any dividend payable in cash, shares or property in respect of any share capital other than dividends from its direct or indirect wholly owned Subsidiaries and other than regular quarterly cash dividends; or (vi) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any share capital or any securities convertible into or exchangeable or exercisable for any share capital;
(c) other than in connection with (i) exercises of Company Warrants or (ii) issuances of shares of Company Common Stock pursuant to options and other share-based awards outstanding on the date hereof under the Company Stock Option Plans or any other Company Benefit Plan, neither it nor any of its Subsidiaries shall (A) issue, sell, pledge, dispose of or encumber any shares of, or subject to any Lien (whether through the issuance securities convertible into or granting of exchangeable or exercisable for, or options, warrants, commitmentscalls, subscriptions, commitments or rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares kind to acquire, any share capital of capital stock of the Company (including Ordinary Shares) any class or any of its Subsidiaries other property or any Company Securities or Other Subsidiary Securities assets; (B) other than (Ai) in the issuance ordinary and usual course of Ordinary Shares upon business, (ii) dispositions of obsolete assets that are not material to either of the vesting Company’s lines of Company RSUs business, and (and dividend equivalents thereon, if applicableiii) outstanding Permitted Asset Sales made pursuant to agreements entered into prior to the date hereof, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement including share capital of any new offering periods under the Company ESPP), of its Subsidiaries) or incur or modify any material indebtedness or other liability; or (C) make or authorize or commit for any capital expenditures other than in connection the ordinary and usual course of business consistent with the Comcast Warrants or Charter Warrants (including exercise thereof), each Company’s budgeted capital expenditures as set forth under “Capital Expenditure Budget” in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary Section 3.1 of the Company Disclosure Letter (it being understood that the timing of budgeted expenditures may be accelerated or decelerated by the Company), and other than capital expenditures in excess of those reflected in such budget to the extent required in order for the R&B Telephone Company and NTELOS Telephone Inc. to continue to meet their public services obligations to provide reasonable service, or, by any means, except to the extent required by existing contractual commitments, make any significant acquisition of, or another wholly owned Subsidiary investment in, assets or shares of or any other interest in, any other Person;
(d) neither it shall nor shall it cause its Subsidiaries to merge or consolidate with any other Person;
(e) neither it shall nor shall it cause its Subsidiaries to terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Company Benefit Plans or increase the salary, wage, bonus or other compensation of any employees, except amendments required by Law or otherwise necessary to preserve the intended benefits under such Company Benefit Plans and salary increases for employees occurring in the ordinary and usual course of business and in a manner that would not have any material Tax consequences)business;
(vf) make or forgive any loansneither it shall nor shall it cause its Subsidiaries to alter its general practices and policies relating to the payment and collection, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary as the case may be, of the Company in the ordinary course of business accounts payable and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employeesaccounts receivable, in each case, in any material respect;
(g) neither it shall nor shall it cause its Subsidiaries to settle or compromise any material claims or litigation or modify, amend or terminate any of its Designated Contracts or waive, release or assign any material rights or claims, except for settlements entered into as set forth in Section 3.1 of the Company Disclosure Schedule, provided that any such settlement shall constitute a full and complete release of related liabilities or obligations by the Company or its applicable Subsidiary and shall not in any manner place material restrictions on the operations of the Company or such Subsidiary;
(h) it shall use its reasonable commercial efforts to prevent any insurance policy of the Company or its Subsidiaries from being cancelled or terminated prior to the scheduled end of its term;
(i) neither it shall nor shall it cause its Subsidiaries to enter into any lease or amend an existing lease to increase the obligations under such existing lease (whether of real or personal property) providing for annual rentals of (1) $1,000,000 or more in the aggregate per year or (2) $500,000 per year for a period of three or more years, and, in each case, is not terminable by the Company or its Subsidiaries on 90 days’ or less notice without penalty;
(j) neither it shall nor shall it cause its Subsidiaries to enter into any agreement for the purchase of materials, supplies, goods, services, equipment or other assets that requires either (1) annual payments by the Company and the Subsidiaries of $750,000 or more or (2) aggregate future payments by the Company and the Subsidiaries of $5,000,000 or more, and, in each case is not terminable by the Company or its Subsidiaries on 90 days’ or less notice without penalty;
(k) neither it shall nor shall it cause its Subsidiaries to enter into any sales, distribution or other similar agreement providing for the sale by the Company or any Subsidiary of materials, supplies, goods, services, equipment or other assets (but not including purchases made under tariff) that requires either (1) annual payments to the Company and the Subsidiaries of $500,000 or more or (2) aggregate future payments over the next two years to the Company and the Subsidiaries of $2,500,000 or more, and, in each case is not terminable by the Company or its Subsidiaries on 90 days’ or less notice without penalty;
(l) neither it shall nor shall it cause its Subsidiaries to enter into any partnership, joint venture or other similar agreement or arrangement, except for any IRUs, co-location agreement or other ordinary course commercial business relationships in the ordinary course of business consistent with past practice;
(vim) declareneither it shall nor shall it cause its Subsidiaries to incur, set aside, make assume or pay guarantee any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except indebtedness for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities borrowed money (other than the acquisition of any Ordinary Shares tendered by current capital leases or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xiiDebt Financing) other than in the ordinary course of business or to the extent required by Lawand in amounts and on terms consistent with past practices, make but in any material Tax election, file any material amended income Tax Return, settle or compromise any material amount event not exceeding a net total of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax$2,000,000;
(xiiin) transfer, sell, lease, license, mortgage, pledge neither it shall nor shall it cause its Subsidiaries to create or otherwise encumber or subject to a incur any material Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (ALiens) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries asset other than in the ordinary course of business consistent with past practicepractices or as otherwise permitted by the Debt Financing;
(xvio) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto neither it shall nor shall it cause its Subsidiaries to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii1) enter into any transaction employment, deferred compensation, severance, retirement or other similar agreement entered into with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) director or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member amendment to any such existing agreement), (2) offer of any new severance or Affiliate termination protection to any director or officer of the foregoingCompany, or (3) providing for payments by make or authorize a change in compensation or other benefits payable to any director or officer of the Company pursuant to any severance or retirement plans or policies thereof; provided, however, that the Company and its Subsidiaries shall be permitted to enter into such arrangements with any new non-executive officer or any Subsidiary thereof non-executive officer that has been promoted or had a change in excess of $120,000, other than the agreements expressly contemplated by this Agreementrole or responsibilities;
(xviiip) enter into any Contract that would require payment neither it shall nor shall it cause its Subsidiaries to materially change their accounting principles, practices or give rise to any rights (other than notice) to such other party methods, except as required by GAAP or parties in connection with the transactions contemplated by this AgreementLaw;
(xixq) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of neither it shall nor shall it cause its existing business or renew Subsidiaries to authorize or enter into any non-compete or exclusivity an agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.; and
(br) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable best efforts to cause consummate the Permitted Asset Sales pursuant to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property itheir terms.
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees that, after from the date hereof and execution of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve consent in writing, writing (such approval consent not to be unreasonably withheld, delayed conditioned or conditioneddelayed)), and except (x) as otherwise expressly required, contemplated or permitted by this Agreement, (y) as set forth in Section 7.1(a) of the Company Disclosure Letter or (z) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct their its business in the ordinary course of business consistent with past practice and in compliance with all applicable Laws material respects and, to the extent consistent therewith, it shall, and shall cause each of its SubsidiariesSubsidiaries to, to use their respective its reasonable best efforts to preserve their material its business organizations substantially intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business associatesassociates and others having material business dealings with it and keep available the services of its present employees and agents. Without limiting the generality of the foregoing limiting, and in furtherance thereofof, the foregoing, from the date execution of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except (1) as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required required, contemplated or permitted by this Agreement, (C2) Buyer may approve as set forth in Section 7.1(a) of the Company Disclosure Letter or (3) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), the Company shall not, and shall cause each of its Subsidiaries not to (unless Parent shall otherwise consent in writing (such approval consent not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:delayed)):
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, incorporation or bylaws or other applicable governing comparable organizational documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesPerson;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfertransfer or encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer or transfer of encumbrance of, any shares of Company Shares or other capital stock or other securities of the Company (including Ordinary Shares) or any such Subsidiary or securities convertible or exchangeable into or exercisable for Company Shares or other capital stock or securities of its Subsidiaries the Company or any Company Securities or Other Subsidiary Securities (such Subsidiary, other than (Ax) the issuance issuances of Ordinary Company Shares upon the exercise, vesting or settlement of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to Equity Awards and/or the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect Warrant outstanding as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection accordance with the Comcast Warrants or Charter Warrants (including exercise thereof), each their terms as in effect as of on the date hereof or and (Dy) the issuance or transfer grants of common stock or other equity interests by a wholly owned Subsidiary Company Equity Awards in respect of the up to 11,000,000 Company to the Company or another wholly owned Subsidiary Shares, in the ordinary course of business and in a manner that would not have any material Tax consequences)aggregate;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(viiv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company Shares or to any other direct or indirect wholly owned Subsidiary in the ordinary course securities of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestssuch Subsidiary;
(viiv) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any of its capital stock, Parent Shares or securities convertible or exchangeable into or exercisable for Company Securities or any Other Subsidiary Securities Shares (other than the acquisition withholding of any Ordinary Shares tendered by current shares to satisfy withholding Tax obligations or former employees or directors in order to pay Taxes the exercise price in connection with the exercise, vesting or settlement of outstanding Company RSUs)Equity Awards and/or the Company Warrant) or securities of such Subsidiary;
(vi) incur any Indebtedness with an aggregate principal amount in excess of $40,000,000 or guarantee the Indebtedness of any other Person, or make any loans, capital contributions or advances to any Person other than to any wholly owned Subsidiary;
(vii) amend, modify, terminate or cancel a material insurance policy covering the Company or any of its Subsidiaries in effect as of the date hereof;
(viii) incur make any Indebtedness material changes in financial accounting methods, principles or guarantee such Indebtedness of another Person practices except as may be required by GAAP or by any Governmental Entity or quasi-governmental authority (except including the Financial Accounting Standards Board or any similar organization);
(A) make (other than consistent with past practice), change or revoke any material Tax election, (B) file any amended Tax Return with respect to obligations any material Tax, (C) adopt (other than consistent with past practice) or change any method of wholly owned Subsidiaries of Tax accounting or Tax accounting period, or (D) enter into any closing agreement relating to any material Tax;
(x) other than Transaction Litigation which is governed by Section 7.13(b), settle or compromise any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than (A) for an amount not to exceed $10,000,000 in the ordinary course of business aggregate and in a manner (B) that would do not have impose any material Tax consequences), restrictions on the operations or issue or sell any debt securities or warrants or other rights to acquire any debt security businesses of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (whichequitable relief on, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) admission of the Company included in the Company Reports filed prior to the date hereof andwrongdoing by, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries; or
(xi) agree, exceptcommit, in the case of employees who are not executive officers arrange, authorize, resolve or enter into any understanding to do any of the Companyforegoing.
(b) Parent covenants and agrees that, in from the ordinary course execution of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on this Agreement until the date hereof, Effective Time (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or any of its Subsidiariesdelayed)), except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Groupotherwise expressly required, Inc. Pension Plan as contemplated on the date hereof or permitted by this Agreement, (y) pursuant to as set forth in Section 7.1(b) of the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP Parent Disclosure Letter or (Ez) except as required by Law, establish, adopt, enter into or amend applicable Laws (including any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything Law issued in response to the contrary in the foregoing clauses COVID-19 (A)-(Eor SARS-CoV-2) virus), the Company shall notParent shall, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any cause each of its Subsidiaries other than in the ordinary course of to, use its and their reasonable best efforts to conduct its business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in all material respects and, to the extent consistent therewith, Parent shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to preserve its business organizations substantially intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business associates and others having material business dealings with it and keep available the services of its present employees and agents. Without limiting, and in furtherance of, the foregoing, from the execution of this Agreement until the Effective Time, except (1) as otherwise expressly required, contemplated or permitted by this Agreement, (2) as set forth in Section 7.1(b) of the Parent Disclosure Letter or (3) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), Parent shall not, and shall cause each of its Subsidiaries not to (unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)):
(i) adopt or propose any change in its certificate of incorporation or bylaws or comparable organizational documents;
(ii) merge or consolidate with any other Person;
(iii) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any Parent Shares or other capital stock or other securities of Parent or such Subsidiary or securities convertible or exchangeable into or exercisable for Parent Shares or other capital stock or securities of Parent or such Subsidiary, other than issuances of Parent Shares upon the exercise, vesting or settlement of Parent Equity Awards outstanding as of the date hereof in accordance with their terms as in effect on the terms date hereof;
(iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of the Parent Shares or securities of such ContractSubsidiary;
(v) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any Parent Shares or securities convertible or exchangeable into or exercisable for Parent Shares (other than the withholding of shares to satisfy withholding Tax obligations or the exercise price in connection with the exercise, vesting or settlement of outstanding Parent Equity Awards) or securities of such Subsidiary;
(vi) incur any Indebtedness with an aggregate principal amount in excess of $40,000,000 or guarantee the Indebtedness of any other Person, or make any loans, capital contributions or advances to any Person other than to any wholly owned Subsidiary;
(vii) amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien terminate or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (covering Parent or reinsurance policy) or self-insurance program any of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxivviii) make any material changes in financial accounting methods, principles or practices except as may be required by GAAP or by any Governmental Entity or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(ix) (A) make (other than consistent with past practice), change or revoke any material Tax election, (B) file any amended Tax Return with respect to any material Tax, (C) adopt (other than consistent with past practice) or change any method of Tax accounting or Tax accounting period, or (D) enter into any closing agreement relating to any material Tax;
(x) other than Transaction Litigation which is governed by Section 7.13(b), settle or compromise any pending or threatened proceeding involving Parent or any of its Subsidiaries, other than (A) for an amount not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined to exceed $10,000,000 in the Company’s current articles aggregate and (B) that do not impose any material restrictions on the operations or businesses of association) Parent or similar interests any of its Subsidiaries, or rights)any equitable relief on, or the admission of wrongdoing by, Parent or any of its Subsidiaries; or
(xxvxi) agree, authorize commit, arrange, authorize, resolve or commit enter into any understanding to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts Nothing contained in this Agreement is intended to cause give Parent, directly or indirectly, the right to be delivered to Buyer at control or direct the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each operations of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) or any of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended its Subsidiaries prior to the Closing Date)Effective Time, certifying that each such Subsidiary does not own and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct the operations of Parent or any U.S. real property iof its Subsidiaries.
Appears in 1 contract
Sources: Merger Agreement (NantKwest, Inc.)
Interim Operations. (a) Except as (x) required by applicable LawThe Company shall, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 and shall cause each of the Company Disclosure Letterits Subsidiaries to, the Company covenants from and agrees that, after the date hereof and of this Agreement until the earlier of the Effective Time or and the termination of this Agreement in accordance with its terms (pursuant to Article VIII, unless Buyer Parent shall otherwise approve in writing, such approval not and except as otherwise expressly required by this Agreement, required in order to be unreasonably withheldcomply with applicable Law or required in order to comply with COVID-19 Measures or deemed advisable by the Company, delayed acting reasonably, in connection with the termination or conditioned)modification of COVID-19 Measures, the Company shall, and shall cause use commercially reasonable efforts to conduct its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and Ordinary Course of Business, in compliance with all applicable Laws material respects, and, to the extent consistent therewith, it shall, shall use and shall cause each of its Subsidiaries, Subsidiaries to use their respective commercially reasonable best efforts to preserve their material business organizations intact maintain its and maintain in all material respects existing its Subsidiaries’ relations and goodwill with Governmental Entities, customers, suppliers, employees distributors, and business associatesemployees. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing sentence, from the date of this Agreement until the earlier of the Effective Time or and the termination of this Agreement in accordance with its termspursuant to Article VIII, except (i) as otherwise expressly required (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (B) by any Governmental Entity, (C) Buyer may approve to comply with (1) applicable Law, or (2) the terms of any Material Contract binding on the Company or any of its Subsidiaries in effect prior to the date of this Agreement, (ii) as approved in writing by Parent (such approval not to be unreasonably withheldconditioned, delayed withheld or conditioneddelayed) or (Diii) as set forth in the corresponding subsection of Section 6.1 6.01(a) of the Company Disclosure LetterSchedule, the Company will shall not and will shall cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise adopt any change in its articles of association, certificate of incorporation, bylaws or other applicable governing documentsOrganizational Documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company or transactions permitted by Section 6.01(a)(iii), or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(iii) (A) acquire by merger or consolidation with, or (B) without the prior written consent of Parent (not to be unreasonably conditioned, withheld or delayed), purchase any, all or substantially all of the assets of, any corporation, partnership, association, joint venture or other business organization or division thereof;
(iv) transfer, sell, lease, license, divest, cancel, abandon, allow to lapse or expire, or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrances) upon, any material properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses of the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of including capital stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person of its Subsidiaries, except in connection with (A) sales of obsolete assets (not including Intellectual Property Rights), (B) sales, leases, or enter other dispositions of inventory, rental fleet or other goods (not including Intellectual Property Rights) in the Ordinary Course of Business and (C) non-exclusive licenses of Intellectual Property Rights entered into any joint venture or similar arrangementin the Ordinary Course of Business;
(ivv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or authorize otherwise enter into any Contract or other agreement, understanding or arrangement with respect to the issuancevoting of, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereonincluding, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (CShares) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common capital stock or other equity interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than the issuance of shares of such capital stock, other equity securities, or convertible or exchangeable securities (A) by a wholly owned Wholly Owned Subsidiary of the Company to the Company or another wholly owned Wholly Owned Subsidiary of the Company or (B) in respect of Company Equity Awards outstanding as of the ordinary course date of business this Agreement in accordance with their terms and the applicable Stock Plan in a manner that would not have any material Tax consequenceseffect on the Capitalization Date);
(vvi) make any loans or forgive any loans, advances or capital contributions of money to or investments in any Person (other than the Company and its Subsidiaries), except for advances to any direct employees or indirect wholly owned Subsidiary officers of the Company or any of its Subsidiaries pursuant to any advancement obligations under the Company’s or any Subsidiary’s Organizational Documents or indemnification agreement in effect on the date hereof or for expenses incurred in the ordinary course Ordinary Course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceBusiness;
(vivii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for cash (A) dividends paid by any direct or indirect wholly owned Wholly Owned Subsidiary to the Company or to any other direct Wholly Owned Subsidiary of the Company or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice(B) or enter into any agreement dividends required to be paid with respect to the voting Series B Preferred Stock or the Series C Preferred Stock pursuant to the Series B Certificate of its capital stock Designation or other equity intereststhe Series C Certificate of Designation, respectively;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities other equity interests or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities shares of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), other than the acquisition withholding or use of any Ordinary Shares tendered by current to satisfy the payment of the exercise price on the exercise of a Company Option or former employees withholding Tax obligations upon the exercise, vesting or directors in order to pay Taxes in connection with the vesting settlement of Company RSUs)Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect on the Capitalization Date;
(viiiix) adopt or implement any stockholder rights plan or similar arrangement;
(x) form any Subsidiary or enter into any joint venture, partnership, limited liability corporation, strategic alliance or similar arrangement;
(xi) incur any Indebtedness or guarantee such Indebtedness (including the issuance of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security security), except for (A) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced; (B) Indebtedness pursuant to the Company’s existing credit facilities listed on Section 6.01(a)(xi) of the Company Disclosure Schedule as in effect as of the date hereof; (C) Indebtedness for capitalized leases (including finance or operating leases), or Indebtedness in respect of the deferred and unpaid purchase price of property or equipment, in each case incurred in the Ordinary Course of Business, provided that such Indebtedness may not exceed $2,500,000 in the aggregate; (D) Indebtedness incurred (1) by the Company that is owed to any Wholly Owned Subsidiary or (2) by any Wholly Owned Subsidiary that is owing to the Company or any other Wholly Owned Subsidiary; or (E) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 6.01(a);
(xii) make or authorize any payment of, or accrual or commitment for, capital expenditures, except (A) those contemplated by the Company’s capital expenditure forecast for the relevant fiscal year, which capital expenditure forecast has been made available to Parent prior to the date of this Agreement, and (B) any unforecasted capital expenditure, with respect to this clause (B) in an amount not to exceed $5,000,000 in the aggregate;
(xiii) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers or suppliers entered into in the Ordinary Course of Business;
(xiv) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 6.01(a)(vi) and Section 6.01(a)(xi), terminate, not renew (by exercising an applicable non-renewal right, or by not exercising an applicable renewal right), or in any material respect amend or otherwise modify or waive, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in, any Material Contract, other than expirations or non-renewals of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 millionany ministerial actions;
(ixxv) shall not authorize cancel, modify or make waive any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties debts or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed claims held by the Company or any of its Subsidiaries other than having in each case a value in excess of $500,000 individually or $1,000,000 in the payment of money damagesaggregate;
(xiixvi) amend any License contemplated by Section 4.05(d) in any material respect, or allow any such License to lapse, expire or terminate (except where the lapse, expiration or termination of any such License is with respect to a License that has become obsolete, redundant or no longer required by applicable Law);
(xvii) other than with respect to Transaction Litigation, any Proceeding in connection with, arising out of or otherwise related to a demand for appraisal under Section 262 of the DGCL or any Tax claim, audit, assessment or dispute, which shall be governed by Section 6.11, Section 3.02(f) and Section 6.01(a)(xix), respectively, settle or compromise any Proceeding for an amount in excess of $500,000 in the ordinary course aggregate, or which would reasonably be expected to (A) prevent, materially delay or materially impair the consummation of business the transactions contemplated by this Agreement, (B) have a materially negative impact on the operations and reputation of the Company and its Subsidiaries or (C) involve any criminal liability, any admission of material wrongdoing or any material wrongful conduct by the Company or any of its Subsidiaries;
(xviii) make any changes with respect to the extent accounting policies or procedures, except, in each case, as required by Lawchanges in GAAP;
(xix) make, make change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to material Taxes, settle any material amount of Tax claim, audit, assessment or dispute, surrender any right to claim a refund for material refund, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax, or take any action which would be reasonably expected to result in a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses increase in the Tax liability of the Company or its Subsidiaries, with a value or, in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal respect of any lease taxable period (or portion thereof) ending after the Closing Date, the Tax liability of real property that has expired by Parent or its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of businessAffiliates;
(xivxx) (A) grant, increase or provide except as required pursuant to the terms of any retention, change of control, severance or termination payments or benefits to any director, consultant or employee Company Benefit Plan in effect as of the Company or any date of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice this Agreement or as required by agreements, plans, programs applicable Law or arrangements in effect on the date hereofterms of this Agreement, (BA) increase in any manner the compensationcompensation or consulting fees, bonus or benefits ofbonus, or makeother benefits, grant severance or amend in termination pay of any respect any equity current or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any former director, consultant officer, employee or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practiceother service provider, (CB) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereofbecome a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement, other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs, (C) grant any new awards, or amend or modify the terms of any outstanding awards (including, in each case, Company Equity Awards), under any Company Benefit Plan Plan, (other than routine changes D) take any action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or equity for the benefit of benefits under any Person or funding of any Company Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof)Plan, (DE) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP, (F) forgive any loans or issue any loans to any current or former director, officer, employee or other service provider (other than routine travel advances issued in the Ordinary Course of Business), (G) hire any employee or engage any independent contractor (who is a natural person) with total cash compensation (an annual salary or wage rate or consulting fees and target annual cash bonus opportunity) in excess of $175,000, or (EH) except as required by Lawterminate the employment of any employee other than for cause;
(xxi) become a party to, establish, adopt, enter into amend, commence participation in or amend terminate any collective bargaining agreement, agreement or other agreement with a labor union, planlabor organization, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) works council or similar interests or rights)organization; or
(xxvxxii) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company Nothing set forth in this Agreement shall knowingly take give Parent, directly or permit any of their Subsidiaries indirectly, the right to take any action that is reasonably likely to prevent control or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth direct the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended or its Subsidiaries’ operations prior to the Closing Date)Effective Time or give the Company, certifying that each such Subsidiary does not own any U.S. real property idirectly or indirectly, the right to control or direct the Parent’s or its Subsidiaries’ operations prior to the Effective Time.
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable LawThe Company shall, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 and shall cause each of the Company Disclosure Letterits Subsidiaries to, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or and the termination of this Agreement in accordance with its terms pursuant to Article IX (unless Buyer (I) Parent shall otherwise approve in writing, such which approval shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed, (II) expressly contemplated or required by this Agreement, applicable Law, (III) as set forth in Section 7.1(a) of the Company Disclosure Schedule or (IV) with respect to actions taken or omitted by, or at the specific direction of, any Specified Person taken at the direction of BK or with BK’s consent (the exceptions set forth in the foregoing clauses (I) – (IV), the Company shall“Interim Covenant Exceptions”), and shall cause use commercially reasonable efforts to conduct its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws Ordinary Course of Business and, to the extent consistent therewith, it shall, shall use and shall cause each of its Subsidiaries, Subsidiaries to use their respective commercially reasonable best efforts to preserve their material business organizations intact and maintain (x) maintain, in all material respects existing respects, its and its Subsidiaries’ relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees, consultants, agents and business associates and (y) keep available, in all material respects, the services of the employees and business associatesconsultants of the Company and Subsidiaries. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing sentence, from at all times during the date period commencing with the execution and delivery of this Agreement and continuing until the earlier of the Effective Time or and the termination of this Agreement in accordance with its termspursuant to Article IX, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not pursuant to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letterany Interim Covenant Exception, the Company will shall not (and will shall cause its Subsidiaries not to:):
(i) amend or otherwise changeadopt any change in its Organizational Documents, or authorize or propose other than immaterial amendments to amend or otherwise change its articles applicable organizational documents of association, certificate of incorporation, bylaws or other applicable governing documentsthe Company’s Wholly Owned Subsidiaries;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person Person, or restructure, reorganize or completely or partially liquidate liquidate, in each case except for any such transactions solely among Wholly Owned Subsidiaries of the Company or any of its SubsidiariesCompany;
(iii) acquire (acquire, directly or indirectly by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise, any business, Person, properties (including real properties) or assets from any corporationother Person with a fair market value or purchase price in excess of $5 million in the aggregate, partnership in each case, including any amounts or other business organization value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company or any assets constituting a division of its Subsidiaries to consummate the transactions contemplated by this Agreement by the Outside Date, other than acquisitions of inventory or business line assets, goods or properties in the Ordinary Course of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementBusiness;
(iv) issuetransfer, sell, pledge convey, lease, sublease, license, pledge, mortgage, assign, divest, grant any option in, cancel or otherwise encumber abandon or subject dispose of, or incur, permit or suffer to exist the creation of any Lien Encumbrance (whether through other than Permitted Encumbrances) upon, any properties (including any Real Property) or assets (tangible or intangible, but other than Intellectual Property which is addressed in Section 7.1(a)(xx)), product lines or businesses of the issuance Company or granting any of optionsits Subsidiaries, warrantsincluding capital stock or other equity interests of any of its Subsidiaries, commitmentsexcept in connection with (A) sales of obsolete assets in the Ordinary Course of Business, subscriptions(B) sales or other dispositions of franchises or dealer locations in the Ordinary Course of Business, rights to purchase (C) sales, leases, or otherwise)other dispositions of assets (not including services) with a fair market value not in excess of $5 million in the aggregate in the Ordinary Course of Business and (D) sales of receivables in securitization or factoring transactions;
(v) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or authorize otherwise enter into any Contract with respect to the issuancevoting of, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary including, for the avoidance of doubt, Shares) or capital stock or other equity or equity-based interests of any of its Subsidiaries Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any Company Securities options, warrants or Other Subsidiary Securities other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, Voting Agreement or (B) the issuance of Ordinary Shares pursuant to the shares of such capital stock, other equity securities or convertible or exchangeable securities in respect of Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect Equity Awards outstanding as of the date hereof (for the avoidance of doubtthis Agreement in accordance with their terms and, as applicable, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as Stock Plans in effect as of on the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)Capitalization Time;
(vvi) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of from the Company and any of its Wholly Owned Subsidiaries) in excess of $2 million individually or $5 million in the ordinary course aggregate, except for extensions of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course Ordinary Course of business consistent with past practiceBusiness;
(vivii) declare, set aside, establish a record date for, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for cash dividends (A) paid by any direct or indirect wholly owned Wholly Owned Subsidiary to the Company or to any other direct or indirect wholly owned Wholly Owned Subsidiary in of the ordinary course of business consistent with past practiceCompany and (B) or enter into any agreement with respect dividends payable to the voting holders of its capital stock or other equity interestsSeries A Preferred Shares, payable in cash in an amount not to exceed $1.875 per Series A Preferred Share annually, in accordance with the terms of the Certificate of Designation;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly acquire or indirectlyoffer to do any of the foregoing, any of its capital stock, Company Securities other equity interests or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities shares of its capital stock or other equity interests (other than including with respect to the acquisition Company, for the avoidance of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUsdoubt, Shares);
(viiiix) incur incur, assume, repurchase or prepay or guarantee or endorse or otherwise become responsible for any Indebtedness or guarantee such Indebtedness for borrowed money (including the issuance of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security security), except for (A) trade payables incurred in the Ordinary Course of Business, (B) pursuant to Existing Indebtedness (including borrowings under the ABL Credit Agreement), (C) any refinancing, extension, renewal or replacement of any outstanding Indebtedness of the Company, in the case of this clause (C), that does not increase the principal amount of Indebtedness outstanding, (D) the incurrence of Indebtedness for borrowed money in the Ordinary Course of Business not to exceed $5 million in the aggregate in the case of this subclause (D), or (E) the renewal and refinancing of any Insurance Policies;
(x) make or authorize any payment of, or accrual or commitment for, capital expenditures, except to the extent set forth in the line items of the Company’s capital budget set forth in Section 7.1(a)(x) of the Company Disclosure Schedule;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than any Material Contract permitted by Section 7.1(a)(ix)(C) and in the Ordinary Course of Business;
(xii) terminate, fail to renew or amend or otherwise modify or waive or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in, any Material Contract, other than expirations or non-renewals of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company, any of its Subsidiaries or other party to such Contract;
(xiii) cancel, modify or waive any debts or claims held by or owed to the Company or any of its Subsidiaries except as canceled, modified, or waived in the Ordinary Course of Business not to exceed $1 million individually or $2 million in the aggregate;
(xiv) amend any material License contemplated by Section 5.5(b)(i) in any material respect, or allow any such material License to lapse, expire or terminate (except where the lapse, expiration or termination of any such License is with respect to a License that has become obsolete, redundant or no longer required by applicable Law);
(xv) amend, modify, terminate, cancel or let lapse any Insurance Policy or fail to file any claims thereunder in a timely manner as required under such Insurance Policies;
(xvi) sell inventory outside of the Ordinary Course of Business or fail to order, maintain and manage levels of inventory consistent with the levels ordered, maintained and managed by the Company in the Ordinary Course of Business;
(xvii) settle, pay, discharge or compromise any Proceeding for an amount in excess of $2 million individually or $4 million in the aggregate during any calendar year or on a basis that would result in the imposition of any Order that would restrict the future activity or conduct of the Company or any of its SubsidiariesSubsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person, except for (A) Indebtedness for borrowed money under or which would reasonably be expected to prevent, materially delay or materially impair the revolving facility under consummation of the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 milliontransactions contemplated by this Agreement by the Outside Date;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(xxviii) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or (as confirmed in writing by a Governmental Entitythe Company’s independent registered public accounting advisor);
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xiixix) other than in the ordinary course Ordinary Course of business Business, (A) make, change or to the extent required by Law, make revoke any material Tax electionelection or change any material Tax accounting method, (B) file any material amended income Tax Return, settle (C) enter into, cancel or compromise any material amount of Tax Liability, enter into modify any closing agreement with respect to any a material amount of Taxes, (D) settle or otherwise compromise any Tax claim, audit, assessment or dispute with respect to a material amount of Taxes, in the case of clause (C), (D) or (E), for an amount materially in excess of the amount reserved for Taxes on the financial statements of the Company, (E) surrender any right to claim a refund for with respect to a material amount of TaxTaxes, (F) request any material ruling with respect to Taxes, (G) agree to an extension or waiver of the statute of limitations with respect to any material Taxes (in each case, other than in connection with extensions of time to file Tax Returns that are automatic or automatically granted or otherwise constitute ordinary course extensions), or (H) enter into any material Tax indemnification, sharing, allocation or similar agreement or arrangement (other than customary provisions under any commercial, leasing, financing, employment or other agreement entered into in the ordinary course of business no principal purpose of which relates to Taxes);
(xiiixx) transfer, sell, lease, license, mortgage, pledge license or otherwise encumber dispose of, grant a covenant not to sue or subject to a Lien (other than a Permitted Lien)right under, surrenderabandon, divest, cancel, abandon cancel or allow to lapse or expire or otherwise dispose of any assetsCompany Intellectual Property, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for other than (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries granted in the ordinary course Ordinary Course of businessBusiness, or (B) any abandonment abandonments, cancellation, lapses or expiry of Company Intellectual Property that is not material to the Company Company’s or any Subsidiary determines in its Subsidiaries’ respective businesses.
(xxi) except as required by applicable Law or pursuant to the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal terms of any lease Company Benefit Plan in effect as of real property that has expired by its terms or the termination date of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) this Agreement, (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) materially increase in any manner the compensationcash compensation or consulting fees, bonus opportunity, severance or benefits of, termination pay of any current or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the former Company or any of its SubsidiariesEmployee, except for (1) in the case respect of employees or consultants those Company Employees who are not executive officers of the Companyofficers, increases in annual salary, wage rate or consulting fees in the ordinary course Ordinary Course of business consistent with past practice or as is Business that do not material exceed four percent (4%) in the aggregate aggregate, and any consequent increases in severance or termination pay, and (2) in respect of all Company Employees, the case payment of employees who are executive officers annual bonuses for completed periods based on actual performance, if applicable, in the Ordinary Course of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practiceBusiness, (CB) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereofbecome a party to, establish, adopt, amend, commence participation in or terminate any material Company Benefit Plan, except for renewals in the Ordinary Course of Business, (C) grant any new equity-based awards, or amend or modify the terms of any Benefit Plan outstanding equity-based awards, under any Stock Plan, (other than routine changes D) take any action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or equity for the benefit of benefits under any Person or funding of any Benefit Plan (Stock Plan, except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to under the terms thereof as in effect on the date hereof)of this Agreement, (DE) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP, (F) forgive any loans or issue any loans to any current or former Company Employee (other than routine travel and other expense advances issued in the Ordinary Course of Business), (G) hire any Company Employee above the level of Vice President (as such term is used to reflect corporate Vice Presidents); or (EH) except terminate without cause the employment of any Company Employee above the level of Vice President (as required by Lawsuch term is used to reflect corporate Vice Presidents);
(xxii) become a party to, establish, adopt, enter into amend, commence participation in or amend terminate any collective bargaining agreement, agreement or other similar agreement with a labor union, planlabor organization, trustworks council or similar organization, fund, policy or arrangement except for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course Ordinary Course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Business; or
(xxvxxiii) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company Nothing set forth in this Agreement shall knowingly take give Parent, directly or permit any of their Subsidiaries indirectly, the right to take any action that is reasonably likely to prevent control or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth direct the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended or its Subsidiaries’ operations prior to the Closing Date)Effective Time or give the Company, certifying that each such Subsidiary does not own any U.S. real property idirectly or indirectly, the right to control or direct the Parent’s or its Subsidiaries’ operations prior to the Effective Time.
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after From the date hereof and until the earlier of the Effective Closing Date or the date, if any, on which this Agreement is terminated pursuant to Section 9.1 (the "Termination Date"), the Significant Vendors shall cause the Companies to: (i) conduct the Business only in the Ordinary Course of Business; and (ii) use their reasonable efforts (x) to preserve intact the business organization and goodwill of the Business, (y) to maintain the Companies’ relationships with their respective Clients, brokers, insurance underwriters, Potential Counterparties and other Persons having business dealings with the Companies and (z) to keep available the services of the key Business Employees.
(b) Without limiting the generality of the foregoing, except as expressly permitted by this Agreement or as approved in writing by the Purchaser (which approval shall not be unreasonably withheld, conditioned or delayed), from the date hereof until the earlier of the Closing Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)Agreement, the Significant Vendors shall not permit any Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its Organizational Documents, other than the filing of articles of association, certificate amendment to increase the maximum number of incorporation, bylaws or other applicable governing documentsdirectors of Omega Holdings to 21;
(ii) mergeauthorize, enter into issue, sell or transfer any scheme of arrangement or bid conduct agreement share capital or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the equity interests of such Company or any securities convertible into or exercisable or exchangeable for share capital or other equity interests of its Subsidiariessuch Company, or adjust, split or reclassify any share capital or other equity interests of such Company;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, property stock or otherwise, with other property) in respect to of any of its shares share capital or other equity interests of such Company;
(except for cash dividends paid by any direct iv) merge or indirect wholly owned Subsidiary to the Company or to consolidate with any other direct Person or indirect wholly owned Subsidiary acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or otherwise), or form any subsidiary;
(v) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(vi) make any material change in the ordinary course operation of business consistent the Business, except such changes as may be required to comply with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsApplicable Law;
(vii) reclassifymake, split, combine, subdivide authorize or redeem, purchase or otherwise acquire, directly or indirectlymake any commitment with respect to, any single capital expenditure that is in excess of its $10,000 or capital stockexpenditures that are, Company Securities or any Other Subsidiary Securities (other than in the acquisition aggregate, in excess of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs)$25,000;
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except in connection with respect to obligations of wholly owned Subsidiaries of the Company operations in the ordinary course Ordinary Course of business Business and upon terms not materially adverse to such Company, amend in a manner that would not have any material Tax consequences)respect, or issue terminate (other than in accordance with its terms) any Material Contract, or sell waive, release or assign any debt securities material rights or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 millionclaims thereunder;
(ix) shall except in connection with operations in the Ordinary Course of Business and upon terms not authorize materially adverse to such Company, enter into any Material Contract (A) that has a term of, or make requires the performance of any capital expenditures obligations over a period, in excess of $40 million in the aggregateone year, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwisethat cannot be terminated without penalty on less than three (3) months’ notice;
(x) make sell, lease (as lessor), transfer or otherwise dispose of, or mortgage, encumber, pledge or impose any material changes with respect Lien on, any of its assets or properties, other than (A) pursuant to any method existing contracts disclosed to the Purchaser, and (B) dispositions of Tax immaterial assets or financial accounting policies or procedures, except as required by changes properties for fair value in GAAP or Law or by a Governmental Entitythe Ordinary Course of Business;
(xi) except with respect to create, incur, assume or guarantee any litigationIndebtedness, audit, claim, action or other Proceeding related to Tax Returns extend or modify any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damagesexisting Indebtedness;
(xii) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees and, in the ordinary course case of business or to Omega General, passive investments, in each case in the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount Ordinary Course of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of TaxBusiness);
(xiii) transfercancel any debts owed to, sellor waive any material claims or rights held by, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of businesssuch Company;
(xiv) (A) grantcommence, increase settle or provide compromise any retentionAction by or against such Company arising in the Ordinary Course of Business (including in relation to Actions arising under Insurer Contracts) where the amount claimed under any such Action exceeds $100,000 or where the settlement or compromise of any such Action requires the payment of monetary damage in an aggregate amount of more than $100,000, change of controlor (B) commence, severance settle or termination payments compromise any Action by or benefits to any director, consultant or employee against such Company arising outside of the Company Ordinary Course of Business where the amount claimed under any such Action exceeds $25,000 or where the settlement or compromise of any such Action requires only the payment of its Subsidiaries, except, monetary damage in an aggregate amount of more than $25,000;
(xv) incur expenses (including legal or other professional fees) in excess of $25,000 in the case of employees who are not executive officers of the Companyaggregate in connection with any ongoing, new or proposed Action involving or relating to such Company (other than expenses, including legal and other professional fees) incurred in connection with Actions arising under Insurer Contracts in the ordinary course Ordinary Course of business consistent with past practice or Business);
(xvi) except as required by agreements, plans, programs Applicable Law or arrangements any existing Contract or Employee Benefit Plan in effect on the date hereof, (BA) institute or announce any increase in any manner the compensation, bonus bonuses or other benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or payable to any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practiceemployees, (CB) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreementemployment, labor unionconsulting, planseverance or change of control agreement with any such Person, trustor (C) enter into, fund, policy adopt or arrangement for the benefit of amend any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsEmployee Benefit Plan;
(xvA) grant a license hire any new executive employee or make an offer of employment to any material Intellectual Property owned by the Company person for an executive employee position, (B) engage any consultant or any of its Subsidiaries other than independent contractor or (C) except in the ordinary course Ordinary Course of business consistent with past practice;
(xvi) allow Business, promote any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreementcurrent employee;
(xviii) enter into any Contract transaction with any of its Affiliates, except transactions that would require payment to or give rise to any rights (other than notice) are at prices and on terms and conditions not less favorable to such other party Company than could be obtained on an arm’s-length basis from unrelated third parties and except for transactions solely between one or parties in connection with more of the transactions contemplated by this AgreementCompanies;
(xix) institute make any general layoff change in the accounting methods, principles or policies applied in the preparation of employeesthe Financial Statements, implement other than any early retirement plan change required by Applicable Law or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws)change in GAAP;
(xx) implement fail to file any broad-based early retirement plan material Tax Return when due or announce the planning of such a programpay any material Tax when due (other than Taxes being contested in good faith), or make or change any Tax election;
(xxi) enter into fail to pay any new line accounts payable when due or within a reasonable period of business outside of its existing business time thereafter (other than amounts being contested in good faith) or renew or enter into fail to use commercially reasonable efforts to collect any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiariesaccounts receivable when due;
(axxii) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior fail to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien renew or otherwise transfer, keep in whole or in part, rights or interest pursuant full force and effect any material License relating to or in any Material Contract;the Business; or
(xxiii) other than renewals in the ordinary course of businessenter into any agreement, amend, modify, terminate, cancel commitment or let lapse a material insurance policy understanding (whether written or reinsurance policyoral) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal respect to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit foregoing except where any of their Subsidiaries to take any action that the foregoing is reasonably likely to prevent solely between one or materially interfere with the consummation more of the transactions contemplated by this AgreementCompanies.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Interim Operations. (a) Except (i) as expressly contemplated or required by this Agreement, (xii) as required by applicable Law, (yiii) otherwise expressly required as approved in writing by this Agreement or Parent (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), (iv) as set forth on Section 6.1(a) of the Company shallDisclosure Schedule or (v) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, and shall cause its Subsidiaries tothat, conduct their business with respect to actions taken or omitted to be taken in the ordinary course consistent with past practice and in compliance with all applicable Laws andreliance on this clause (v), to the extent consistent therewithpermitted under applicable Law and practicable under the circumstances, it shall, the Company shall provide prior notice to and shall cause its Subsidiaries, consult in good faith with Parent prior to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereoftaking such action), from the date of this Agreement until the earlier to occur of the Effective Time or the termination of this Agreement in accordance with pursuant to Article VIII and the Effective Time, the Company will, and will cause its termsSubsidiaries to, except as use its and their reasonable best efforts to (A) required by applicable Law or as contemplated by conduct their businesses in the Scheme Document Annex, ordinary course of business and (B) otherwise preserve intact their business organizations and relationships with customers, suppliers, distributors and other Persons with which it has material business dealings and to remain in material compliance with all of its obligations under, and to not allow an event of default to occur under, the Loan Agreement; provided that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Except (u) as expressly contemplated or required by this Agreement, (Cv) Buyer may approve as required by applicable Law, (w) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or ), (Dx) as set forth in on Section 6.1 6.1(b) of the Company Disclosure LetterSchedule, or (y) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (y), to the extent permitted under applicable Law and practicable under the circumstances, the Company shall provide prior notice to and consult in good faith with Parent prior to taking such action), from the date of this Agreement until earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will not not, and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise (x) adopt any change its articles of association, in the certificate of incorporation, incorporation or bylaws of the Company or other applicable governing documents(y) adopt any change in the comparable organizational document of any of the Company’s Subsidiaries;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or restructure, reorganize reorganize, recapitalize or completely or partially liquidate or dissolve the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transferof or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance or subjecting to any Lienof, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any Company Securities options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or Other Subsidiary Securities (other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction solely among the issuance of Ordinary Shares upon Company and its wholly owned Subsidiaries or among the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereofCompany’s wholly owned Subsidiaries, (B) the any issuance of Ordinary Shares pursuant to exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms or issuance of Company Equity Awards upon the recommendation of the Compensation and Talent Committee, (C) incurrence of any Permitted Liens or (D) accrual of dividends on the Series B Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise terms thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(viv) make or forgive any loans, advances or capital contributions to or investments in any Person (other than (A) to the Company or any direct or indirect of its wholly owned Subsidiary Subsidiaries, (B) operating leases and extensions of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit terms to customers and advancing business expenses to employees, in each case, case in the ordinary course of business consistent with past practicepractice and (C) advances of reimbursable expenses to any director or officer of the Company or its Subsidiaries in connection with advancement obligations in effect on the date of this Agreement);
(viv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise with respect to any of its shares capital stock, except for (A) dividends or other equity interests (except for cash dividends distributions paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary in of the ordinary course of business consistent with past practiceCompany and (B) or enter into any agreement with respect dividends on the Series B Shares pursuant to the voting of its capital stock or other equity intereststerms thereof;
(viivi) reclassify, split, combine, subdivide or redeem, purchase purchase, repurchase or otherwise acquire, directly or indirectly, any shares of its capital stockstock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (except for (A) any such transaction by a wholly owned Subsidiary of the Company which remains wholly owned thereafter, Company Securities or any Other Subsidiary Securities (other than the acquisition B) acquisitions of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with upon the vesting or sale thereof in satisfaction of withholding obligations in respect of Company RSUsEquity Awards to the extent expressly required by the terms of such Company Equity Awards, or (C) payment of the exercise price in respect of Company Stock Options, in the case of clauses (B) and (C), outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(viiivii) incur create, incur, assume or guarantee any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company type described in clauses (a) and (b) of the definition of “Indebtedness”, except for (A) borrowings in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under Loan Agreement that do not exceed $1 million individually or in the Company Credit Agreementaggregate, (B) loans guarantees or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed credit support provided by the Company or any of its Subsidiaries other than of the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses obligations of the Company or its Subsidiaries, with a value in excess any of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of businessbusiness to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with clause (A) of this Section 6.1(b)(vii) and does not violate any other Contract of the Company, (B) any abandonment of Intellectual Property that including the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of businessLoan Agreement, and (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers Indebtedness solely among the Company and its wholly wholly-owned Subsidiaries in or among the ordinary course of businessCompany’s wholly-owned Subsidiaries;
(xivviii) (A) grant, increase incur or provide any retention, change of control, severance or termination payments or benefits commit to any directorcapital expenditure or expenditures, consultant or employee except capital expenditures (w) reflected in the 2023 operating budget of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof less than $1 million individually or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary $5 million in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsaggregate;
(xvix) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
, (xviA) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, or (B) amend, modify or waive in any material respect or terminate any Material Contract (or any material rights thereunder) in a manner adverse to the Company (other than expirations or termination for cause of any such Contract in accordance with its terms);
(x) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) settle, pay, satisfy, discharge, release, waive or compromise any Action for an amount in excess of $5 million individually or $10 million in the aggregate other than (A) any settlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered by insurance coverage or retention amounts maintained by the Company or any of its Subsidiaries and (B) settlements or compromises of any Action for an amount not materially in excess of the amount, if any, reflected or specifically reserved in the balance sheet (or the notes thereto) of the Company included in the Company Reports (with materiality measured relative to the amount so reflected or reserved, if any); provided that, in the case of each of the foregoing clauses (A) and (B), the settlement or compromise of such Action does not (x) impose any non-de minimis restriction on the business or operations of the Company or any of its Subsidiaries (or Parent or any of its Subsidiaries after the Closing) and (y) include any non-de minimis non-monetary or injunctive relief, or the admission of wrongdoing, by the Company or any of its Subsidiaries or any of their respective officers or directors;
(xii) assign, transfer, sell, lease, license, exchange, swap, encumber or subject to any Lien (other than Permitted Liens), abandon, permit to lapse, or otherwise dispose of any material assets or property (including any capital stock of any Subsidiaries of the Company and any material Owned Intellectual Property) except (A) pursuant to existing contracts or commitments in effect prior to the execution of this Agreement (or refinancings thereof), (B) transactions solely among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, or (bC) in the ordinary course of business;
(xiii) except for such actions required by the terms of Company Plans, in each case, as in effect on the date hereof: (A) increase the compensation or other benefits payable or provided to the Company’s or its Subsidiaries’ current or former employees, officers, directors, independent contractors or other individual service providers, except in the ordinary course of business; (B) increase or accelerate or commit to accelerate the funding, payment or vesting of compensation or benefits provided under any Company Plan, (C) grant or announce any cash- or equity or equity-based incentive awards, bonus, change of control, severance or retention award to any employee or other service provider of the Company or its Subsidiaries; (D) establish, adopt, enter into, modify, terminate or amend any labor agreement or Company Plan (or any plan, program, agreement or arrangement that would be a Company Plan if in effect on the date hereof); (E) recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative of any employees of the Company or its Subsidiaries or (F) hire or terminate (other than for cause) the employment of any employee of the Company or any of its Subsidiaries whose total annual base compensation exceeds (or would exceed) $200,000;
(xiv) acquire, or agree to acquire, any business, assets that constitute a business or capital stock of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than the acquisition of assets from vendors or suppliers of the Company or any of its Subsidiaries in the ordinary course of business, or enter into any material joint venture, partnership or similar arrangement with any Person;
(xv) implement or announce any permanent plant closings or permanent facility shutdown that would implicate the Worker Adjustment and Retraining Notification Act of 1988;
(xvi) (A) make, change or revoke any Tax election; (B) change any annual Tax accounting period or method of Tax accounting, (C) file any amended Tax Return, (D) settle or compromise any material claim related to Taxes, (E) enter into any material closing agreement, (F) surrender any right to claim a material Tax refund, offset or other reduction in liability, (G) request or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment, (H) fail to pay any material Tax the becomes due and payable (including estimated tax payments), (I) incur any material liability for Taxes (other than in the ordinary course of business consistent with past practice business) or expirations (J) request any ruling or similar guidance from any Taxing Authority in respect of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material ContractTaxes;
(xxiiixvii) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxvxviii) agree, authorize or commit to do any of the foregoing.
(bc) Neither Buyer nor Company shall knowingly take Nothing contained in this Agreement is intended to give Parent or permit Merger Sub or any of their Affiliates, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to take the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, including the restrictions set forth above, complete control and supervision over its and its Subsidiaries’ respective operations.
(d) Subject to the terms of this Agreement, including Section 6.5, from the date of this Agreement until the Effective Time, Parent and Merger Sub shall not, and shall cause their respective Affiliates not to (including, for the avoidance of doubt, through the Equity Financing and use of negative control rights where available), directly or indirectly, invest in or acquire, or agree to invest in or acquire, including by merging or consolidating with, or by purchasing the assets of or equity in, any action that is Person (a “Specified Acquisition”), if the entering into of a definitive agreement relating to or the consummation of such a Specified Acquisition would reasonably likely be expected to prevent (A) prevent, materially delay or materially interfere with impair the obtaining of, or adversely affect in any material respect the ability of Parent or its Affiliates to obtain, any authorizations, consents, orders, declarations or approvals of any Governmental Authority or the expiration or termination of any applicable waiting period necessary to consummate the transactions contemplated by this Agreement, including the Merger, or (B) materially increase the risk of any Governmental Authority entering an order, ruling, judgment or injunction prohibiting the consummation of the transactions contemplated by this Agreement, including the Merger.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, such which approval shall not to be unreasonably withheld, delayed withheld or conditioned), the Company shalldelayed, and shall cause except as otherwise expressly contemplated by this Agreement):
(a) the business of it and its Subsidiaries to, conduct their business shall be conducted in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material its business organizations organization intact and maintain in all material respects its existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates. Without limiting ;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws or, amend, modify or terminate the generality Rights Agreement; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries and other than regular quarterly cash dividends not in excess of $0.055 per Share; or (v) repurchase, redeem or otherwise acquire, except in connection with the foregoing and in furtherance thereofStock Plans, from the date or permit any of this Agreement until the earlier its Subsidiaries to purchase or otherwise acquire, any shares of the Effective Time its capital stock or the termination any securities convertible into or exchangeable or exercisable for any shares of this Agreement its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other property or assets (other than in accordance with the Rights Agreement and other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Stock Plans); (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its terms, except as Subsidiaries) or incur or modify any material indebtedness or other liability; (iii) (A) required by applicable Law make or as contemplated authorize or commit for any capital expenditures other than capital expenditures (a) in the aggregate amount remaining in the capital appropriations/spending budgets set forth in the Company LA_LAN01:179306.23 Disclosure Schedule after deducting amounts previously authorized or committed by the Scheme Document AnnexCompany with respect to calendar year 2005 and (b) in amounts not in excess of $2 million individually and $10 million in the aggregate with respect to all unbudgeted capital expenditures, or (B) otherwise expressly required by this Agreementany means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity for consideration in excess of (Ca) Buyer may approve in writing the aggregate amount remaining in the acquisitions budget set forth in the Company Disclosure Schedule after deducting amounts previously spent by the Company with respect to acquisitions and investments in calendar year 2005 and (such approval b) in amounts not in excess of $2 million individually and $10 million in the aggregate with respect to be unreasonably withheldall unbudgeted acquisitions; and (iv) enter into any joint venture agreement, delayed partnership agreement or conditionedsimilar agreement with any Person;
(d) or (D) except as set forth in Section 6.1 Sections 5.1(h)(i) and 5.1(h)(xii) of the Company Disclosure LetterSchedule, the Company will not and will cause or as otherwise required by applicable Law, neither it nor any of its Subsidiaries not to:
shall (i) amend grant or otherwise changeprovide any severance or termination payments or benefits to any director, officer or authorize or propose to amend or otherwise change its articles Employee of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by mergerSubsidiaries except, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course case of business and in a manner that would Employees who are not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each caseofficers, in the ordinary course of business consistent with past practice;
, (viii) declareincrease the compensation, set asidebonus or pension, make welfare, profit-sharing, severance or other benefits of, pay any dividend bonus to, or other distribution, payable in cash, stock, property or otherwise, with respect make any new equity awards to any of its shares director, officer or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security Employee of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness increases in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, base salary in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereoffor Employees who are not officers, (Biii) increase enter into, adopt, extend or renew any employment, severance, change in any manner the compensationcontrol, bonus termination, deferred compensation or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, other similar agreement with any director, consultant officer or employee Employee of the Company or any of its Subsidiaries, except (1iv) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, amend, suspend, terminate or amend exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Options or Company Awards, (v) take any action to fund or in any other than routine changes way secure the payment of compensation or benefits under any Company Benefit Plan, (vi) take any action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of benefits under any Person or funding of any Company Benefit Plan (except (x) as required in connection with the termination of the Arris GroupPlan, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof)extent not already provided for under any such Company Benefit Plan, (Dvii) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP; or (Eviii) except as required by Law, establish, adopt, enter into or amend forgive any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former loans to directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations Employees of the Company or any of its Subsidiaries;
(ae) other than new Contracts prior to making any written or oral communications to any of its or its Subsidiaries’ directors, officers or Employees pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, it shall provide Parent with customers or suppliers a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the intended communication, and Parent and the Company shall cooperate in providing any such communication;
(f) except in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary and usual course of business, amend, neither it nor any of its Subsidiaries shall settle or compromise any material claims or litigation or LA_LAN01:179306.23 modify, terminateamend or terminate any of its material Contracts or waive, cancel release or let lapse a assign any material rights or claims;
(g) neither it nor any of its Subsidiaries shall make any Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(h) neither it nor any of its Subsidiaries shall take any action or reinsurance policyomit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect;
(i) neither it nor any of its Subsidiaries will authorize or self-insurance program enter into any ▇▇▇▇▇▇;
(j) neither it nor any of its Subsidiaries will enter into any agreement that limits (other than in an insignificant manner) the ability of the Company or its Subsidiaries in effect as any Subsidiary of the date hereofCompany, unless simultaneous or would limit (other than in an insignificant manner) the ability of Parent or any Subsidiary of Parent after the Effective Time, to compete in or conduct any line of business or compete with such terminationany Person in any geographic area or during any period, cancellation or lapse, replacement policies underwritten it being understood that any restriction that by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal its terms does not extend more than six months beyond the Effective Time shall be deemed to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effectbe insignificant;
(xxivk) not exercise neither it nor any rights under Section 5 of its Subsidiaries will enter into any marketing Contract with respect to natural gas for a term longer than 31 days from the date of such Contract (or Section 6 six months in the case of Bolivia);
(l) neither it nor any of its Subsidiaries will enter into any marketing Contract with respect to crude oil for a term longer than two full months from the last day of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined calendar month in the Company’s current articles of association) or similar interests or rights)which such Contract is entered into; orand
(xxvm) agree, neither it nor any of its Subsidiaries will authorize or commit enter into an agreement to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Interim Operations. (a) Except From the date of this Agreement until the Effective Time, except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement Law or (z) otherwise as set forth in Section 6.1 5.2(a) of the Company Disclosure LetterSchedule, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement unless Parent has consented in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)writing thereto, the Company shall, and shall cause its Subsidiaries to, :
(i) conduct their business in the its operations according to its ordinary course of business consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations with all applicable Laws; (ii) use its commercially reasonable efforts to preserve intact its business organizations and goodwill with Governmental Entitiesgoodwill, customers, supplierskeep available the services of its officers, employees and consultants, and maintain satisfactory relationships with those Persons having business associates. Without limiting relationships with them; (iii) upon the generality discovery thereof, promptly notify Parent of the foregoing existence of any breach of any representation or warranty contained herein (or, in the case of any representation or warranty that makes no reference to Company Material Adverse Effect or materiality, any breach of such representation or warranty in any material respect) or the occurrence of any event that would cause any representation or warranty contained herein no longer to be true and correct (or, in furtherance thereofthe case of any representation or warranty that makes no reference to Company Material Adverse Effect or materiality, from to no longer be true and correct in any material respect); (iv) promptly deliver to Parent true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement; and (v) pay its Taxes when due.
(b) From and after the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) may be required by applicable Law or as contemplated by the Scheme Document Annexany pre-existing contractual obligation, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) and except as set forth in Section 6.1 5.2(b) of the Company Disclosure LetterSchedule, unless Parent has consented in writing thereto (which consent shall not be unreasonably withheld or delayed), the Company will not shall not, and will shall cause its Subsidiaries not to:
: (i) amend its Amended Articles of Incorporation or otherwise changeAmended and Restated By-Laws; (ii) offer, issue, sell or pledge any shares of its capital stock or other ownership interest in the Company or its Subsidiaries, or authorize any securities convertible into or propose exchangeable for any such shares or ownership interest, or any rights, warrants or options to amend acquire or with respect to any such shares of capital stock, ownership interest, or convertible or exchangeable securities other than pursuant to the Company’s existing employee benefits plans; (iii) effect any stock split or otherwise change its articles of associationcapitalization as it exists on the date hereof; (iv) grant, certificate of incorporationconfer or award any option, bylaws warrant, convertible security or other applicable governing documents;
right to acquire any shares of its or its Subsidiaries’ capital stock; (iiv) mergedeclare, enter into set aside or pay any scheme dividend or make any other distribution or payment with respect to any shares of arrangement or bid conduct agreement its capital stock or other similar arrangementownership interests (other than such payments by the Subsidiaries to the Company); (vi) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of its Subsidiaries or any securities that are convertible into or exchangeable for any shares of capital stock of, or consolidate with other equity interests in, or any outstanding options, warrants or rights of any kind to acquire any shares of capital stock of, or other Person or restructureequity interests in, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
; (iiivii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of optionslease, warrantslicense, commitmentsmortgage, subscriptionspledge, rights to purchase or otherwise), dispose of, grantencumber, transfer, exchange or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer otherwise dispose of any shares of its properties or assets, whether tangible or intangible (including capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (Subsidiaries), other than (A) the issuance sale or disposition of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary inventory in the ordinary course of business consistent with past practice or the sale, lease or other disposition of assets which individually or in the aggregate, are obsolete or not material to the Company and its Subsidiaries taken as a whole; (viii) acquire by merger or consolidation with, by purchase of any equity interest of or by any other manner, any business or entity or otherwise acquire any assets, except for purchases of inventory, supplies or capital equipment in a manner that would not have the ordinary course of business; (ix) incur or assume any material Tax consequences);
long-term or short-term debt, except for working capital purposes and the purchase of capital equipment in the ordinary course of business under the Credit Facility; (vx) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except its Subsidiaries; (xi) make or forgive any loans, advances or capital contributions to continuations to, or investments in in, any other Person (other than advances to any direct officers or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, employees in the ordinary course of business consistent with past practice;
; (vixii) declareincrease the compensation (or benefits) payable to or to become payable to any director, set aside, make or pay any dividend officer or other distributionemployee, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary payments of bonuses not to exceed the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practiceamounts set forth on Section 5.2(b) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company Disclosure Schedule, increases in salary or wages of non-officer employees in the ordinary course of business and in a manner that would not have consistent with past practice or pursuant to any material Tax consequences)existing employment agreements of the Company; (xiii) establish, adopt, enter into, materially amend, or issue take any action to accelerate any rights or sell benefits under any debt securities or warrants or other rights to acquire any debt security of the Company collective bargaining agreement or any of its SubsidiariesPlan; (xiv) effect any reorganization or recapitalization; (xv) pay, except for discharge, settle or satisfy any claims, liabilities, obligations or litigation (Aabsolute, accrued, asserted or unasserted, contingent or otherwise) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million 250,000 individually and $500,000 in the aggregate, except for (A) expenditures set forth other than the payment, discharge, settlement or satisfaction in the current capital forecast set forth ordinary course of business or in Section 6.1(a)(ix) accordance with their terms, of the Company Disclosure Letter liabilities disclosed, reflected or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to or incurred since the date hereof and, in each case, of such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries financial statements in the ordinary course of business, (B) or cancel any abandonment indebtedness in excess of Intellectual Property that the Company or any Subsidiary determines $50,000 individually and $500,000 in the exercise of its reasonable business judgment to abandon in the ordinary course of business, aggregate; (Cxvi) dispositions of obsolete or worthless assets, (D) non-renewal of take any lease of real property action that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) would reasonably be expected to: (A) grantprevent, increase impair or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of materially delay the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers ability of the Company, in Parent or Merger Sub to consummate the ordinary course of business consistent with past practice Merger or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in cause any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in conditions to the case of employees or consultants who are not executive officers consummation of the Company, in the ordinary course of business consistent with past practice or as is Merger not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiariessatisfied; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into make or change any transaction with Tax election, file any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material amended Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practiceReturn, enter into any Contract that would have been closing agreement, settle or compromise any liability with respect to Taxes, agree to any material adjustment of any Tax attribute, file any claim for a Material Contract had it been entered into prior refund of Taxes, or consent to this Agreement any extension or waiver of the limitation period applicable to any Tax claim or assessment; or (bxviii) other than agree in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien writing or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do take any of the foregoingforegoing actions.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Sources: Agreement and Plan of Merger (DRS Technologies Inc)
Interim Operations. (a) Except as (x) required by applicable LawPrior to the Effective Time, (y) unless Parent has otherwise expressly required by this Agreement or (z) otherwise set forth consented in Section 6.1 of the Company Disclosure Letterwriting thereto, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms Company:
(unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company i) shall, and shall cause each of its Subsidiaries and each of the Investment Companies to, conduct its operations according to their usual, regular and ordinary course in substantially the same manner as heretofore conducted;
(ii) shall use its reasonable best efforts, and shall cause each of its Material Subsidiaries and each of the Investment Companies to use its reasonable best efforts, to preserve intact their business in organizations and goodwill, keep available the ordinary course consistent services of their respective officers and employees and maintain satisfactory relationships with past practice those persons having business relationships with them;
(iii) shall not, and in compliance with all applicable Laws andshall cause its Material Subsidiaries not to, to the extent consistent therewith, it amend their respective Certificates of Incorporation or Bylaws or comparable governing instruments;
(iv) shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality each of the foregoing and in furtherance thereofInvestment Companies to, from the date promptly notify Parent of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (Ax) required by applicable Law or as contemplated by the Scheme Document Annexany Company Material Adverse Effect, (By) otherwise expressly required by this Agreementany litigation matter relating to an amount in excess of $500,000, governmental complaints, investigations or hearings (C) Buyer or communications indicating that the same may approve in writing (such approval not to be unreasonably withheldcontemplated), delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwisez) any corporation, partnership or other business organization or any assets constituting a division or business line material breach of any Person representation or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)warranty contained herein;
(v) make or forgive shall, upon receiving any loans, advances or capital contributions to or investments in written notice from any Person (other than Taxing authority proposing any adjustment to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit relating to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreementgive prompt written notice thereof to Parent, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness which notice shall describe in an amount not to exceed an aggregate principal amount of $15 milliondetail each proposed adjustment;
(ixvi) shall not authorize promptly deliver to Parent true and correct copies of any report, statement or make any capital expenditures in excess schedule filed with the SEC subsequent to the date of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwisethis Agreement;
(xvii) make any material changes with respect to any method of Tax or financial accounting policies or proceduresshall not, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, and shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or not permit any of its Subsidiaries other than settlements to, authorize, propose or compromises of announce an intention to authorize or propose, or enter into an agreement with respect to, any litigationmerger, audit, claim, action consolidation or other Proceedings where business combination (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment Merger), any acquisition of money damages;
(xii) assets or securities other than in the ordinary course of business, any disposition of assets or securities other than in the ordinary course of business or to the extent required by Law, make any release or relinquishment of any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (contract rights other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xivviii) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiaryof its Subsidiaries to, without the prior written consent of Buyer, to issue any new shares of its capital stock or securities convertible into or exchangeable or exercisable for shares of its capital stock, except upon exercise of options outstanding on the date of this Agreement under the Company RSUs (including Phantom Stock Option Plans or granted pursuant to the terms of the Stock Option Agreement to purchase shares of Company RSUs)Common Stock, optionsor effect any stock split, reverse stock split, stock appreciation rightsdividend, performance unitssubdivision, restricted shares (or equity) or other equity-based or equity-related awards reclassification, combination, exchange, or other similar arrangementstransaction with respect to any shares of its capital stock or other ownership interests, or otherwise change its capitalization;
(xvix) grant a license of any material Intellectual Property owned by the Company or shall not, and shall not permit any of its Subsidiaries to, grant, confer or award any options, warrants, conversion rights or other than in rights, not existing on the ordinary course of business consistent with past practice;
(xvi) allow date hereof, to acquire any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise shares of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (capital stock or other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations securities of the Company or any of its Subsidiaries;
(ax) other than new Contracts shall not, and shall not permit any of its Subsidiaries to, take or fail to take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as a reorganization with customers the meaning of Section 368(a) of the Code;
(xi) except pursuant to (i) applicable law, (ii) the terms of pre-existing contractual arrangements or suppliers in policies or (iii) the ordinary course of business consistent with past practice, enter into shall not, and shall not permit any Contract that would have been a Material Contract had it been entered into prior of its Subsidiaries to, amend the terms of any Company Plan, including, without limitation, any employment, severance or similar agreements or arrangements in existence on the date hereof, or adopt any new employee compensation or benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements, or change in any respect any vesting schedule with respect to this Agreement any Company Plan or grant or award thereunder, or grant any salary increases to any employee of the Company or any Subsidiary;
(bxii) other than except in the ordinary course of business consistent with past practice practice, shall not, and shall not permit any of its Subsidiaries to, (x) incur, create, assume or expirations otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contractother individual, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” 32 37 corporation or other shareholder rights plan entity, (y) make any loans or otherwise issue advances to any Rights other person or (as defined in the Company’s current articles of associationz) or similar interests or rights); or
(xxv) agree, authorize or commit to do subject any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take its property or assets, or permit any of their its property or assets to be subjected, to any lien, claim or encumbrance of any kind;
(xiii) shall not, and shall not permit any of its Subsidiaries to, (x) change any practice with respect to Taxes, (y) make, revoke or change any election with respect to Taxes or (z) settle or compromise any Tax liability;
(xiv) shall not (y) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock (other than regular quarterly cash dividends payable on Company Common Stock in an amount not to exceed $0.06 per share) or other ownership interests or (z) redeem, purchase or otherwise acquire any shares of its capital stock, or make any commitment for any such action;
(xv) shall not, and shall not permit any of its Subsidiaries to, agree, in writing or otherwise, to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreementforegoing actions or take any action which would make any representation or warranty in Article 3 hereof untrue or incorrect.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Sources: Merger Agreement (Mony Group Inc)
Interim Operations. During the period from March 31, 1998 and continuing until the Closing:
(a) Except The Shareholders agree (except as (x) required expressly contemplated by applicable Lawor disclosed within this Agreement, (y) otherwise expressly required by this Agreement including any Exhibits and Schedules hereto, or (z) otherwise set forth in Section 6.1 of to the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless extent that Buyer shall otherwise approve consent in writing, such approval not ) that as to be unreasonably withheld, delayed or conditioned), the Company:
(1) The Company shall, and shall cause carry on its Subsidiaries to, conduct their business in the usual, regular and ordinary course consistent with past practice and in compliance with all applicable Laws substantially the same manner as heretofore conducted and, to the extent consistent therewithwith such business, it shall, and shall cause its Subsidiaries, to use their respective all reasonable best efforts to preserve their material intact its present business organizations intact organization,
(2) The Company shall not and maintain shall not propose to: (a) declare, set aside or pay any dividend, on, or make other distributions in all material respects existing relations respect of, any of its capital stock, or purchase or redeem any shares of its capital stock other than a cash dividend to be distributed to the Shareholders in an amount equal to the Shareholders' liability for federal and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting state taxes on the generality earnings from operations of the foregoing and Company during 1998 through the Closing Date (exclusive of any income or gain on sale associated with the transactions covered by this Agreement) as more fully described at Section 5.4 hereafter; (b) split, combine or reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities in furtherance thereofrespect of, from the date in lieu of this Agreement until the earlier or in substitution for shares of the Effective Time its capital stock; (c) redeem, repurchase or the termination otherwise acquire any shares of this Agreement in accordance with its terms, except as capital stock; or (Ad) required by applicable Law or otherwise change its capitalization.
(3) Except as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, the Company shall not sell, issue, pledge, authorize or propose the sale or issuance of, pledge or purchase or propose the purchase of, any shares of its capital stock of any class or securities convertible into, or rights, warrants or options to acquire, any such shares or other convertible securities.
(C4) Buyer may approve The Company shall not amend its articles of incorporation or its Bylaws.
(5) The Company shall not sell, lease, pledge, encumber or otherwise dispose of or agree to sell, lease, pledge, encumber or otherwise dispose of, any of its assets that are material except in writing the ordinary course of business consistent with prior practice and in no event amounting in the aggregate to more than $75,000.
(6) The Company shall not incur any indebtedness for borrowed money or guarantee any such approval not to be unreasonably withheld, delayed indebtedness or conditioned) issue or (D) as set forth in Section 6.1 sell any debt securities of the Company Disclosure Letter, or guarantee any debt securities of others other than in the Company will not ordinary course of business consistent with prior practice and will cause its Subsidiaries not to:in no event (disregarding for these purposes ordinary trade accounts payable and operating accruals) amounting in the aggregate to more than $75,000.
(i7) The Company shall not adopt or amend in any material respect any collective bargaining agreement or otherwise changeEmployee Benefit Plan.
(8) The Company shall not grant to any Shareholder-employee any increase in compensation or in severance or termination pay, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct employment agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;executive officer.
(iii9) The Company shall not acquire (by merger, scheme of arrangement, consolidation, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfersubdivision thereof, or authorize the issuance, sale, pledge, encumbrance or subjecting to make any Lien, disposition, grant or transfer investment by either purchase of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company securities, contributions to the Company or another wholly owned Subsidiary capital, property transfer or, except in the ordinary course of business and in a manner that would not have business, purchase of any material Tax consequences);property or assets, of any other individual or entity.
(v10) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the The Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax tax election or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigationmaterial federal, auditstate, claim, action local or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal foreign tax liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;.
(xii11) The Company shall not waive, release, grant or transfer any rights of material value or modify or change in any material respect any Material Contract other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, .
(C12) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the The Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) agreement or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit arrangement to do any of the foregoing.
(b) Neither Buyer nor . The Company shall knowingly not take any action, or permit any of their Subsidiaries fail to take any action action, that is reasonably likely to prevent or materially interfere with the consummation result in any of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each representations and warranties of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described set forth in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed this Agreement becoming untrue in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property imaterial respect.
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of prior to the Effective Time or the earlier termination of this Agreement in accordance with its terms (unless Buyer Acquiror shall otherwise approve in advance in writing, such which approval shall not to be unreasonably withheld, delayed withheld or conditioned)delayed) and except as otherwise expressly contemplated by this Agreement or required by applicable Laws, the Company shall, business of it and shall cause its Subsidiaries to, conduct their business shall be conducted in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shallcourse, and it and its Subsidiaries shall cause its Subsidiaries, to use their respective all commercially reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, key employees and business associatesassociates and keep available the services of its and its Subsidiaries’ present directors, officers and key employees. Subject to the other provisions of this Section 6.01, during the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, the Company shall use all reasonable best efforts to continue to qualify as a REIT for U.S. federal income tax purposes. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the earlier termination of this Agreement in accordance with its termsAgreement, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (CB) Buyer as Acquiror may approve in advance in writing (such approval not to be unreasonably withheld, delayed withheld or conditioneddelayed) or (DC) as set forth in Section 6.1 6.01 of the Company Disclosure Letter, the Company it will not and will cause not permit its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, incorporation or bylaws or other applicable governing documentsinstruments (whether by merger, consolidation or otherwise);
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate itself or any of its Subsidiaries with any other Person Person, or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiariesliquidate;
(iii) acquire acquire, purchase or lease (in each case, whether by merger, scheme of arrangement, consolidation, acquisition of stock consolidation or assets or otherwiseby any other manner) any corporationbusiness or Person or, partnership or other business organization or outside the ordinary course of business, any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement(including securities);
(iv) issue, sell, pledge deliver or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transferamend, or authorize or propose the issuance, sale, pledgedelivery or amendment of, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of its capital stock or of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary shares by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case other than Common Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares issuable pursuant to the Company ESPP, but only with respect to elections made prior to Options outstanding on the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company Stock Plans or under the ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company it (other than Angle Capital Holdings, Inc.) or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect distributions made pursuant to the voting of its capital stock or other equity interestsSection 6.01(b)(i), if applicable);
(viivi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (it being understood that the net settlement of Company Securities or Awards including any Other Subsidiary Securities (other than the acquisition deemed purchase of any Ordinary Common Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUstherewith shall not be covered by this clause (vi));
(viiivii) incur any Indebtedness indebtedness for borrowed money or guarantee such Indebtedness indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)Person, or issue or sell any debt securities (including without limitation securities issued in any form, debt or warrants otherwise, in connection with securitization transactions) or other rights to acquire any of its debt security securities or of any of its Subsidiaries, other than (A) advances in the ordinary course pursuant to warehouse lines of credit or other interim financing arrangement set forth in Section 6.01(a)(vii) of the Company Disclosure Letter, or any renewal or replacement thereof, including any renewal or replacement of the existing warehouse line of credit with ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, N.A. scheduled to expire August 23, 2006, but subject to the restrictions set forth in Section 6.14 of this Agreement, (B) the issuance of the amount necessary for the Company to maintain its status as a REIT, which amount the Company currently believes to be $1.1 billion, in asset-backed securities in owner trust securitizations, subject to the requirements set forth in Section 6.01(a)(vii) of the Company Disclosure Letter, provided that such securitizations will be structured as one or more “taxable mortgage pools” within the meaning of Section 7701(i) of the Code and all of the retained interests with respect thereto will be retained by the Company or a QRS of the Company (other than any interests with respect to which the issuer of such interest has obtained an opinion that such interest constitutes indebtedness for U.S. federal income tax purposes), and (C) borrowings between or among the Company and any of its wholly-owned Subsidiaries or between or among the wholly-owned Subsidiaries;
(viii) except as contemplated by the capital expenditure budget for the Company or any of its Subsidiaries that is attached to Section 6.01(a)(viii) of the Company Disclosure Letter, make or authorize any material capital expenditure;
(ix) enter into any of the following (each, a “Material Contract”):
(A) any lease of any real property or any lease of personal property providing for annual rentals of $500,000 or more;
(B) any material partnership, joint venture or other similar agreement or arrangement;
(C) any Contract required to be filed as an exhibit to the Company’s Annual Report on Form 10-K pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act;
(D) any non-competition Contract or other Contract that (1) purports to limit in any material respect either the type of business in which the Company or its Subsidiaries (or, after the Effective Time, Acquiror or its Subsidiaries) may engage or the manner or locations in which any of them may so engage in any business or any Person with whom the same might otherwise compete, (2) could require the disposition of any material assets or line of business of the Company or its Subsidiaries or, after the Effective Time, Acquiror or its Subsidiaries, (3) grants “most favored nation” or exclusivity status or rights that, following the Merger, would apply to Acquiror and its Subsidiaries, including the Company and its Subsidiaries or (4) prohibits or limits the rights of the Company or any of its SubsidiariesSubsidiaries to make, except for (A) Indebtedness for borrowed money under sell or distribute any products or services in any manner the revolving facility under the Company Credit Agreementsame shall see fit, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount use, transfer, license, distribute or enforce any of $15 milliontheir respective Intellectual Property rights;
(ixE) shall any Contract to which the Company or any of its Subsidiaries is a party containing a standstill or similar agreement pursuant to which the party has agreed not authorize to acquire assets or make securities of the other party or any capital expenditures in excess of $40 million in its Affiliates (other than two such agreements that the aggregate, except for Company terminated); or
(AF) expenditures set forth in any Contract between the current capital forecast set forth in Section 6.1(a)(ix) Company or any of its Subsidiaries and any director or officer of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents Person beneficially owning five percent or otherwisemore of the outstanding Shares;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP applicable generally accepted accounting principles or Law or by a Governmental EntityRegulation S-X under the Securities Act;
(xi) except with respect settle or offer or propose to settle (A) any litigation, audit, claim, action or other Proceeding related to Tax Returns before an arbitrator or a Governmental Entity for an amount in excess of $100,000 individually or $500,000 in the aggregate, (B) any Tax Liability Proceeding described in Section 6.01(a)(xi)(B) of the Company Disclosure Letter, other than as described therein, (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)C) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings stockholder Proceeding against the Company or any of its Subsidiaries other than settlements officers or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) directors or (BD) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior any Proceeding that relates to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damagestransactions contemplated hereby;
(xii) other than in the ordinary course of business business, amend, modify or to terminate any Material Contract, or cancel, modify or waive any debts or claims held by, or material rights or obligations under any Material Contract of, the extent Company or any of its Subsidiaries, except as otherwise permitted by this Section 6.01(a);
(xiii) make or change any material Tax election unless such election is (A) required by Law, (B) reasonably determined by the Company upon good faith consultation with Acquiror to be necessary or advisable to preserve the status (1) of the Company as a REIT or (2) of any Subsidiary of the Company as a partnership for federal income tax purposes, or as a qualified REIT subsidiary under Section 856(i) of the Code or a taxable REIT subsidiary under Section 856(l) of the Code, as the case may be, or (C) required pursuant to the terms of a securitization of which the Company or any of its Subsidiaries is the sponsor (in which case, the Company shall make any material Tax such election in a timely manner and shall inform Acquiror of such election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax);
(xiiixiv) take any action, or fail to take any action, which would reasonably be expected to cause (A) the Company to fail to qualify as a REIT, or (B) any of its Subsidiaries to cease to be treated as a partnership for federal income tax purposes, as a qualified REIT subsidiary under Section 856(i) of the Code or as a taxable REIT subsidiary under Section 856(l) of the Code, as the case may be;
(xv) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, product lines or businesses or of the Company or its Subsidiaries, with a value in excess including capital stock of $50 million in the aggregateany of its Subsidiaries, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers such transactions among the Company it and its wholly owned Subsidiaries and except for Liens pursuant to the Existing Financing Facilities or other credit facilities or new lines of credit or credit facilities permitted under this Section 6.01 or the sale, financing or securitization of mortgages, mortgage servicing rights and receivables arising from Servicing Advances in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent business, (A) grant any severance or termination pay, (B) increase or accelerate the compensation or benefits payable under any existing severance or termination pay agreement or arrangement, (C) enter into any employment, consultancy, bonus, severance, termination pay, retirement or other similar agreement or arrangement (or materially amend any such existing agreement or arrangement), (D) establish, adopt or amend (except as required by applicable Law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, incentive compensation, equity compensation or other material benefit plan or arrangement, (E) make any material increase in compensation or benefits, (F) hire or retain (or terminate the employment or other service of) any employee or independent contractor with past practice a base salary or expirations annual compensation, as applicable, over $200,000, (G) grant any equity compensation award (whether in the form of options, restricted stock, restricted units or otherwise) or (H) renew any previously terminated equity compensation plan (including the ESPP), other than, in the case of clauses (a), (b), (c), (e) or (f), any action that is in the ordinary course of business; provided, however, that in no event shall the Company or any Subsidiary take any of the foregoing actions for the benefit of any such Contract participant in the Company's 2005 Change-in-Control Plan.
(xvii) (A) enter into any derivative contract or instrument, other than for bona fide hedging purposes in the ordinary course of business consistent or (B) fail to follow the Company’s existing policies or procedures with past practice in accordance with the terms of such Contractrespect to managing its exposure to interest rate risk, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contractexcept as contemplated by Section 6.13;
(xxiiixviii) other than renewals amend any material Tax Return; settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to material Taxes; fail to timely file all Tax Returns; fail to timely pay any material Taxes; or change any of its methods of reporting income or deductions for U.S. federal income tax purposes from those employed in the ordinary course preparation of businessits U.S. federal income Tax Return for the taxable year ended December 31, amend2004;
(xix) take any action or omit to take any action that would reasonably be expected to result in any of the conditions to the Merger set forth in Article 7 not being satisfied;
(xx) acquire (however structured) “mortgage servicing rights” (each, modify, terminate, cancel an “MSR”) for a purchase price of more than $15 million in any one transaction or let lapse a material insurance policy $50 million for all such purchases in the aggregate; provided that all such acquisitions shall also be subject to the requirements set forth in Section 6.01(a)(xx) of the Company Disclosure Letter;
(or reinsurance policyxxi) or self-insurance acquire (however structured) loans through the conduit program of the Company or its and it Subsidiaries (collectively, the “Conduit Loans”) with an aggregate initial principal amount in effect as excess of $1.065 billion; provided that all such acquisitions shall also be subject to the requirements set forth in Section 6.01(a)(xxi) of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Company Disclosure Letter; or
(xxvxxii) agree, authorize or commit to do any of the foregoing.
(bi) Neither Buyer nor Notwithstanding anything to the contrary in this Agreement, prior to the Effective Time, the Company shall knowingly take may declare one or permit more dividends to its stockholders distributing (in the aggregate) cash in an amount of up to 95% of the Company’s estimated “real estate investment trust taxable income” (as such term is used in Section 857 of the Code) for the period beginning July 1, 2006 and ending on the earlier of the Effective Time or December 31, 2006, determined without regard to any tax deduction that may be available with respect to the payment or vesting of any restricted stock units or any payment to Employees or directors of the Company or of any of their Subsidiaries its Subsidiaries, whether pursuant to take any action an employment agreement, a change in control plan, or otherwise, to the extent that is reasonably likely to prevent such payment or materially interfere with the consummation vesting occurs as a result of the transactions contemplated by this Agreement. The amount of any such dividend or dividends shall be initially proposed by the Company, but shall be subject to the mutual agreement of the Company and Acquiror, provided that the Company and Acquiror (and their authorized representatives) agree to consult in good faith with respect to the determination of the amount of such dividend or dividends, and shall use their commercially reasonable best efforts to agree on such amount as quickly as is practicable. Any dividends declared pursuant to this Section 6.01(b)(i) shall be paid by the Company prior to the Effective Time.
(ii) In addition, the Company agrees that, on its U.S. federal income tax return (and any corresponding state or local income tax returns) for its taxable year ending December 31, 2005, pursuant to Section 858 of the Code the Company shall elect to designate such portion of the first regular quarterly dividend paid on the Common Shares in 2006 as paid with respect to such taxable year as is necessary to permit the Company to satisfy the minimum distribution requirement of Section 857(a) with respect to such taxable year (the “2005 Throwback Amount”), provided that the Company and Acquiror (and their authorized representatives) shall consult in good faith with respect to the determination of the 2005 Throwback Amount, and the Company's determination of the 2005 Throwback Amount shall be subject to the written approval of Acquiror (which approval shall not be unreasonably withheld or delayed).
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at Acquiror covenants and agrees that, after the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company date hereof and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing DateEffective Time or earlier termination of this Agreement (unless the Company shall otherwise approve in writing (which approval shall not be unreasonably withheld or delayed), certifying and except as otherwise expressly contemplated by this Agreement or as required by applicable Law), it will not and will not permit any of its Subsidiaries to take any action or omit to take any action that each such Subsidiary does not own any U.S. real property iwould reasonabl
Appears in 1 contract
Sources: Merger Agreement (Saxon Capital Inc)
Interim Operations. (a) Except as (x) required by applicable LawIn furtherance of, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letterand without limiting, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereofSection 6.2, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except (w) as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required contemplated by this Agreement, (Cx) Buyer as expressly required by applicable Law, (y) as Parent may approve in writing (such which approval shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or (Dz) as set forth in Section 6.1 6.3 of the Company MLP Disclosure Letter, each of the Company MLP Entities (and with respect to Section 6.3(a) below, GP Holdings) will not and will cause its not permit any of MLP’s Subsidiaries to, and GP Holdings will not permit any MLP Group Entity to, directly or indirectly:
(a) (i) amend issue (including issuing any certificate in connection therewith), grant, sell or otherwise changepermit to become outstanding, or authorize the creation of, any additional Equity Interests (whether “phantom” or otherwise) or any additional Rights, including transactions between or among the MLP Group Entities or (ii) certificate any existing Partnership Interests;
(b) (i) split, combine or reclassify any of its Equity Interests or issue or authorize or propose to amend the issuance of any other securities in respect of, in lieu of or otherwise change in substitution for its articles of associationEquity Interests, certificate of incorporation, bylaws or other applicable governing documents;
(ii) mergerepurchase, enter into any scheme of arrangement redeem or bid conduct agreement or other similar arrangementotherwise acquire, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or permit any of its Subsidiaries;
(iii) Subsidiaries to purchase, redeem or otherwise acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporationmembership, partnership or other business organization Equity Securities or any assets constituting a division or business line of any Person or any equity interests of any Person or (iii) enter into any joint venture Contract with respect to the voting of its Partnership Interests or similar arrangementother Equity Securities;
(ivc) issue, (i) sell, pledge transfer, lease, or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) encumber all or any portion of its Subsidiaries assets, business or any Company Securities or Other Subsidiary Securities (other than properties, except for (A) the issuance sales, transfers and dispositions of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereofobsolete or worthless equipment, (B) the issuance sales, transfers and dispositions of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof inventory and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary produced hydrocarbons in the ordinary course of business and in a manner that would or (C) sales, transfers, assignments, conveyances, abandonment, allowances to lapse, licenses, sublicenses, covenants not have any material Tax consequences);
(v) make to assert or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary disposals of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, Intellectual Property in the ordinary course of business consistent with past practice, (ii) acquire, by merger or otherwise, or lease any assets or securities or all or any portion of the business or property of any other Person, other than (x) acquisitions of goods and services in the ordinary course of business consistent with past practice and (y) acquisitions pursuant to which the aggregate value exchanged or purchase price paid or payable by any MLP Group Entity would not exceed $2,000,000 in the aggregate, (iii) merge, consolidate or enter into any other business combination transaction with any Person or (iv) convert from any one form of business entity to any other form of business entity;
(vid) declare, set aside, make or pay any dividend declare dividends or other distribution, payable distributions to the Unitholders or holders of Phantom Units (whether in cash, stockassets, property stock or otherwiseother securities of any MLP Group Entity or of any other Person), other than (i) regular quarterly cash distributions to the Unitholders and holders of Phantom Units declared and made in accordance with and subject to the limitations of Annex VI of the MLP Disclosure Letter and (ii) a one-time cash distribution to the Unitholders and holders of Phantom Units declared in accordance with and subject to the limitation of Annex VI of the MLP Disclosure Letter and made in accordance with the provisions of this Agreement;
(e) amend any MLP Charter Document, the MLP GP LLC Agreement or any similar governing document of any of the MLP Group Entities;
(f) (i) enter into any Contract that would have been an MLP Material Contract if in effect on the date of this Agreement, (ii) amend any Contract in existence on the date hereof that is not a Material Contract on the date hereof if, after giving effect to such amendment, it would be an MLP Material Contract or (iii) become a party to, establish or adopt any collective bargaining, union, labor or similar Contract;
(g) materially modify or amend, or waive or assign any material rights under, or terminate or assign, any MLP Material Contract;
(i) waive, release or assign its rights with respect to any Proceeding in which any of the MLP Group Entities are seeking monetary damages in excess of $2,000,000 or (ii) compromise, settle or agree to settle any Proceeding in which damages are being sought against any of the MLP Group Entities, other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that (A) involve only the payment of monetary damages not in excess of $5,000,000 individually or $10,000,000 in the aggregate and (B) do not involve any imposition of equitable relief on, or any admission of wrongdoing or, in the context of any actual or potential violation of any Criminal Law, any nolo contendere or similar plea by, any MLP Group Entity;
(i) (i) implement or adopt any change in its GAAP accounting principles, practices or methods, other than as may be required by GAAP or SEC rules and regulations or (ii) write up, write down or write off the book value of any assets, except in accordance with GAAP consistently applied;
(j) fail to use reasonable best efforts to maintain, with financially responsible insurance companies, insurance in such amounts and against such risks and losses as is maintained by it on the date of this Agreement;
(k) (i) change in any material respect any of its shares express or deemed elections relating to Taxes, including elections for any and all Subsidiaries or other equity interests investments where it has the capacity to make such binding election, (ii) settle or compromise any material Proceeding relating to Taxes or (iii) change in any material respect any of its methods of reporting income or deductions for federal income Tax purposes from those employed in the preparation of its federal income Tax Return for the most recent taxable year for which a return has been filed, except for cash dividends paid as may be required by applicable Law;
(l) except as expressly required by the terms of any direct or indirect wholly owned Subsidiary to MLP Benefit Plan as in effect on the Company or to any date hereof, (i) other direct or indirect wholly owned Subsidiary than in the ordinary course of business consistent with past practice) , increase or enter into any agreement with respect accelerate the payment or vesting of the compensation, benefits or rights payable to the voting of its capital stock or other equity interests;
(vii) reclassifyaccrued for, split, combine, subdivide or redeem, purchase to become payable to or otherwise acquire, directly or indirectlyaccrued for, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees employee, officer, individual manager or directors in order to pay Taxes in connection with the vesting director of Company RSUs);
any MLP Group Entity or any of their beneficiaries, (viiiii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company other than in the ordinary course of business and consistent with past practice, grant any severance or termination pay to any employee, officer, individual manager or director of any MLP Group Entity, (iii) establish, adopt, enter into, amend or terminate any MLP Benefit Plan, (iv) other than in a manner that would not have the ordinary course of business consistent with past practice, grant, pay, award or accelerate the vesting of, or commit to grant, pay, award or accelerate the vesting of, any bonuses or incentive compensation, any equity-based awards or any other compensation, (v) fund any rabbi trust or similar Contract, (vi) other than in the ordinary course of business consistent with past practice, terminate the employment or services of any officer or other employee whose target annual base compensation is greater than $100,000, other than for cause, (vii) forgive any loans of any current or former employee, manager, officer, director or consultant of any MLP Group Entity or GP Holdings, (viii) hire any officer, employee, independent contractor or consultant whose target annual base compensation is greater than $200,000 or (ix) enter into or modify or amend any indemnification or similar Contract with any current or former employee, individual manager, officer or director;
(m) (i) (A) incur, assume, guarantee or otherwise become liable, directly, contingently or otherwise, for any (1) Indebtedness under clause (a), (b) or (e) of the definition of Indebtedness (other than any borrowing or draws under existing revolving credit facilities in the ordinary course of business consistent with past practice), (2) Indebtedness under clause (c) of the definition of Indebtedness (other than standby letters of credit for collateral support) or (3) Indebtedness under clause (d) of the definition of Indebtedness, if in excess of $5,000,000 or (B) prepay or repurchase any Indebtedness prior to the stated maturity thereof, (ii) enter into any material Tax consequenceslease (whether operating or capital), (iii) create any Lien (other than Permitted Liens) on its property or the property of its Subsidiaries in connection with any pre-existing Indebtedness, new Indebtedness or lease, (iv) make or commit to make any capital expenditures, other than such capital expenditures as are required on an emergency basis or for the safety of individuals, assets or the environment, (v) issue or sell any debt securities or warrants or other rights to acquire any debt security of any MLP Group Entity, (vi) enter into any “keep well” or other Contract to maintain any financial statement condition of another Person or (vii) enter into any Contract having the Company or economic effect of any of its Subsidiariesthe foregoing;
(n) restructure, except for reorganize or liquidate all or a material part of any MLP Group Entity’s assets or authorize, recommend, propose or announce an intention to adopt a plan of complete or partial dissolution or liquidation;
(Ao) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreementmake any loans, advances or capital contributions to, or investments in, any Person, other than (Bi) loans travel, relocation expenses and similar expenses or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2ii) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made trade credit granted in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xvp) grant a license of enter into any material Intellectual Property owned by the Company new Contract to sell propylene, produced hydrocarbons or any of its Subsidiaries other substances other than in the ordinary course of business consistent with past practice;
(xviq) allow any lapse implement or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) otherwise enter into any transaction derivative security with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) respect to hydrocarbon production or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew marketing or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its SubsidiariesDerivative Transaction;
(ar) (i) engage in the production of any chemical, petrochemical or produced hydrocarbon other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than those produced in the ordinary course of business consistent with past practice or expirations (ii) materially deviate from the operating practices or production schedule of the Facility, including implementing or announcing any such Contract plant closing, material reduction in the ordinary course labor force or other material layoff of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien employees or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contractservice providers;
(xxiiis) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is intended or would reasonably likely be expected to prevent or materially interfere with the consummation result in any of the transactions contemplated by this Agreement.conditions set forth in Article VII not being satisfied;
(ct) The Company shall use its reasonable efforts to cause convene any meeting, special or otherwise (or any adjournment or postponement thereof), of the Unitholders;
(u) enter into any transactions or Contracts with any Affiliate or other Person that would be required to be delivered to Buyer at the Closing (i) executed affidavits dated as disclosed by MLP under Item 404 of Regulation S-K of the Closing Date SEC;
(v) conduct the businesses of any MLP Group Entity in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying a manner that would cause any MLP Group Entity to become an interest in each of “investment company” subject to registration under the Investment Company and Arris US Holdings Inc. is not, and has not been within the five Act; or
(5w) year period described in Section 897(c)(1agree or commit to do anything prohibited by clauses (a) through (v) of the Code, a U.S. real property interest within the meaning of this Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i6.3.
Appears in 1 contract
Sources: Merger Agreement (PetroLogistics LP)
Interim Operations. (a) Except The Company covenants and agrees as to itself and its Subsidiaries that, during the Effective Period, except (xi) required by applicable Law, (y) as otherwise expressly required or contemplated by this Agreement or the Restructuring Term Sheet, (zii) otherwise set forth as required by applicable Law (including the Bankruptcy Code) or (iii) as consented to in Section 6.1 of writing by the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms DIP Agent (unless Buyer which consent shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), (x) the Company shall, and Business shall cause its Subsidiaries to, conduct their business be conducted in the ordinary course of business consistent with past practice and in compliance accordance with all applicable Laws and, to Law and (y) the extent consistent therewith, it shall, Company and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve intact the Business and their material business organizations intact and maintain in all material respects existing relations and goodwill relationship with Governmental Entities, customers, suppliers, distributors, wholesalers, retailers, employees and business associates. Governmental Entities.
(b) Without limiting the generality of the foregoing of, and in furtherance thereofof, from the date of foregoing, during the Effective Period, except (x) as otherwise expressly required or contemplated by this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsRestructuring Term Sheet, except (y) as (A) required by applicable Law (including the Bankruptcy Code) or (z) as contemplated consented to in writing by the Scheme Document Annex, DIP Agent (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval which consent shall not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letterdelayed), the Company will shall not, and shall not and will cause permit any of its Subsidiaries not to, directly or indirectly:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, the certificate of incorporation, bylaws or other applicable governing documentsorganizational documents of the Company or its Subsidiaries;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesSubsidiaries or otherwise enter into any agreements providing for the sale of their respective material assets, operations or business;
(iii) acquire (by merger, scheme assets outside of arrangement, consolidation, acquisition the ordinary course of stock or assets or otherwise) business from any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementPerson;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer or transfer of encumbrance of, any shares of capital stock or Equity Interests of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock or Equity Interests, or any options, warrants or other rights of any kind to acquire any of the ordinary course of business and in a manner that would not have any material Tax consequences)foregoing;
(v) make incur, create or forgive assume any loans, advances or capital contributions to or investments in any Person Encumbrance (other than to Permitted Encumbrances) on any direct properties or indirect wholly owned Subsidiary assets, tangible or intangible, of the Company in the ordinary course or any of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceits Subsidiaries;
(vi) (A) incur, assume or guarantee any Indebtedness or capitalized lease obligations or issue any debt securities or (B) make any loans, advances, guarantees or capital contributions to, or investments in, any other Person;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares capital stock or other equity interests Equity Interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practiceSubsidiary) or enter into any agreement with respect to the voting of its capital stock or Equity Interests (other equity intereststhan this Agreement);
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities stock or Equity Interests or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities (other than of the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs)foregoing;
(viiiix) incur except in accordance with the Budget (as defined in the DIP Orders), make or authorize any Indebtedness or guarantee such Indebtedness of another Person capital expenditure;
(except with respect x) enter into any Contract that would have been a Material Contract had it been entered into prior to obligations of wholly owned Subsidiaries of the Company this Agreement;
(xi) other than in the ordinary course of business and business, cancel or terminate (other than, for the avoidance of doubt, any expiration in a manner that would not have any material Tax consequencesaccordance with its terms), or issue modify or sell amend in any debt securities material respect, or warrants or other waive any material rights to acquire under, any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 millionMaterial Contract;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(xxii) make any material changes with respect to any method of Tax or financial material accounting policies or procedures, except as required by changes in GAAP or applicable Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of TaxGAAP;
(xiii) settle or compromise any (A) Cause of Action (other than settlements involving only unsecured claims with an allowed amount of less than one hundred thousand dollars ($100,000)), or (B) Patent-related Cause of Action involving any of the Company Intellectual Property;
(xiv) transfer, assign, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien grant any license (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries granted in the ordinary course of business) with respect to, (B) any abandonment of Intellectual Property that or, to the Company or any Subsidiary determines in extent within the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee control of the Company or any of its Subsidiaries, exceptabandon or permit to lapse, in the case of employees who are not executive officers of the Company, any material Company Intellectual Property;
(xv) terminate or fail to renew any material Business Permit;
(xvi) other than in the ordinary course of business consistent business, sell, pledge, dispose of, transfer or authorize the sale, pledge, disposition or transfer of any assets or properties of the Company or its Subsidiaries;
(xvii) grant any material licenses, sublicenses, covenants not to assert or similar rights with past practice respect to any assets or properties, whether tangible or intangible, of the Company or its Subsidiaries;
(xviii) fail to use commercially reasonable efforts to maintain the Insurance Policies or to renew or replace the Insurance Policies following their termination;
(xix) except as required by agreements, plans, programs or arrangements pursuant to the terms of any Debtor Plan in effect on as of the date hereofof this Agreement, the Approved ▇▇▇▇ or the Approved KERP, (BA) increase in any manner the compensation, bonus consulting fees, incentive, bonus, retirement, welfare, fringe or benefits ofother benefits, severance or make, grant termination pay of any employee or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practiceindependent contractor, (CB) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereofbecome a party to, establish, adopt, amend, commence participation in or terminate any Debtor Plan or any arrangement that would have been a Debtor Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any Benefit Plan outstanding awards, under any Debtor Plan, (other than routine changes D) take any action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or equity for the benefit of benefits under any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof)Debtor Plan, (DE) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Debtor Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP, (F) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any employee, (G) hire any employee or engage any independent contractor (who is a natural person) other than the engagement of independent contractors to fill vacancies or staff currently existing or contemplated projects to the extent not currently staffed or (EH) except as required by Lawterminate the employment of any officer other than for cause other than any officer who was provided with written notice of termination prior to the date of this Agreement and who is listed on Section 7.1(b)(xix) of the Company Disclosure Letter;
(xx) become a party to, establish, adopt, enter into amend, commence participation in or amend terminate any collective bargaining agreement, agreement or other agreement with a labor union, plan, trust, fund, policy works council or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsorganization;
(xvxxi) grant a license of (A) change in any material Intellectual Property owned by respect any material method of accounting of the Company or any of its Subsidiaries for Tax purposes; (B) enter into any agreement with any Taxing Authority (including a “closing agreement” under Code Section 7121) with respect to any material Tax or Tax Returns of the Company or its Subsidiaries; (C) surrender a right of the Company or its Subsidiaries to a material Tax refund; (D) change an accounting period of the Company or its Subsidiaries with respect to any material Tax; (E) file an amended Tax Return; (F) change or revoke any material election with respect to Taxes; (G) make any material election with respect to Taxes that is inconsistent with past practice; (H) file any Tax Return that is inconsistent with past practice; (I) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment (other than in the ordinary course of business consistent with past practicebusiness); or (J) take any action (or fail to take any action) that would result in a loss of any material Tax losses, credits or other attributes that may be used to reduce Tax liabilities;
(xvixxii) allow revalue any lapse assets or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program properties of the Company or its Subsidiaries in effect as of (including Inventory), except to the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten extent required by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)GAAP; or
(xxvxxiii) agree, authorize or commit commit, in writing or otherwise, to do take any of the foregoingforegoing actions.
(bc) Neither Buyer nor Company The Supporting Lenders shall not knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with impede the consummation of the transactions contemplated by this AgreementTransactions.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Sources: Restructuring Support Agreement (Endologix Inc /De/)
Interim Operations. Except (a) Except as (x) required by applicable Law, (y) otherwise expressly required or permitted by this Agreement or as required by Law, (zb) otherwise as Parent may approve in writing or (c) as set forth in Section 6.1 6.01 of the Company Community Disclosure LetterSchedule, during the Company covenants and agrees that, after period from the date hereof and of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writingArticle 8, such approval not to be unreasonably withheld, delayed or conditioned), the Company Community shall, and shall cause each of its Subsidiaries to, (i) conduct their its business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations respects, (ii) use its commercially reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships, and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, creditors, lessors, officers and employees and business associatesassociates and keep available the services of Community and its Subsidiaries’ present employees and agents, (iii) maintain in full force and effect insurance comparable in amount and scope of coverage to that now maintained by it, and (iv) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of either Community or Parent to obtain any necessary approvals of any Governmental Authority required for the transactions contemplated hereby or to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsArticle 8, except as (A) as otherwise expressly required or permitted by this Agreement or as required by applicable Law or as contemplated by the Scheme Document AnnexLaw, (B) otherwise expressly required by this Agreement, (C) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (DC) as set forth in Section 6.1 6.01 of the Company Community Disclosure LetterSchedule, the Company will Community shall not and will cause shall not permit any of its Subsidiaries not to:
(i) amend Issue, sell or otherwise changepermit to become outstanding, or dispose of or encumber or pledge, or authorize or propose to amend the creation of, any additional shares of its capital stock, or otherwise change securities convertible or exchangeable into, or exercisable for, any shares of its articles of associationcapital stock, certificate of incorporationor any options, bylaws warrants or other applicable governing documents;
(ii) merge, enter into rights of any scheme kind to acquire any shares of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of such capital stock or assets such convertible or otherwise) any corporation, partnership exchangeable securities or other business organization or any assets constituting receive a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through cash payment based on the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer value of any shares of such capital stock, (ii) permit any additional shares of its capital stock, or securities convertible or exchangeable into, or exercisable for, any shares of its capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities or receive a cash payment based on the value of the Company any shares of such capital stock, to become be subject to new grant, or (including Ordinary Sharesiii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its Subsidiaries stock or other securities.
(b) Make, declare, pay or set aside for payment any Company Securities dividend on or Other Subsidiary Securities (in respect of, or declare or make any distribution on any shares of its capital stock, other than (A) the issuance declaration and payment of Ordinary Shares upon the vesting of Company RSUs regular quarterly cash dividends not to exceed $0.50 per share made by Community to its shareholders on such payment dates (and based on such dividend equivalents thereon, if applicablerecord dates) outstanding prior to the date hereof, as are consistent with Community’s past practice.
(Bc) the issuance of Ordinary Shares pursuant to the Company ESPP, but only Except with respect to elections contracts relating to loans made prior in the ordinary course of business, amend or modify the material terms of, waive, release or assign any rights under, terminate, renew or allow to renew automatically, make any payment not then required under, fail to comply with or violate the date hereof and only terms of or enter into (i) any Material Contract, Lease, Regulatory Agreement, CRA Agreement, or any Contract that would be a Material Contract if it were in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of existence on the date hereof or other binding obligation that is material to Community and its Subsidiaries, taken as a whole, (Dii) any restriction on the issuance ability of Community or transfer its Subsidiaries to conduct its business as it is presently being conducted or (iii) any Contract governing the terms of common Community Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness, in each case which is not terminable at will or within sixty (60) calendar days or less notice without payment of any amount other equity interests by a wholly owned Subsidiary than for products delivered or services performed through the date of termination.
(d) Except as Previously Disclosed on Section 6.01(d) of the Company Community Disclosure Schedule, sell, transfer, mortgage, lease, guarantee, encumber, license, let lapse, cancel, abandon or otherwise create any Lien on or otherwise dispose of or discontinue any of its assets, deposits, business or properties (other than sales pursuant to Section 6.01(p), which Section 6.01(p) will exclusively govern such sales), except for sales, transfers, mortgages, leases, guarantees, encumbrances, licenses, lapse, cancellation, abandonments or other dispositions or discontinuances in the Company ordinary course of business consistent with past practice and in a transaction that, together with other such transactions, does not exceed $100,000.
(e) Acquire (other than by way of foreclosures or another wholly owned Subsidiary acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business) all or any portion of the assets, business, deposits or properties of any other entity, except in the ordinary course of business and in a manner that transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and would not have reasonably be expected to present a material risk that the Closing Date will be materially delayed or that any material Tax consequences);requisite regulatory approvals will not be obtained.
(vf) make Amend the Community Articles or forgive any loansthe Community Bylaws, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary similar governing documents of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares Subsidiaries.
(g) Except as and when required under applicable Law or the terms of any Employee Benefit Plan in effect as of the date hereof (taking into account actions required by Section 6.14) or as Previously Disclosed on Section 6.01(g) of the Community Disclosure Schedule:
(i) increase in any manner the compensation, bonus or pension, welfare, severance or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course benefits of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former directors, officers, employees or directors in order to pay Taxes in connection with the vesting other service providers of Company RSUs);
(viii) incur any Indebtedness Community or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for ordinary course merit-based increases in the base salary of employees (other than directors) consistent with past practice or as set forth in Section 6.01(g)(ii) below,
(ii) grant, pay or agree to pay any annual, quarterly, monthly or other bonus or other incentive compensation (excluding any severance, retention, retirement or termination pay, which shall be subject to clause (v) of this Section 6.01(g) below), other than:
(A) Indebtedness for borrowed money under any bonuses and other incentive compensation that are paid or payable by Community on a quarterly or monthly basis during the revolving facility under year ending December 31, 2018 consistent in all material respects with the Company Credit AgreementCommunity Incentive and Commission Plan, and
(B) loans any bonuses and other incentive compensation that are payable by Community on an annual basis for the year ending December 31, 2017, or advances to wholly owned Subsidiaries for services rendered by the employees Community identified on Section 6.01(g)(ii)(B) of the Community Disclosure Schedule between the date of this Agreement and (C) other Indebtedness in an amount not to exceed an aggregate principal amount the Effective Time of $15 million;
(ix) the Merger, shall not authorize or make any capital expenditures in excess of $40 million exceed, in the aggregate, except for the amounts accrued as of December 31, 2017 on the Community Financial Statements,
(Aiii) expenditures set forth become a party to, establish, amend, alter a prior interpretation of in a manner that enhances rights or materially increases costs, commence participation in, terminate or commit itself to the current capital forecast set forth adoption of any Employee Benefit Plan (including the Community Incentive and Commission Plan) or plan that would be an Employee Benefit Plan if in Section 6.1(a)(ix) effect as of the Company Disclosure Letter or (B) expenditures made in response to any emergencydate hereof, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, de minimis amendments in the ordinary course of business consistent with past practice or as required by agreementspursuant to the terms of such Employee Benefit Plan,
(iv) grant (or commit to grant) any new equity award,
(v) grant, planspay or increase (or commit to grant, programs pay or arrangements increase) any severance, retention, retirement or termination pay, other than pursuant to (i) the Employee Benefit Plans in effect on as of the date hereofhereof as listed on Section 6.01(g)(v)(i) of the Community Disclosure Schedule; and (ii) a pool for retention payments to the Community employees (other than any Community employee listed on Section 6.01(g)(ii)(B) of the Community Disclosure Schedule) by Community to be mutually agreed upon by the Parties in an amount not exceeding the amount set forth in Section 6.01(g)(v)(ii) of the Community Disclosure Schedule, and provided further that, except for those individuals and those amounts specifically set forth on
Section 6.01 (g)(v)(ii) of the Community Disclosure Schedule, no retention award or retention payment shall be made by Community pursuant to such retention pool unless the terms and conditions of such retention award and payment (including (A) the selection of each participant, (B) increase in any manner each participant’s proposed retention payment amount, (C) the compensation, bonus employment and other conditions that each participant must satisfy before payment is due and (D) the timing for each retention payment) have been approved by Parent,
(vi) accelerate the payment or benefits vesting of, or make, grant or amend in any lapsing of restrictions with respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any directorstock-based compensation (including the RSUs), consultant or employee of the Company long-term incentive compensation, deferred compensation or any bonus or other incentive or deferred compensation,
(vii) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Employee Benefit Plan,
(viii) terminate the employment or services of any executive officer other than for cause,
(ix) enter into any collective bargaining or other agreement with a labor organization,
(x) forgive or issue any loans to any current or former officer, employee or director of Community or its Subsidiaries, or
(xi) hire any officer, employee or other service provider except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice practices, including as a result of vacancies arising on or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on after the date hereof.
(h) Knowingly take, establishor omit to take, adoptany action that would prevent or impede, terminate or amend any Benefit Plan (other than routine changes could reasonably be expected to welfare plans prevent or impede, the Pension Plan made in Merger from qualifying as a “reorganization” within the ordinary course meaning of business consistent with past practiceSection 368(a) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;Code.
(xvi) grant a license of (i) Incur or guarantee any material Intellectual Property owned by the Company or any of its Subsidiaries indebtedness for borrowed money, other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business amounts and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers at maturities in the ordinary course of business consistent with past practice, enter into and provided further that the maturity period for any Contract that would have been such indebtedness shall not exceed a Material Contract had it been entered into prior to this Agreement period of ninety (90) days from the date of incurrence of such indebtedness or (bii) assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person (other than the endorsement of checks, commercial paper, bankers acceptances and bank drafts in the ordinary course of business consistent with past practice or expirations of practice).
(j) Enter into any such Contract in the ordinary course new line of business consistent or make any material change in any basic policies and practices with past practice respect to pricing or risk profile of loans, deposits and services, liquidity management and cash flow planning, marketing, deposit origination, lending, budgeting, profit and tax planning, personnel practices or any other material aspect of Community’s or its Subsidiaries’ business or operations, except as required by Law or requested by any Governmental Authority;
(i) Other than in accordance with the terms investment policies of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien Community or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect on the date hereof or in securities transactions as provided in (ii) below, make any investment either by contributions to capital, property transfers or purchase of any property or assets of any Person, (ii) other than purchases of direct obligations of the United States of America or obligations of United States government agencies which are entitled to the full faith and credit of the United States of America, in any case with a remaining maturity at the time of purchase of one year or less, purchase or acquire securities of any type; or (iii) materially change the composition of the Investment Securities in its securities portfolio, including any changes in the credit quality or the duration of the Investment Securities; provided, however, that in the case of Investment Securities, Community may purchase Investment Securities if, within two (2) Business Days after Community requests in writing (which request shall describe in detail the investment securities to be purchased and the price thereof) that Parent consent to making of any such purchase, Parent has approved such request in writing (which consent will not be unreasonably withheld) or has not responded in writing to such request.
(l) Except as set forth in Section 6.01(l) of the Community Disclosure Schedule, enter into any settlement, compromise or similar agreement with respect to, any action, suit, claim, proceeding, order or investigation to which Community or any of its Subsidiaries is or become a party after the date hereofof this Agreement, unless simultaneous which settlement, compromise, agreement or action, suit, claim, proceeding, order or investigation that is settled in an amount and for consideration not in excess of $100,000 individually or $250,000 in the aggregate and that would not (i) impose any material restriction on the business of the Surviving Corporation or (ii) create adverse precedent for claims that are reasonably likely to be material to it or its Subsidiaries taken as a whole.
(m) Other than as determined to be necessary or advisable by Community in the good faith exercise of its discretion based on changes in market condition and subject in any event to clause (u) below of this Section 6.01, alter materially its interest rate or pricing fee or fee pricing policies with respect to depository accounts of any of its Subsidiaries or waive any material fees with respect thereto.
(n) Except as required by applicable Law or by a Governmental Authority, (i) implement or adopt any material change in its interest rate and other risk management policies, procedures or practices or (ii) fail to follow in all material respects, Community’s or its applicable Subsidiary’s existing policies or practices with respect to managing its exposure to interest rate and other risk.
(o) Grant or commit to grant any new extension of credit to (i) any existing obligor, if such terminationextension of credit would equal or exceed (a) $5,000,000 if Community’s aggregate relationship exposure to such obligor, cancellation including as a result of such extension, is less than $15,000,000 or lapse(b) $2,500,000 if Community’s aggregate exposure to such obligor equals or exceeds, replacement policies underwritten by insurance and reinsurance companies or would equal or exceed, as a result of nationally recognized standing such credit extension, $15,000,000 or self-insurance programs, (ii) any new obligor if such extension of credit would equal or exceed $5,000,000 (in each case, providing coverage equal consent shall be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or greater than the coverage under the terminatedhis designee, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;notice of objection is not received by Community).
(xxivp) not exercise Sell any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement real estate owned, charge-off any “poison pill” or other shareholder rights plan (or otherwise issue assets, make any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agreecompromises on debt, authorize release any collateral on loans or commit to do any of the foregoing, if such sale, charge-off, compromise or release would exceed $250,000 in the aggregate (consent shall be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or his designee, notice of objection is not received by Community).
(bq) Neither Buyer nor Company Renew or commit to renew any extension of credit that would equal or exceed: (i) $500,000 if rated Substandard; (ii) $1,000,000 if rated Special Mention; (iii) $5,000,000 if rated Pass (including Pass/Watch); (iv) $2,500,000 if the aggregate relationship exposure equals or exceeds $15,000,000 (consent shall knowingly take be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or permit any his designee, notice of their Subsidiaries to take any action that objection is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated not received by this AgreementCommunity).
(cr) The Company shall use its reasonable efforts Purchase or commit to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own purchase any U.S. real property iLoan or participation
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the Company shall, business of it and shall cause its Subsidiaries to, conduct their business shall be conducted in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associatesassociates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of the foregoing foregoing, and in furtherance thereof, from the date of this Agreement hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (CB) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld, delayed withheld or conditioneddelayed) or (DC) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will shall not and will cause shall not permit its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws incorporation or by-laws or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, except for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any of agreements or arrangements imposing material changes or restrictions on its Subsidiariesassets, operations or businesses;
(iii) acquire (by mergerassets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $100,000 in any transaction or series of related transactions, scheme other than acquisitions pursuant to Contracts in effect as of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementthe date hereof;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee, or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary in Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except pursuant to the ordinary course exercise of business and in a manner that would not have any material Tax consequences)Warrants or Options as contemplated by this Agreement;
(v) make create or forgive incur any loans, advances or capital contributions Lien material to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course or any of business and in a manner that would its Subsidiaries not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, incurred in the ordinary course of business consistent with past practice;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $100,000 in the aggregate;
(vii) (A) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly wholly-owned Subsidiary; (B) repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities, except for any split, combination or reclassification of capital stock of a wholly-owned Subsidiary in of the ordinary course Company, or any issuance or authorization or proposal to issue or authorize any securities of business consistent with past practicea wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company, or (C) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness indebtedness for borrowed money or guarantee such Indebtedness indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness indebtedness for borrowed money under incurred in the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount ordinary course of business consistent with past practices not to exceed an aggregate principal amount of $15 million100,000 in the aggregate;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures as set forth in the current capital forecast budgets set forth in Section 6.1(a)(ix6.1(i)(ix) of the Company Disclosure Letter and consistent therewith, make or (B) expenditures made authorize any capital expenditure in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;excess of $200,000 in the aggregate
(x) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xi) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP applicable generally accepted accounting principles or Law or as recommended by a Governmental Entitythe Company’s independent public auditors;
(xixii) except with respect to settle any litigationactions, auditsuits, claimclaims, action hearings, arbitrations, investigations or other Proceeding related to Tax Returns proceedings before a Governmental Entity for an amount in excess of $100,000 or any obligation or liability of the Company in excess of such amount;
(xiii) amend, modify or terminate any Material Contract, or cancel, modify or waive any material debts or claims held by it or waive any material rights;
(xiv) (A) make, change, or rescind any material Tax Liability election, (which, for the avoidance B) file any material amended Tax Return of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries the Subsidiaries, (C) or adopt or change any material method or period of Tax accounting, (D) settle or compromise any material claim relating to Taxes; (E) surrender any claim for a refund of Taxes; (F) enter into any closing agreement relating to Taxes; (G) file any material Tax Return that is inconsistent with past practice; (H) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment (other than settlements or compromises pursuant to extensions of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior time to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than file Tax Returns obtained in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Taxbusiness);
(xiiixv) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines lines, businesses or businesses interests therein of the Company or its Subsidiaries, with a value in excess including capital stock of $50 million in the aggregateany of its Subsidiaries, except for (A) sales and non-exclusive licenses of products and in connection with services of the Company and its Subsidiaries provided in the ordinary course of businessbusiness and sales of obsolete assets and except for sales, (B) any abandonment leases, licenses or other dispositions of Intellectual Property that the Company or any Subsidiary determines assets with a fair market value not in excess of $100,000 in the exercise of its reasonable business judgment aggregate, other than pursuant to abandon Contracts in effect prior to the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of businessdate hereof;
(xivxvi) assign or grant an exclusive license of any material right in any Intellectual Property of the Company necessary or useful for the manufacture, use, sale, offer for sale or export of any Medical Device or that otherwise enables a third party to compete with the Company with respect to the manufacture or sale of any product that competes with any Medical Device;
(xvii) except as required pursuant to existing written, binding agreements in effect prior to the date hereof, as set forth in Section 5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (A) grant, increase grant or provide any retention, change of control, severance or termination payments or benefits to any director, consultant officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus bonus, pension, welfare, fringe, severance or other benefits of, or make, grant or amend in pay any respect any equity or equity-linked awards (including changing the vesting criteria thereof) bonus to, or grant make any new equity awards to any current or increase any bonuses to, any former director, officer, employee or consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereofbecome a party to, establish, adopt, commence participation in, amend or terminate any stock option plan or amend other stock-based compensation plan, or any Benefit Plan (compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other than routine changes to welfare plans employee benefit plan or the Pension Plan made in the ordinary course of business consistent agreement with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person current or funding former directors, officers, employees or consultants of the Company or its Subsidiaries (or newly hired employees) or amend the terms of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof)outstanding equity-based awards, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (E) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP; or (Evii) except as required by Law, establish, adopt, enter into forgive any loans or amend issue any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former loans to directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;.
(axviii) other than new Contracts with customers take any action or suppliers in the ordinary course of business consistent with past practice, enter into omit to take any Contract action that would have been a Material Contract had it been entered into prior reasonably be expected to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or result in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company Tender Offer Conditions or its Subsidiaries the conditions to the Merger set forth in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) Article VIII not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)being satisfied; or
(xxvxix) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Prior to making any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the Transactions, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time (but in any event no more than three (3) business days) to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Parent shall not knowingly take or permit any of their its Subsidiaries to take any action that is would reasonably likely be expected to prevent or materially interfere with the consummation of the transactions contemplated by this AgreementMerger.
(cd) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to any Medical Device, (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each any of the Company and Arris US Holdings Inc. is notor any of its Subsidiaries, and has not been within any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the five (5) year period described in Section 897(c)(1) FDA or any other Governmental Entity by or on behalf of any of the CodeCompany or any of its Subsidiaries, a U.S. real property interest within (iii) keep Parent promptly informed of (A) any communication (written or oral) with or from the meaning of Section 897(cFDA and any other Governmental Entity and (B) any material communications (written or oral) received from any Person relating to the Intellectual Property of the Code Company, (iv) promptly inform Parent and which sets forth provide Parent or Merger Sub with a reasonable opportunity (but no more than three (3) business days) to comment, in each case, prior to making any material change to any study protocol, adding any new trial, making any material change to a manufacturing plan or process, making any material change to a development timeline or initiating, or making any material change to, promotional or marketing materials or activities relating to any Medical Device, and (v) cooperate with, and provide reasonable access to, Parent’s representative for purposes of reviewing and assessing the Company’s compliance with any and Arris US Holdings Inc.’s nameall relevant Laws, address and taxpayer identification numbercompliance programs, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior procedures, and give due consideration to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iresulting recommendations provided by Parent’s representative.
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until prior to the earlier of the Effective Time or the termination of this Agreement in accordance with its terms Article VIII and the Effective Time (unless Buyer Parent shall otherwise approve in writing, writing (such approval not to be unreasonably withheld, delayed or conditioned)), and except as otherwise expressly required or permitted by this Agreement or as required by applicable Law, the Company shall, business of it and shall cause its Subsidiaries to, conduct their business shall be conducted in all material respects in the ordinary course consistent with past practice and in compliance with all applicable Laws of business and, to the extent consistent therewithwith the foregoing and the restrictions in the next sentence, it shall, the Company and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and substantially intact, maintain in all material respects existing relations and goodwill satisfactory relationships with Governmental Entities, customers, suppliers, employees and other business associatesrelationships having significant business dealings with them and keep available the services of their key employees and agents; provided that any action specifically permitted by the exceptions to the restrictions set forth in clauses (i) - (xviii) of this Section 6.1(a) shall be deemed in compliance with this sentence. Without limiting the generality of the foregoing and in furtherance thereofforegoing, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsArticle VIII and the Effective Time, except (w) as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required or permitted by this Agreement, (Cx) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), (y) as is required by applicable Law or (Dz) as set forth in Section 6.1 6.1(a) of the Company Disclosure Letter, the Company will not and will cause not permit its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise adopt any change in its articles of association, certificate of incorporation, incorporation or bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesSubsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company;
(iii) acquire (by merger, scheme of arrangement, consolidation, make any acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division in excess of $5,000,000 individually or $15,000,000 in the aggregate, other than acquisitions of assets acquired from the Company's or its Subsidiaries' vendors or suppliers in the ordinary course of business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementthe Company and its Subsidiaries;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any shares of capital stock or other equity securities of the Company (including Ordinary Shares) or any of its Subsidiaries or securities convertible or exchangeable into or exercisable for, or give any Company Securities Person a right to subscribe for or Other Subsidiary Securities acquire (including options, warrants or other rights of any kind), any shares of capital stock or other equity securities (other than (A) the issuance of Ordinary Shares upon the vesting in respect of Company Options, RSUs (and dividend equivalents thereon, if applicable) PSUs outstanding prior to as of the date hereof, of this Agreement as required by their terms as in effect on the date of this Agreement or (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in of the ordinary course of business and in a manner that would not have any material Tax consequencesCompany);
(v) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person in excess of $5,000,000 individually or $15,000,000 in the aggregate (in each case, other than to or in the Company, or any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceCompany);
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash (A) dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary of the Company and (B) the payment of any dividend declared prior to the date hereof and related dividend equivalents on those RSUs that were being credited with dividend equivalents prior to the date hereof; provided that in the ordinary course of business consistent with past practice) no event shall such dividend exceed $0.5225 per Share), or enter into any agreement with respect to the voting of its capital stock or other equity interestsstock;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, acquire any of its capital stock, Company Securities stock or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities shares of its capital stock (other than the retention or acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay the exercise price of any Company Options or Taxes in connection with the exercise or vesting of Company RSUsOptions, RSUs or PSUs);
(viii) incur any Indebtedness indebtedness for borrowed money or guarantee such Indebtedness indebtedness of another Person (except with respect to obligations of other than a wholly owned Subsidiaries Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesCompany), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for other than (A) Indebtedness for borrowed money indebtedness incurred in the ordinary course of business under the revolving facility under the Company Existing Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness Agreements in an amount not to exceed an aggregate principal amount that does not exceed, as of any time, the aggregate principal amount outstanding under the Existing Credit Agreements as of June 30, 2018 by more than $15 million;
50,000,000 and that may be repaid at any time without premium or penalty and (ixB) shall not authorize or make any capital expenditures indebtedness incurred under the Existing Credit Agreements in excess of an aggregate amount up to $40 million 91,000,000 as required to fund a rabbi trust in connection with the aggregate, except for (A) expenditures transactions contemplated by this agreement under the Benefit Plan set forth in the current capital forecast set forth in item 4(d) on Section 6.1(a)(ix5.1(d)(ii) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwiseLetter;
(xix) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP GAAP;
(x) except as with respect to Transaction Litigation, which shall be governed by Section 6.14, and appraisal litigation which shall be governed by Section 4.2(f), settle, waive or Law release any litigation or by other proceedings before a Governmental EntityEntity if such settlement, waiver or release (A) with respect to the payment of monetary damages, involves the payment of monetary damages that exceed $5,000,000 individually or $15,000,000 in the aggregate, net of any amount covered by insurance or indemnification or (B) with respect to any non-monetary terms and conditions therein, imposes or requires actions that would have a material effect on the continuing operations of the Company or its Subsidiaries;
(xi) except as would not reasonably be expected to materially and adversely affect Parent or any of its Affiliates (including the Company and its Subsidiaries) after the Effective Time, (A) make, revoke or change any Tax election; (B) settle, consent to or compromise any Tax Proceeding or any Tax claim or assessment or surrender a right to a Tax refund, respectively, in excess of $5,000,000 individually or $15,000,000 in the aggregate; (C) consent to any extension or waiver of any limitation period with respect to any litigation, audit, claim, action Tax claim or other Proceeding related to assessment; (D) file an amended Tax Returns or Return; (E) enter into a closing agreement with any Tax Liability Authority regarding an amount of Taxes or Tax matter; (which, for the avoidance F) change any method of doubt, shall Tax accounting; or (G) take any action that would reasonably be governed by Section 6.1(a)(xii)) and subject expected to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against preclude the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose from making a reasonable estimate of anticipated royalties or similar obligationsvalid election under Section 965(h) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes theretoSection 965(n) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damagesCode;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses material assets of the Company or its Subsidiaries, with a value in excess including capital stock of $50 million in the aggregateany of its Subsidiaries, except for other than (A) sales and non-exclusive licenses of products and services Permitted Liens, (B) transactions solely among the Company and/or its wholly owned Subsidiaries that would not result in a material increase in the Tax liability of the Company and its Subsidiaries Subsidiaries, (C) non-exclusive licenses to customers and resellers in the ordinary course of businessbusiness with respect to any Intellectual Property or (D) transactions involving the sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $5,000,000 individually or $15,000,000 in the aggregate or (BE) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xivxiii) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or other than as required by agreements, plans, programs or arrangements pursuant to the terms in effect on the date hereofof the Agreement of any Benefit Plan or as required by applicable Law: (A) enter into or amend any agreement providing compensation or benefits to any Service Provider, except for amendments that do not materially increase compensation or benefits, (B) enter into, adopt, amend, modify or terminate any compensation or benefit plans (other than routine amendments or renewals to benefit plans that do not materially increase benefits or result in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practicematerially increased costs), (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation cash or equity for the benefit of award held by any Person former or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof)current Service Provider, (D) change hire or engage the services of any actuarial individual who is expected to hold a position of vice president or other assumptions used above and have an annual base salary equal to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedabove $300,000, except as may be required by GAAP or (E) increase the compensation provided to any current or former Service Provider, except for any such increases that result from actions otherwise permitted under this clause (xiii), (F) pay any material bonus or incentive compensation; or (G) to fund the plans or arrangements set forth on Section 6.1(a)(xiii) of the Parent Disclosure Letter;
(xiv) enter into any Contract which would limit (i) the incurrence of indebtedness or (ii) the declaration and payment of the dividends in respect of the capital stock of the Company or its Subsidiaries;
(xv) except as required by Lawapplicable Law or GAAP, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary (A) revalue in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or respect any of its Subsidiaries properties, assets, including writing off notes or accounts receivables, other than in the ordinary course of business consistent with past practiceor (B) make any material change in any of its accounting principles or practices;
(xvi) allow (A) incur or commit to incur any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto capital expenditures other than capital expenditures not to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof exceed $41,000,000 in the exercise of its reasonable business judgment;
aggregate during any six (xvii6) enter into any transaction with any Affiliate of month period from June 30, 2018 to the Company Closing Date (other than any of its Subsidiaries provided, that such amount shall be committed or incurred in the ordinary course of business on a pro-rated basis for the portion of any six (6) month period elapsed between the date hereof and the Closing Date); (B) enter into, modify, amend or terminate any Material Contract (which, for purposes of this Section 6.1(a)(xvi), shall be deemed not to include any Benefit Plans), other than Contracts entered into in the ordinary course of business with customers, suppliers or independent contractors or regarding real property (but not a manner Contract that would not have any material Tax consequencesconstitute a Material Contract under Section 5.1(j)(i)(B) or named executive officer (as defined in 17 CFR 229.402) of the Company (any Contract that cannot be cancelled without material liability or any immediate family member or Affiliate of the foregoing) providing for payments by or penalty to the Company or its Subsidiaries upon notice of ninety (90) days or less); (C) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (D) engage in any Subsidiary thereof in excess of $120,000transaction with, other than the agreements expressly contemplated by this Agreement;
(xviii) or enter into any Contract agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would require payment be required to or give rise be disclosed pursuant to any rights Item 404; (other than noticeE) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such effectuate a program that would constitute a “"plant closing," "mass layoff” or “plant closing” " (each as defined under in the Worker Adjustment and Retraining Notification Act of 1988 and or any similar state and local Laws);
Law) or other collective employee layoff, collective redundancy, or similar event; (xxF) implement grant any broad-based early retirement plan material refunds, credits, rebates or announce the planning of such a program;
(xxi) enter into other allowances to any new line of business outside of its existing business end user, customer, reseller or renew or enter into any non-compete or exclusivity agreement that would restrict or limitdistributor, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) each case other than in the ordinary course of business consistent with past practice business; or expirations of (G) waive or release any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) material claim other than renewals in the ordinary course of business;
(xvii) propose or adopt a plan of complete or partial liquidation, amenddissolution, modifymerger, terminateconsolidation, cancel restructuring, recapitalization or let lapse a material insurance policy (or reinsurance policy) or self-insurance program other reorganization of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Significant Subsidiary; or
(xxvxviii) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take Nothing contained in this Agreement is intended to give Parent, directly or permit any of their Subsidiaries indirectly, the right to take any action that is reasonably likely to prevent control or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth direct the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended 's or its Subsidiaries' operations prior to the Closing Date)Effective Time, certifying that and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent's or its Subsidiaries' operations. Prior to the Effective Time, each such Subsidiary does not own any U.S. real property iof Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries' respective operations.
Appears in 1 contract
Interim Operations. (a) Except From the date of this Agreement until the Closing, except as (w) approved in writing by Purchaser, (x) provided in subsections (b) through (e) of this Section 6.1 or as expressly required by this Agreement, (y) required by applicable Law, (y) otherwise expressly required by this Agreement Law or (z) otherwise set forth in Section 6.1 of the Company Disclosure LetterSchedule, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), A) the Company shall, and shall cause each of its Subsidiaries to, conduct their business only in the ordinary course consistent with past practice Ordinary Course of Business (and in compliance with shall timely pay all applicable Laws and, to Entity Level Taxes) and (B) the extent consistent therewith, it shallCompany shall not, and shall cause not permit any of its SubsidiariesSubsidiaries to, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality take any of the foregoing and following actions, in furtherance thereof, from each case without the date prior written consent of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing Purchaser (such approval consent not to be unreasonably withheld, delayed conditioned or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:delayed):
(i) amend or otherwise change, or authorize or propose to amend or otherwise change any provision of its articles of association, certificate of incorporation, bylaws or other applicable governing documentsOrganizational Documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries[reserved];
(iii) acquire (by mergermerge, scheme of arrangement, consolidation, acquisition of stock consolidate or assets or otherwise) effect any corporation, partnership or other business organization or any assets constituting a division or business line of similar transaction with any Person or any equity interests other than a wholly owned member of any the Company Group (each such Person that is not a wholly owned member of the Company Group being called a “Non-Group Member”), or enter into any joint venture or similar arrangementtransaction with any Non-Group Member;
(iv) acquire, in one or more transactions, from any Non-Group Member (A) except as set forth in Section 6.1(b)(i) of the Company Disclosure Schedule, any assets, including computers, furnitures and other equipment (other than (1) equity interests or businesses with respect to which clause (B) below shall apply, (2) CMBS and/or CDO bonds and/or whole loans (or participations therein) with respect to which Section 6.1(b)(i) shall apply and (3) loans originated by the Company’s conduit business with respect to which Section 6.1(b)(ii) shall apply) for consideration in excess of $50,000 individually or $750,000 in the aggregate, or (B) any equity interests or business for aggregate consideration in excess of $10,000,000;
(v) sell, lease, license or otherwise dispose of, to any Non-Group Member, any of its assets, including any CDO-Related Security or any CMBS or any voting, approval or other rights under any CDO-Related Security or any CMBS, other than in the Ordinary Course of Business, or sell, lease, license or otherwise dispose of, to any Non-Group Member in the Ordinary Course of Business any of its assets, including any CDO-Related Security or any CMBS or any voting, approval or other rights under any CDO-Related Security or any CMBS, for consideration in excess of $10,000,000 individually or $25,000,000 in the aggregate except as otherwise permitted by Section 6.1(b)(i) or Section 6.1(b)(ii);
(vi) enter into any line of business or offer any services of a nature substantially different from those in which a member of the Company Group is engaged or which a member of the Company Group provides as of the date of this Agreement;
(vii) issue, sell, grant, transfer or otherwise dispose of, or pledge or otherwise encumber or subject to encumber, any Lien (whether through the issuance or granting of optionslimited liability company interests, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of of, or other equity interest in the Company (including Ordinary Shares) or any of its Subsidiaries or any (collectively, “Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesGroup Equity Interests”), or issue any securities convertible into, or sell exercisable or exchangeable for, any debt securities Company Group Equity Interests or any options, calls, warrants or other rights to acquire any debt security Company Group Equity Interests or any such convertible, exercisable or exchangeable securities in each case to any Non-Group Member;
(viii) split, combine or reclassify, or directly or indirectly repurchase, redeem or otherwise acquire, any Company Group Equity Interests not held by a member of the Company Group;
(ix) incur, assume or guarantee any Indebtedness to any Non-Group Member in excess of $10,000,000 in the aggregate, or cancel any Indebtedness owed by any Non-Group Member in excess of $10,000,000, in the aggregate, in each case other than in the Ordinary Course of Business with respect to indebtedness of the type referenced in clauses (c) through (f) of the definition of “Indebtedness”;
(x) loan or advance any amount to any Person;
(xi) cancel or waive all or any part of any Indebtedness owed to the Company or any of its Subsidiaries by any Seller or any of such Seller’s respective Affiliates (other than the Company and its Subsidiaries);
(xii) settle, compromise, discharge, waive, release or assign any material claim, right or Legal Proceeding, except where only monetary damages are owed by the Company or any of its Subsidiaries and there is no post-Closing obligation or cost to the Company or any of its Subsidiaries (other than covenants customary in settlement agreements that are of immaterial nature and scope);
(xiii) pay, assume, indemnify or incur any Indebtedness for the benefit of the Sellers or any of the Sellers’ Affiliates (other than the Company and its Subsidiaries), other than any payments required to be made pursuant to the terms of existing Indebtedness or Indebtedness incurred after the date of this Agreement pursuant to and in accordance with the terms of this Agreement;
(xiv) make any material changes with respect to its accounting policies, practices or procedures except as required by GAAP;
(xv) terminate, or waive any material right or benefit under, any Material Contract or (ii) other than in the Ordinary Course of Business, enter into, amend, renew or extend, or grant any consent under, any Material Contract;
(xvi) make or change any material election in respect of Taxes, adopt or change any material accounting method in respect of Taxes or otherwise, enter into any closing agreement, settle any claim or assessment in respect of a material amount of Taxes, request any ruling (other than the ruling requested on September 26, 2012) or similar guidance with respect to Taxes or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except as required by Law or GAAP;
(xvii) other than as may be required by the terms of any Benefit Plan in existence on the date of this Agreement or as set forth on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) terminate, enter into, or amend any Benefit Plan, or any plan, program, arrangement, practice or agreement that would be a Benefit Plan if it were in existence on the date hereof, except to the extent that such amendment would not materially increase benefits or result in materially increased administrative costs, (B) increase the compensation of any Business Employees, officers or directors of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under increases in base salaries in the revolving facility under the Company Credit Agreement, (B) loans Ordinary Course of Business or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount grant any new award, amend the terms of $15 million;
outstanding awards or change the compensation opportunity under any Benefit Plan; provided, however, that the foregoing clauses (ixA)-(C) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against restrict the Company or any of its Subsidiaries from entering into or making available to newly hired or promoted employees, in each case in the Ordinary Course of Business, plans, agreements, benefits and compensation arrangements 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;
(xviii) terminate the employment of (other than settlements by the Company or compromises its Subsidiaries for cause and in consultation with Purchaser) or hire any Person whose annual base compensation exceeded or is reasonably expected to exceed $250,000;
(xix) adopt, enter into, terminate, amend, extend or renew any collective bargaining agreement, works council agreement or other labor union or employee representative Contract;
(xx) agree to any restriction on the Company’s or any Subsidiary’s exercise of any litigationof its rights under any CDO-Related Security, auditor agree to any modification, claimwaiver or amendment of any agreement or instrument governing or relating to any CDO-Related Security, action including any collateral management or other Proceedings where similar Contract;
(xxi) agree to any restriction on the Company’s or any Subsidiary’s exercise of any of its rights under any CMBS, or agree to any modification, waiver or amendment of any Contract governing or relating to any CMBS, including any servicing or similar Contract;
(xxii) enter into any modification, waiver or consent of any Contract that would limit any right of the Company or any Subsidiary of the Company in any capacity to appoint (or approve or be consulted with respect to the appointment of) the primary servicer, master servicer or special servicer for any loan;
(xxiii) effect or cause the resignation of the Company or any Subsidiary of the Company from its capacity as primary servicer, master servicer or special servicer in connection with any one or more loans or interests therein, or from its capacity as collateral manager, disposition consultant, administrator, investment manager or asset manager or in a similar capacity with respect to any one or more securities secured by or evidencing an interest in (in each case, whether directly or indirectly and whether in whole or in part) by one or more loans or interests therein;
(xxiv) terminate or allow coverage to lapse under any of the insurance policies set forth in Section 3.21 of the Company Disclosure Schedule without obtaining replacements therefor in the Ordinary Course of Business;
(xxv) enter into any Contract that would have been required to be set forth on Section 3.7(a)(v) of the Company Disclosure Schedule if such Contract had been in effect on the date hereof;
(xxvi) subject to Section 6.1(b), (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million enter into any lease of real property in the aggregate capacity as lessee or sub-lessee (including for such purpose or in a reasonable estimate similar capacity), except any renewals of anticipated royalties or similar obligations) existing leases in the Ordinary Course of Business or (B) purchase any direct or indirect interest in any real property (other than any such purchases required to be consummated pursuant to the amount paid terms of Contracts in settlement does not exceed existence on the amount reserved against such matter in the most recent financial statements (or the notes theretodate of this Agreement, all of which are described on Section 6.1(a)(xxvi) of the Company included Disclosure Schedule); or
(xxvii) authorize, agree or commit to do any of the foregoing; provided, however, that the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to keep Purchaser reasonably informed of any action (other than in respect of actions not material in value and nature and taken in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed Ordinary Course of Business) taken by the Company or any of its Subsidiaries other than that would require the payment prior written consent of money damages;Purchaser pursuant to this Section 6.1 but for the fact that such action did not meet or exceed a threshold set forth in this Section 6.1.
(xiib) other than Notwithstanding anything to the contrary in Section 6.1(a):
(i) From the date of this Agreement through the Closing, the Company and its Subsidiaries shall have the right to acquire (x) CMBS and/or CDO bonds and/or whole loans (or participations therein) in respect of the transactions set forth on Section 6.1 of the Company Disclosure Schedule and (y) in one or more transactions in the ordinary course Ordinary Course of business Business, from one or more Non-Group Members, up to $25,000,000 (based on consideration paid) in the aggregate of CMBS and/or CDO bonds and/or whole loans (or participations therein) so long as no individual purchase, or series of related purchases, exceeds $10,000,000 (based on consideration paid); provided that (1) the restrictions in Section 6.1(a)(v) shall not apply to the sale of CMBS and/or CDO bonds and/or whole loans (or participations therein) in the Ordinary Course of Business by the Company or any of its Subsidiaries to the extent required the consideration received from such sales is used to fund the purchase of CMBS and/or CDO bonds and/or whole loans (or participations therein) pursuant to this clause (i) and (2) the consideration received from such sales of CMBS and/or CDO bonds and/or whole loans (or participations therein) shall be credited towards the $25,000,000 threshold (such that, for example, any such sales for $10,000,000 in total consideration provide an additional $10,000,000 in permitted acquisitions of such CMBS, CDO bonds and whole loans); provided, further, that if Purchaser consents in writing (which the parties agree may be granted by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount electronic mail from an authorized representative of Tax Liability, enter into any closing agreement with respect Purchaser) to any material amount acquisitions of Tax CMBS and/or CDO bonds and/or whole loans (or surrender any participations therein) referenced in this clause (i), the aggregate consideration paid in respect of such acquisitions shall not be applied against the thresholds stated herein. From the date hereof to the Closing, the Company agrees to report to Purchaser on a weekly basis as to all actions taken in respect of this clause (i).
(ii) From the date of this Agreement through the Closing, the Company and its Subsidiaries shall have the right to claim a refund for a material amount originate loans in the Ordinary Course of Tax;
(xiii) transferBusiness in connection with the Company’s conduit business in amounts that do not, sellindividually or in the aggregate, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of result in an equity investment by the Company or its SubsidiariesSubsidiaries in such loans of more than $50,000,000, with a value in excess of $50 million in the aggregate; provided that the Company and its Subsidiaries shall also have the right to incur, except for (A) sales and non-exclusive licenses of products and services pursuant to the existing repurchase facilities of the Company and its Subsidiaries (to the extent permitted thereunder), for purposes of such origination indebtedness equal to 75% of the loan to value ratio (as determined in accordance with the ordinary course existing repurchase facilities of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries Subsidiaries); provided, further, that (1) the restrictions in Section 6.1(a)(v) shall not apply to the sale of loans originated in the ordinary course Ordinary Course of business;
Business in connection with the Company’s conduit business to the extent the consideration received from such sales is used to fund the origination of loans pursuant to this clause (xivii) and (2) (Ax) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of if the Company or any of its SubsidiariesSubsidiaries sells any such loans to a Non-Group Member the $50,000,000 threshold shall calculated without regard to such loan origination except that the amount of gain or loss realized by the Company and/or its Subsidiaries as a result of such sale shall be applied as a credit or deduct, exceptas applicable, to such threshold and (y) if Purchaser consents in writing (which the parties agree may be granted by electronic mail from an authorized representative of Purchaser) to any loan origination referenced in this clause (ii), such originations shall not be applied against the threshold (provided that, notwithstanding this clause (y), in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of no event shall the Company or any of and its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary Subsidiaries have loans outstanding that were originated in connection with the Company’s usual and customary annual review conduit business after the date of this Agreement that, individually or in 2019the aggregate, so long as any result in an equity investment by the Company or its Subsidiaries in such increases are consistent with past practiceloans of more than $75,000,000). Notwithstanding the foregoing, all references to $50,000,000 in this clause (ii) shall instead refer to $25,000,000 until the Company consummates the GSMC 2013-GC10 securitization transaction.
(iii) From the date of this Agreement through the Closing, except (1) for Permitted Activities, (C2) except as required by applicable Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x3) as required described in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(ESection 6.1(c), the Company shall not, and shall not permit any Subsidiaryof its Subsidiaries or any of its Affiliates which it Controls to, in each case without the prior written consent of BuyerPurchaser (such consent not to be unreasonably withheld, conditioned or delayed, and which the parties agree may be granted by electronic mail from an authorized representative of Purchaser) take or cause to issue be taken any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Propertyaction, or exercise any registration power or grant thereofauthority, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries fail to take any action that is reasonably likely required of it under applicable Law, or any existing Contract, permit, license, or authorization, or take or permit to prevent or materially interfere with the consummation occur any Specified Restricted Activity, in respect of any of the transactions contemplated by commercial properties identified in Exhibit O-1 (collectively, the “Commercial Properties” and each individually a “Commercial Property”). Without limiting anything contained in this Agreement.
clause (c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2iii), certifying that an interest in each of the Company and Arris US Holdings Inc. is notshall, and has not been within shall cause its Subsidiaries and Affiliates which it Controls to, consult with Purchaser with respect the five Commercial Properties (5including regarding (x) year period described in Section 897(c)(1) of the Codemanagement, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s namemaintenance, address and taxpayer identification numberdevelopment, construction, operation, and remediation thereof, (iiy) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(cany substantive communications with any Governmental Authority and (z) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Dateany offers or solicitations regarding any Commercial Property), certifying that each such Subsidiary does not own any U.S. real property ion a weekly basis (and, with respect to material issues with respect to a Commercial Property,
Appears in 1 contract
Sources: Unit Purchase Agreement (Starwood Property Trust, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after From the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance until the applicable Closing, except with its terms the prior written consent of the Purchaser (unless Buyer shall otherwise approve in writing, such approval which consent may not to be unreasonably withheld, delayed or conditioned), as otherwise expressly required or contemplated by this Agreement or any other Transaction Agreement, as required by applicable Law or Order, or as set forth on Schedule 5.1(a), each of the Company Acquired Companies, the Seller and each other member of the Seller Group shall, : (i) conduct the Business and shall cause its Subsidiaries to, conduct their business use and/or hold for use the Acquired Assets only in the ordinary course consistent with past practice Ordinary Course and in material compliance with all applicable Laws andand Orders; (ii) use Reasonable Efforts to (A) preserve intact the Business and the Acquired Assets, (B) maintain its rights and franchises with respect to the extent consistent therewithBusiness and the condition of the Acquired Assets (except for ordinary wear and tear), (C) maintain the Business’ goodwill and existing relationships with customers, suppliers and distributors and any other Persons with whom it shallhas a significant business relationship and retain license, permits, authorizations, franchises and certifications (including the Applicable Governmental Authorizations), and shall cause (D) maintain its Subsidiarieslegal existence; and (iii) pay all accounts payable of the Business, to use their respective reasonable best efforts to preserve their material business organizations intact collect all accounts receivable of the Business and maintain make any capital expenditures only in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. the Ordinary Course.
(b) Without limiting the generality of the foregoing and in furtherance thereofforegoing, from the date of this Agreement until the earlier applicable Closing, except with the prior written consent of the Effective Time or the termination of this Agreement in accordance with its terms, except as Purchaser (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer which consent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) ), as otherwise required or (D) contemplated by this Agreement or any other Transaction Agreement, as required by applicable Law or Order, or as set forth in Section 6.1 on Schedule 5.1(b), the Acquired Companies and, only as with respect to the Business, the Seller and the members of the Company Disclosure LetterSeller Group, shall not take any of the Company will not and will cause its Subsidiaries not tofollowing actions:
(i) amend alter the remuneration, benefits or otherwise changeterms of employment of any employee of the Business other than (A) as required by Law or Order, or authorize (B) pursuant to any Seller Benefit Plan of the Seller or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documentsthe Seller Group as in effect on the date hereof;
(ii) mergeother than with respect to individuals that have accepted or have been provided employment offers prior to the date hereof, enter into hire or assign to any scheme Acquired Company any Employees of arrangement the Business or bid conduct agreement engage any independent contractors with respect to the Business; provided that any such employees the Purchaser consents to the hiring by or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the assignment to an Acquired Company or any of its Subsidiariesshall be deemed to be included on Schedule 10.8(a)(ii);
(iii) with respect to the Acquired Companies, acquire (including by merger, scheme of arrangement, consolidation, consolidation or acquisition of stock or assets or otherwiseassets) any corporationentity, partnership business or other business organization or any material portion of the assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementPerson;
(iv) with respect to the Acquired Companies, adopt a plan to, in whole or part, liquidate, dissolve, merge, consolidate or recapitalize the Acquired Companies;
(v) other than as permitted pursuant to subsection (vi) below, sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of any Acquired Assets or any interest therein, except for: (A) sales of Inventory in the Ordinary Course or other immaterial sales or dispositions; or (B) products and services sold or assets otherwise disposed of in the Ordinary Course;
(vi) license, transfer, assign, or subject to any Encumbrance any material Intellectual Property Asset other than Permitted Encumbrances, except for non-exclusive licenses to Intellectual Property granted in the Ordinary Course; or take any action that would reasonably be likely to result in the loss, lapse, abandonment, invalidity or unenforceability of any such material Intellectual Property;
(vii) with respect to the Acquired Companies, incur any Indebtedness for borrowed money for which the Purchaser or the Acquired Companies would be responsible for repaying after the Initial Closing Date, or assume, guarantee or endorse such obligations of any other Person, or permit any of the Acquired Assets to become subject to any Encumbrance, other than Permitted Encumbrances;
(viii) waive, release or assign any material rights or Claims of the Acquired Companies, or to the extent otherwise constituting, relating to or arising from the Acquired Assets or Assumed Liabilities;
(ix) settle or compromise, or agree to the entry of any Order in respect of, any Claim or Legal Proceeding involving any of the Acquired Assets or Assumed Liabilities or the Acquired Companies other than settlements, compromises and Orders which are immaterial or which do not impose any material limitations on the conduct or operation of the Business or include any payment obligations that would be binding on a member of the Purchaser Group or the Acquired Companies following the applicable Closing;
(x) make any new commitment for capital expenditures in excess of $500,000 or increase any previous commitment for capital expenditures by greater than $500,000;
(xi) enter into any Contract (A) with respect to which an Acquired Company or the Business that has any Liability or obligation involving more than $50,000, contingent or otherwise, (B) which may place any material limitation on the method of conducting or scope of the Business, or (C) which would otherwise be considered a Material Contract, in each case other than customer or vendor Contracts entered into in the Ordinary Course;
(xii) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose ofpledge, grant, transfer, encumber or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer otherwise dispose of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary securities of the Company Acquired Companies, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to the Company or another wholly owned Subsidiary in the ordinary course acquire, any shares of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestssecurities of the Acquired Companies or any stock appreciation rights, restricted stock units, stock-based performance units, “phantom” stock awards or other rights that are linked to the value of the common stock or the value of the Acquired Companies or any part thereof;
(viixiii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities stock or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities (other than shares of capital stock of the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs)Acquired Companies;
(viiixiv) incur make any Indebtedness or guarantee such Indebtedness of another Person (except with respect amendment to obligations of wholly owned Subsidiaries any of the Company in the ordinary course Acquired Companies’ respective certificates of business and in a manner that would not have any material Tax consequences)incorporation, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company operating agreements or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries other organizational and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 milliongovernance documents;
(ixxv) shall not authorize change its method of management or make operations in any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwisematerial respect;
(xxvi) modify (including any extension greater than two (2) years) or amend in any material respect, or cancel or terminate, any Material Contact, any other existing Contract material to an Acquired Company or the Business, or any Seller Benefit Plan;
(xvii) make any material changes with respect change in its accounting practices or procedures;
(xviii) (A) file or make any change to any material Tax election relating solely to an Acquired Company on a stand-alone basis, change any annual Tax accounting period relating solely to an Acquired Company on a stand-alone basis, or adopt or change any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by relating solely to an Acquired Company on a Governmental Entity;
stand-alone basis (xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof andexcept, in each case, as required by applicable Law or to conform to changes in applicable accounting rules), (B) file or amend any income or other material Tax Return of an Acquired Company on a stand-alone basis in a manner inconsistent with prior practice, unless such settlement or compromise does not include Tax Return has been made available to the Purchaser for review within a reasonable period prior to the due date for filing and the Seller has considered in good faith any criminal liability, material injunctive relief or obligation to be performed comments thereto provided promptly by the Company or any Purchaser after delivery of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or such Tax Return to the extent required by LawPurchaser, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, (C) enter into any closing agreement with respect to agreement, settle any material amount of Tax claim, audit or assessment or surrender any right to claim a refund for a material amount of Tax;
(xiii) transferTax refund, sell, lease, license, mortgage, pledge offset or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value reduction in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, exceptTax liability, in the each case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations only with respect to any Benefit Plan a Tax Return filed or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments filed by or to the on behalf of an Acquired Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreementon a stand-alone basis;
(xix) institute modify in any general layoff material respect the websites or Business-related content therein, hosted at the internet domain names set forth on Schedule 3.8(b)(ii) of employeesthe Seller Disclosure Schedule (or transferred to an Acquired Company after the date hereof in accordance with Section 5.11(g)), implement any early retirement plan or announce other than in the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws)Ordinary Course;
(xx) implement change customer pricing or offer any broad-based early retirement plan rebates, discounts or announce promotions, other than in the planning of such a programOrdinary Course;
(xxi) enter into take any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that other action which would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would reasonably be expected to have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Adverse Effect; or
(xxvxxii) agreeauthorize, authorize commit or commit agree to do any of the foregoing.
(c) Notwithstanding anything to the contrary in Sections 5.1(a) and (b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries above, prior to take any action that is reasonably likely to prevent or materially interfere with the consummation of Initial Closing, the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing Acquired Companies are permitted (i) executed affidavits dated as to transfer, assign, discharge or otherwise settle all intercompany accounts with members of the Closing Date Seller Group and their Affiliates, (ii) to distribute the net cash held by the Acquired Companies as a dividend, reduction of share capital or any other form of return of funds to their respective shareholders, (iii) to contribute cash or property to the share capital of an Acquired Company or in accordance exchange for additional shares of stock of an Acquired Company, (iv) to incur intercompany debt in connection with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each the settlement of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification numberintercompany accounts, and (iiv) executed affidavits dated as to otherwise engage in intercompany transactions involving the Acquired Companies and members of the Closing Date from each Subsidiary listed in Seller Group and their Affiliates to facilitate the matters contemplated by Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i5.3.
Appears in 1 contract
Interim Operations. (a) Except Prior to the Effective Time, except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure LetterLetter or as contemplated by any other provision of this Agreement, unless Sub has consented in writing thereto, the Company covenants Company:
(i) shall, and agrees thatshall cause each of its Subsidiaries to, after conduct its operations and business according to their usual, regular and ordinary course consistent with past practice;
(ii) shall use its best efforts, and shall cause each of its Subsidiaries to use its best efforts, to preserve intact their business organizations and goodwill, keep available the date hereof services of their respective officers and until the earlier of the Effective Time or the termination of this Agreement in accordance employees and maintain satisfactory relationships with its terms those persons having business relationships with them;
(unless Buyer iii) shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shallnot, and shall cause its Subsidiaries not to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use amend their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality Articles of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time Incorporation or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law by-laws or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable comparable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementinstruments;
(iv) issue, sell, pledge or otherwise encumber or subject to shall promptly notify Sub of (x) any Lien material change in its condition (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase financial or otherwise), dispose ofbusiness, grantprospects, transferproperties, assets, liabilities or the normal course of its business or of its properties, (y) any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or authorize (z) the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer breach of any shares of capital stock of the Company (including Ordinary Shares) representation or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)warranty contained herein;
(v) make shall promptly deliver to Sub correct and complete copies of any report, statement or forgive schedule filed with the SEC subsequent to the date of this Agreement;
(vi) shall not, and shall not permit any loansof its Subsidiaries to, advances authorize, propose or capital contributions announce an intention to authorize or investments in propose, or enter into an agreement with respect to, any Person merger, consolidation or business combination (other than to the Merger), release or relinquishment of any direct material contract rights, or indirect wholly owned Subsidiary any acquisition or disposition of the Company assets or securities in excess of $100,000 in the ordinary course of business and in a manner that would not have any material Tax consequences) aggregate other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vivii) shall not, and shall not permit any of its Subsidiaries to, (x) grant, confer or award any options, warrants, conversion rights or other rights, not existing on the date hereof, to acquire any shares of its capital stock or other securities of the Company or its Subsidiaries or (y) accelerate, amend or change the period of exercisability of options or restricted stock granted under any employee stock plan or, except as contemplated by Section 4.3(a)(i), authorize cash payments in exchange for any options granted under any of such plans;
(viii) shall not, and shall not permit any of its Subsidiaries to, amend in any material respect the terms of the Benefit Plans, including, without limitation, any employment, severance or similar agreements or arrangements in existence on the date hereof, or adopt any new employee benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements;
(ix) shall not, and shall not permit any of its Subsidiaries to (x) increase or agree to increase the compensation payable or to become payable to its officers or, other than increases in accordance with past practice which are not material, to its employees or (y) enter into any collective bargaining agreement;
(x) shall not, and shall not permit any of its Subsidiaries to, (x) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity or (y) make any loans or advances to any other person, except in the case of clause (x) for borrowings under existing credit facilities in the ordinary course of business and, except in the case of clause (y) for advances consistent with past practice which are not material;
(xi) shall not, and shall not permit any of its Subsidiaries to, (x) materially change any practice with respect to Taxes, (y) make, change or revoke any material Tax election, or (z) settle or compromise any material dispute involving a Tax liability;
(xii) shall not, and shall not permit any of its Subsidiaries to, (x) declare, set aside, make aside or pay any dividend or make any other distribution, payable in cash, stock, property distribution or otherwise, payment with respect to any shares of its shares capital stock or other equity ownership interests or (except y) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, or make any commitment for cash dividends paid by any direct such action or indirect wholly owned Subsidiary to (z) split, combine or reclassify any of its capital stock or issue or authorize the Company or to issuance of any other direct securities in respect of, in lieu of or indirect wholly owned Subsidiary in substitution for shares of its capital stock;
(xiii) shall not, and shall not permit any of its Subsidiaries to, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date hereof in accordance with their present terms);
(xiv) shall not, and shall not permit any of its Subsidiaries to, make or agree to make any capital expenditure or expenditures with respect to property, plant or equipment which, individually or in a series of related transactions, is in excess of $100,000 or, in the aggregate, are in excess of $500,000 except as otherwise in the ordinary course of business consistent with past practice) practice in order to satisfy actual or enter into any agreement with respect expected contractual commitments to the voting of its capital stock or other equity interestscustomers;
(viixv) reclassifyshall not, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, and shall not permit any of its capital stockSubsidiaries to, Company Securities change any accounting principles or practices;
(xvi) shall not, and shall not permit any Other Subsidiary Securities of its Subsidiaries to, pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the acquisition of any Ordinary Shares tendered by current payment, discharge or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company satisfaction, in the ordinary course of business and consistent with past practice or in a manner that would not have any material Tax consequences)accordance with their terms, of liabilities reflected or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers incurred thereafter in the ordinary course of business consistent with past practice, enter into or waive any Contract that would have been a Material Contract had it been entered into prior material benefits of, or agree to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or modify in any Material Contract;
(xxiii) other than renewals in the ordinary course of businessmaterial respect, amendany confidentiality, modifystandstill, terminate, cancel non-solicitation or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of similar agreement to which the Company or any Subsidiary is a party; and
(xvii) shall not, and shall not permit any of its Subsidiaries to take, or agree (in effect as of the date hereof, unless simultaneous with such termination, cancellation writing or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of associationotherwise) or similar interests or rights); or
(xxv) agreeresolve to take, authorize or commit to do any of the foregoingforegoing actions.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Sources: Merger Agreement (MTL Inc)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the The Company Disclosure Letter, the Company covenants and agrees that, after during the period from the date hereof and until of this Agreement through the earlier of the Effective Time Closing or the termination of this Agreement in accordance with its terms Agreement, except (unless Buyer 1) to the extent Parent shall otherwise approve give its prior consent in writing, such approval not to (2) as set forth in Part 4.1(a) of the Company Disclosure Schedule, (3) as may be unreasonably withheld, delayed required by applicable Legal Requirements or conditioned)(4) as expressly permitted or required by this Agreement, the Company shall, and shall cause its the Company Subsidiaries to, use reasonable best efforts to conduct their its business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to maintain and preserve their intact its business organization, keep available the services of current officers, key employees and key consultants and maintain satisfactory relationships with customers, suppliers and distributors, Governmental Entities and other Persons with whom the Company or any Company Subsidiary has material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associatesrelations. Without limiting the generality of foregoing, during the foregoing and in furtherance thereof, period from the date of this Agreement until through the earlier of the Effective Time Closing or the termination of this Agreement in accordance with its termsAgreement, except (1) to the extent Parent shall otherwise give its prior consent in writing, (2) as set forth in Part 4.1(a) of the Company Disclosure Schedule, (A3) as may be required by applicable Law Legal Requirements or (4) as contemplated by the Scheme Document Annex, (B) otherwise expressly permitted or required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the shall not (and shall not permit any Company will not and will cause its Subsidiaries not Subsidiary to:):
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles the Organizational Documents of association, certificate of incorporation, bylaws or other applicable governing documentsthe Company;
(ii) mergesplit, enter into any scheme combine, subdivide, change, exchange, amend the terms of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of reclassify any shares of the Company’s capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the or any Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)Subsidiary;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(viiii) declare, set aside, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property stock or otherwise, property) with respect to any shares of its shares the Company’s capital stock or the capital stock or other equity interests (except for cash interest of any Company Subsidiary, other than dividends or distributions only to the extent paid by any direct or indirect wholly owned Company Subsidiary to the Company or to any other direct or indirect another wholly owned Subsidiary of the Company;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person, (C) any business owned by a third party, or (D) assets in a single transaction or series of related transactions for an aggregate purchase price in excess of $250,000, except, (1) acquisitions by the Company from any wholly owned Subsidiary or among any wholly owned Subsidiaries of the Company, (2) the purchase of equipment, supplies and inventory in the ordinary course of business consistent with past practiceor (3) inbound licenses of Intellectual Property in the ordinary course of business; provided that the issuance of any Insurance Contract by any Company Insurance Subsidiary will not be considered the acquisition of a business for purposes of this Section 4.1;
(v) issue, sell, grant or enter into otherwise permit to become outstanding any agreement with respect additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to the voting acquire, any shares of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition (A) shares of any Ordinary Shares tendered by current Company Common Stock issuable upon exercise of Company Options or former employees or directors in order to pay Taxes in connection with the vesting or settlement of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries , in each case outstanding as of the date of this Agreement and in accordance with the terms of the applicable award; (B) pursuant to the Company ESPP in the ordinary course of business and in a manner that would not have accordance with the terms thereof and of this Agreement (including Section 4.8 hereof); (C) in connection with the exercise of Company Warrants; and (D) the issuance of the Additional Shares pursuant to Section 2.17 of the INSU Merger Agreement;
(vi) sell, assign, transfer, lease or license to any material Tax consequencesthird party, or encumber, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any Company IP or material assets of the Company, other than (A) sales of inventory, goods or services in the ordinary course of business or of obsolete equipment or assets in the ordinary course of business; (B) pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth in Part 4.1(a)(vi) of the Company Disclosure Schedule; (C) as security for any borrowings permitted by Section 4(a)(viii); or (D) licenses granted to customers or other third parties in the ordinary course of business, including any licenses granted in the operation of the enterprise business solutions line of the Company (the “EBS Business”);
(vii) directly or indirectly repurchase, redeem or otherwise acquire any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable for any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, except (A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the exercise of repurchase rights binding on the Company and existing prior to the date of this Agreement; (B) shares of Company Common Stock accepted as payment for the exercise price of options to purchase Company Common Stock pursuant to the Company Equity Plans or for withholding Taxes incurred in connection with the exercise, vesting or settlement of Company Options and Company RSUs, as applicable, in accordance with the terms of the applicable award and (C) in connection with the exercise of Company Warrants;
(viii) (A) incur, redeem, repurchase, prepay, defease, or cancel any indebtedness for borrowed money, guarantee any such indebtedness, issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company securities (directly, contingently or otherwise) or make any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response contributions to any emergencyother Person, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or (B) incur any Lien on any of its material property or assets, except for Company Permitted Encumbrances;
(ix) (A) adopt, terminate or amend in any material respect any Company Plan, (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any director, individual independent contractor or current or former employee of the Company or any Company Subsidiary with an annual compensation of $200,000 or above, other than as contemplated by Part 4.1(a)(ix) of the Company Disclosure Schedule, (C) grant any rights to severance, retention, change in control, transaction or termination pay to any current or former director, independent contractor or current or former employee of the Company or any Company Subsidiary with an annual compensation of $200,000 or above, (D) hire or promote any employee with an annual compensation of $200,000 or above, or (E) terminate the employment of any employee of the Company or any Company Subsidiary with an annual compensation of $200,000 or above (other than for cause); except, in each case, for (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements, (2) as otherwise expressly contemplated by this Agreement, (3) with respect to the extent annual renewal process for any Company Plan that is not reasonably expected to result in a material cost increase to the Company or any Company Subsidiary, (4) in connection with any employee hire (i) to replace departing employees with an annual compensation of less than $200,000, (ii) to fill open positions as set forth on Part 4.1(a)(ix)(4)(ii) of the Company Disclosure Schedule, (iii) who has already accepted an offer of employment and is set forth on Part 4.1(a)(ix)(4)(iii) of the Company Disclosure Schedule or (iv) otherwise in the ordinary course of business; or (5) for increases in compensation or benefits made in the ordinary course of business for any employee with an annual compensation of less than $200,000;
(x) (i)(A) amend or terminate (except for terminations pursuant to the expiration of the existing term of any Material Contract and amendments in the ordinary course of business and except with respect to Reinsurance Agreements) any Material Contract or (B) waive, release or assign any material rights under any Material Contracts (other than any Reinsurance Agreement), (ii) enter into or renew any Contract or agreement that, if in effect on the date of this Agreement, would constitute a Material Contract (except for renewals of any existing Material Contract in the ordinary course of business and Contracts entered into or renewed in connection with the EBS Business and except for Reinsurance Agreements), or (iii) enter into any Reinsurance Agreement that does not meet the criteria set forth on Part 4.1(a)(ix)(iii) of the Company Disclosure Schedule;
(xi) change any of its methods of financial accounting or accounting practices in any material respect other than as required by Lawchanges in GAAP or SAP or as required by applicable Legal Requirements;
(xii) make, make change or revoke any material Tax election, change or adopt any Tax accounting period or material method of Tax accounting, amend any material Company Return if such amendment would reasonably be expected to result in a material Tax liability, file any material amended income Tax ReturnCompany Return prepared in a manner materially inconsistent with past practice, settle or compromise any material liability for Taxes or any Tax audit, claim, or other proceeding relating to a material amount of Tax LiabilityTaxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar state, local or non-U.S. Legal Requirement) if such agreement with respect would reasonably be expected to result in a material Tax liability or have a material impact on Taxes, request any material amount of Tax or ruling from any Governmental Entity, surrender any right to claim a material refund for a material amount of Tax;
(xiii) transferTaxes, sellor, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment agree to an extension or waiver of Intellectual Property that the Company or any Subsidiary determines in the exercise statute of its reasonable business judgment limitations with respect to abandon in the ordinary course a material amount of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of businessTaxes;
(xivxiii) (A) grantsell, increase or provide any retentiontransfer, change of controlassign, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits oflicense, or makeotherwise dispose of (by merger, grant consolidation, operation of law, division or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) tootherwise), or grant mortgage, encumber or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of exchange any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Propertyowned, or any registration or grant thereofpurported to be owned, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in of the exercise Company, including, for the avoidance of its reasonable business judgment;
(xvii) enter into doubt, any transaction sale, transfer, assignment, license, or other disposition of, or mortgage, encumbrance or exchange of any such material Intellectual Property to or with any Affiliate of the Company (other than non-exclusive licenses granted in the ordinary course of business) or modify, amend, cancel, terminate, waive, release or assign any of its Subsidiaries Company IP License or any rights, claims, obligations or benefits thereunder or enter into any Contract that would have been a Company IP License had it been entered into prior to the First Effective Time, in each case, with respect to any nonmaterial Company IP License, except, in each case, in the ordinary course of business and for licenses granted in a manner the connection with the EBS Business;
(xiv) (i) make any capital expenditure that would is not have any material Tax consequences) or named executive officer (as defined contemplated by the capital expenditure budget set forth in 17 CFR 229.402Part Section 4(a)(xiv)(i) of the Company Disclosure Schedule or (ii) incur any cash expenditures or any immediate family member obligations or Affiliate liabilities except cash expenditures, obligations or liabilities incurred (A) in the ordinary course of the foregoingbusiness or (B) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xv) enter into any agreement, understanding or arrangement with respect to the voting of any capital stock or other equity interests of the Company (including any voting trust), other than in connection with the granting of revocable proxies in connection with any meeting of the Company’s stockholders;
(xvi) adopt a plan of (A) complete or partial liquidation of the Company or any Subsidiary of the Company or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization;
(xvii) commence, settle or compromise any litigation, claim, suit, action or proceeding, except for (x) ordinary course claims and related Legal Proceedings under or with respect to any Insurance Contract and (y) other settlements or compromises that (A) involve solely monetary remedies with a value not in excess of $75,000, with respect to any individual litigation, claim, suit, action or matter, or $250,000 in the aggregate to be paid by the Company and its Subsidiaries, (B) do not impose any restriction on the Company’s business or the business of the Company Subsidiaries, (C) do not relate to any litigation, claim, suit, action or proceeding by the Company’s stockholders in connection with this Agreement or the Mergers and (D) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary;
(xviii) materially reduce the amount of insurance coverage under the material commercial insurance policies of the Company and the Company Subsidiaries or fail to use reasonable best efforts to renew or maintain any such material existing insurance policies;
(xix) institute (A) amend any general layoff of employees, implement material Company Permits in a manner that adversely impacts the Company’s ability to conduct its business in any early retirement plan material respect or announce the planning of such a program that would constitute a “mass layoff” (B) terminate or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws)allow to lapse any material Company Permits;
(xx) implement (A) fail to pay any broad-based early retirement plan issuance, renewal, maintenance and other payments that become due with respect to any material Company Registered IP or announce otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than in its reasonable business judgment or in the planning ordinary course of such business, or (B) authorize the disclosure to any third party of any material Trade Secret included in the Company IP in a programway that results in loss of trade secret protection, other than in the ordinary course of business;
(xxi) except in the ordinary course of business and for Contracts entered into in connection with the EBS Business, enter into any individual Contract under which the Company or any Company Subsidiary (A) grants or agrees to grant any right to material Company IP, other than non-exclusive licenses, or (B) agrees to pay any royalties in excess of $150,000 with respect to any Intellectual Property;
(xxii) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) any special meeting of the Company’s stockholders other than the Company Stockholder Meeting or (B) any other meeting of the Company’s stockholders to consider a proposal that would reasonably be expected to impair, prevent or delay the consummation of the transactions contemplated hereby;
(xxiii) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiariesbusiness;
(axxiv) other than new Contracts with customers (i) alter or suppliers amend in the ordinary course of business consistent with past any existing financial, underwriting, claims, claims handling, risk retention, reserving, investment or actuarial practice, guideline or policy or any material assumption underlying an actuarial practice or policy, except as may be required by GAAP, SAP, any Governmental Entity or applicable law or (ii) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or commitment with any insurance regulatory authority, in the case of each of clauses (bi) and (ii) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agreeauthorize, authorize approve or commit enter into any agreement or make any commitment to do take any of the foregoingactions described in clauses “(i)” through “(xxiv)” of this sentence.
(b) Neither Buyer nor Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent the Company shall knowingly take otherwise give its prior consent in writing, (2) as set forth in Part 4.1(b) the Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements or permit any of their Subsidiaries to take any action that is reasonably likely to prevent (4) as expressly permitted or materially interfere with the consummation of the transactions contemplated required by this Agreement.
(c) The Company , Parent shall, and shall cause the Parent Subsidiaries to, conduct its business in the ordinary course in all material respects and use its reasonable best efforts to cause to be delivered to Buyer at maintain and preserve intact its business organization. Without limiting the Closing (i) executed affidavits dated as foregoing, during the period from the date of this Agreement through the earlier of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2)or the termination of this Agreement, certifying that an interest in each of except (1) to the extent the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described shall otherwise give its prior consent in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property iwrit
Appears in 1 contract
Sources: Merger Agreement (Metromile, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by During the period from the date of this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and continuing until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Article VIII hereof or until such time as Buyer’s designees shall constitute a majority of the members of the Board of Directors of the Company, except as Buyer shall otherwise approve consent in writing, such approval writing (which consent shall not to be unreasonably withheld, delayed withheld or conditioned)delayed) or as set forth in the Company Disclosure Schedule, the Company shall, and shall cause each of its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise changeconduct their respective operations according to their usual, or authorize or propose regular and ordinary course and take no action which would reasonably be expected to amend or otherwise change adversely affect its articles of association, certificate of incorporation, bylaws or other applicable governing documentsability to consummate the transactions contemplated by this Agreement;
(ii) mergeuse commercially reasonable efforts to preserve intact their respective business organizations and goodwill, enter into keep available the services of their respective officers and employees (excluding administrative staff) and maintain satisfactory relationships with those persons having significant business dealings with them;
(iii) not (A) amend their respective Certificates of Incorporation or Bylaws or comparable governing instruments or (B) amend the Rights Agreement or take any scheme of arrangement or bid conduct agreement or other similar arrangementaction with respect to, or consolidate with make any other Person determination under, the Rights Agreement, including, without limitation, redemption of the rights issued pursuant to the Rights Agreement or restructureany action to facilitate an Alternative Proposal;
(iv) promptly notify Buyer of any Company Material Adverse Effect (or any occurrence or existence of any event which is reasonably likely to result in a Company Material Adverse Effect) without regard to clause (z) of the proviso in the definition thereof set forth in Section 5.1, reorganize any material litigation or completely material governmental complaints, investigations or partially liquidate hearings (or communications indicating that the same may be contemplated), or any breach of (or the occurrence or existence of any event which is reasonably likely to result in any breach of) any representation or warranty contained herein that is reasonably likely to result in the conditions set forth Annex A not being capable of satisfaction on or before the Outside Date;
(v) not modify, extend the term or forgive or cancel any outstanding loans owed to the Company or any of its SubsidiariesSubsidiaries by any current or former directors, officers, employees consultants or independent contractors of such entities other than any modification, extension, forgiveness or cancellation pursuant to contractual rights existing on the date hereof as disclosed on the Company Disclosure Schedule;
(iiivi) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line promptly deliver to Buyer true and correct copies of any Person report, statement or any equity interests schedule filed with the SEC subsequent to the date of any Person or enter into any joint venture or similar arrangementthis Agreement;
(ivvii) issue, sell, pledge or otherwise encumber or subject not (A) except pursuant to any Lien (whether through the issuance or granting exercise of options, warrants, commitmentsconversion rights and other contractual rights existing on the date hereof and disclosed pursuant to this Agreement, subscriptionsissue, rights to purchase deliver or otherwise), dispose of, grant, transfersell, or authorize or propose the issuance, saledelivery or sale of, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of its capital stock or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any capital stock, effect any stock split or otherwise change its capitalization as it existed on the date hereof; (B) grant, confer or award any option, warrant, conversion right or other right not set forth on the Company Disclosure Schedule to acquire any shares of its capital stock or such securities; (C) enter into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of its capital stock; (D) increase any compensation or enter into or amend any employment agreement or arrangements with any of its present or future officers, directors or employees; (E) grant any severance or termination package to any director, officer, employee or consultant other than rights set forth on the Company Disclosure Schedule; (F) hire any new employee who shall have, or terminate the employment of any current employee who has an annual salary in excess of $100,000; (G) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend, except as required by applicable law (in which case the Company should provide prompt written notice to Buyer following such adoption), any existing Benefit Plan in any material respect, except for changes which are not more favorable to participants in such plans; (H) other than in the ordinary course of business, enter into any transaction with any director or executive officer of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities immediate family member of any such director or Other Subsidiary Securities (executive officer other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to rights set forth on the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof Disclosure Schedule; or (DI) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary except in the ordinary course of business and in a manner that would not have business, hire any material Tax consequences)additional consultants or independent contractors or enter into or extend the term of any consulting or independent contractor relationship;
(vviii) make or forgive any loans, advances or capital contributions to or investments in any Person not (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(viA) declare, set aside, make aside or pay any dividend or make any other distribution, payable in cash, stock, property distribution or otherwise, payment with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity ownership interests;
; or (viiB) reclassifydirectly or indirectly, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, acquire any shares of its capital stock, or make any commitment for any such action;
(ix) not enter into any agreement, commitment or transaction, or agree to enter into any such agreement or transaction, or modify or extend any such agreement or transaction, involving payments by the Company Securities in excess of $50,000 individually or any Other Subsidiary Securities $250,000 in the aggregate, including, without limitation, a purchase, sale, lease or other disposition of assets or capital stock (other than the acquisition including, without limitation, securities of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUsSubsidiaries);
(viiix) incur not enter into any Indebtedness transaction involving a merger, consolidation, joint venture, license agreement, partial or complete liquidation or dissolution, reorganization, recapitalization or restructuring;
(xi) not sell, assign, transfer, encumber, enter into any outbound license or covenant not to s▇▇ with respect to, grant any exclusive right with respect to, or otherwise dispose of any Company Property;
(xii) not incur, create, assume or otherwise become liable for any indebtedness for borrowed money or guarantee any such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), indebtedness or issue or sell any debt securities or warrants or other rights to acquire any debt security securities of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 millionothers;
(ixxiii) shall not authorize make any loans, advances or capital contributions to, or investments in, any other Person;
(xiv) except as described in the Company Disclosure Schedule, not make or commit to make any capital expenditures in excess of $40 million 50,000 individually or $100,000 in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(xxv) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or not apply any of its Subsidiaries other than settlements assets or compromises properties to the direct or indirect payment, discharge, satisfaction or reduction of any litigationamount payable, auditdirectly or indirectly, claim, action to or other Proceedings where for the benefit of any affiliate or Related Party or enter into any transaction with any affiliate or Related Party (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including except for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) salary and other than customary expense reimbursements made in the ordinary course of business to Related Parties who are employees, directors or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses consultants of the Company or its Subsidiaries);
(xvi) not make any changes in accounting methods, with a value principles or practices in excess effect as of $50 million in the aggregatedate hereof, other than as required by GAAP and good accounting practices;
(xvii) not grant or make any mortgage or pledge or subject itself or any of its material assets or properties to any material lien, charge or encumbrance of any kind, except for Permitted Encumbrances;
(Axviii) sales and non-exclusive licenses not alter, amend or revoke any Tax election or method of products and services of the Company accounting with respect to Taxes or settle or compromise any material Tax claim;
(xix) maintain insurance on its tangible assets and its Subsidiaries businesses in the ordinary course of businesssuch amounts and against such risks and losses as are currently in effect;
(xx) except as required in accordance with GAAP, (B) not revalue any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal including, without limitation, writing down the value of any lease of real property that has expired by its terms inventory or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries writing off notes or accounts receivable, other than in the ordinary course of business;
(xivxxi) not settle any legal proceedings, whether now pending or hereafter made or brought;
(xxii) not modify or amend, or terminate, or waive, release or assign any material rights or claims with respect to, any material agreement or arrangement to which it is a party;
(xxiii) pursuant to or within the meaning of any bankruptcy law, not (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereofcommence a voluntary case, (B) increase consent to the entry of an order for relief against it in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practicean involuntary case, (C) except as required by Law consent to the appointment of a custodian of it or as required by agreements, plans, programs for all or arrangements in effect on the date hereof, establish, adopt, terminate substantially all of its property or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practiceD) or accelerate the vesting or payment of any compensation or equity make a general assignment for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsits creditors;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (bA) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contractbusiness, not amend, modify, supplement, waiveassign, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminatereject, cancel or let lapse fail to exercise a material insurance policy right of renewal or extension, any IP Contract; or (or reinsurance policyB) or self-insurance program of continue to diligently prosecute all claims in the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance Patent applications and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force maintain and effect;
(xxiv) not exercise abandon any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Company Property; orand
(xxv) agreenot authorize any of, authorize or announce an intention to, commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries agree to take any action that is reasonably likely to prevent or materially interfere with of, the consummation of the transactions contemplated by this Agreementforegoing actions.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after From the date hereof and until the earlier of the Effective Time Closing Date or the termination of date, if any, on which this Agreement in accordance with its terms is terminated pursuant to Section 8.1 (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditionedthe “Termination Date”), the Company shall, and Seller shall cause its Subsidiaries to, the Company and each Subsidiary to (i) conduct their business the Business only in the ordinary course consistent with past practice Ordinary Course of Business and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to (ii) use their respective reasonable best efforts to preserve their material intact the business organizations intact and maintain in all material respects existing relations organization and goodwill of the Business, to maintain the Company’s and each Subsidiary’s relationships with Governmental Entitiesthe Clients, customersinsurance underwriters and other third parties having business dealings with the Company or the Subsidiaries and to keep available the services of the key Business Employees.
(b) In furtherance of, suppliers, employees and business associates. Without without limiting the generality of of, Section 6.1(a), except as expressly permitted by this Agreement or as approved in writing by the foregoing and in furtherance thereofPurchaser (which approval shall not be unreasonably withheld, conditioned or delayed), from the date of this Agreement hereof until the earlier of the Effective Time Closing Date or the termination Termination Date, neither the Company nor any Subsidiary shall (and the Seller shall not permit the Company or any Subsidiary to):
(i) take or omit to take any action that results or may reasonably be expected to result in any of this Agreement the representations and warranties of the Seller set forth herein being or becoming untrue in any material respect or in any of the conditions precedent set forth in Sections 7.1 and 7.3 not being satisfied;
(ii) amend or otherwise change the Organizational Documents;
(iii) (A) authorize, issue, sell or transfer any Shares or other equity securities of the Company or any Subsidiary, (B) adjust, split, combine, reclassify or redeem any Shares or (C) declare, authorize, set aside or pay any dividend or other distribution (whether in cash, stock or other property) in respect of any Shares;
(iv) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination) or form any subsidiary;
(v) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(vi) make any material change in the operation of the Business, except such changes as may be required to comply with any Applicable Law;
(vii) enter into, amend in any material respect or terminate (other than in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise changeany Material Contract, or authorize waive, release or propose to amend assign any rights or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documentsclaims thereunder;
(iiviii) mergesell, enter into any scheme of arrangement lease (as lessor), transfer or bid conduct agreement or other similar arrangementotherwise dispose of, or consolidate with mortgage, encumber, pledge or impose any other Person Lien on, any assets or restructure, reorganize or completely or partially liquidate properties of the Company or any Subsidiary, other than dispositions of its Subsidiariesimmaterial assets or properties in the Ordinary Course of Business for fair value;
(iiiix) acquire (by mergercreate, scheme of arrangementincur, consolidationassume or guarantee any Indebtedness, acquisition of stock or assets extend or otherwise) modify any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementexisting Indebtedness;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(vx) make or forgive any loans, advances or capital contributions to to, or investments in, any Person;
(xi) cancel any debts owed to, or waive any claims or rights held by, the Company or any Subsidiary;
(xii) commence, settle or compromise any Action by or against the Company or any Subsidiary, other than settlements entered into in the Ordinary Course of Business that require only the payment of monetary damages in an aggregate amount not to exceed $25,000;
(xiii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employee, (B) enter into or amend any employment, consulting, deferred compensation, severance or change of control agreement with any Business Employee, or (C) enter into, adopt or amend any Employee Benefit Plan;
(xiv) engage in any Person transaction with any Affiliates, except transactions that are at prices and on terms and conditions not less favorable to the Company or the Subsidiaries than could be obtained on an arm’s-length basis from unrelated third parties;
(xv) change any accounting methods, policies or procedures, other than as required by Applicable Law or GAAP;
(xvi) fail to pay any accounts payable when due (other than amounts being contested in good faith) or fail to use commercially reasonable efforts to collect any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceaccounts receivable when due;
(vixvii) declaretake any action that is intended or would reasonably be expected to result in any of the conditions of the Closing set forth in Article 7 not being satisfied, set asideexcept, make in every case, as may be required by Applicable Law; or
(xviii) enter into any agreement, commitment or pay any dividend understanding (whether written or other distribution, payable in cash, stock, property or otherwise, oral) with respect to any of its shares or other equity interests the foregoing.
(except for cash dividends paid by any direct or indirect wholly owned Subsidiary to c) From the date hereof until the Closing Date, neither the Company nor any Subsidiary shall make, rescind, or change any election with respect to Taxes; change any other direct Tax accounting period; adopt or indirect wholly owned Subsidiary in the ordinary course change any method of business consistent with past practice) or Tax accounting; file any amended Tax Return; enter into any an agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, Taxes with any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate Authority (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any “closing agreement with respect to any material amount of Tax or agreement” under Code section 7121); surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject Taxes; consent to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses an extension of the Company or its Subsidiaries, with a value in excess statute of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits limitations applicable to any director, consultant Tax claim or employee of the Company assessment; or take any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoingaction.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Sources: Stock Purchase Agreement (First Financial Holdings Inc /De/)
Interim Operations. (a) Except as (x) required by applicable Law, (y) Law or otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure LetterAgreement, the Company covenants and agrees that, from and after the date hereof and until the earlier of prior to the Effective Time or Time, except with the termination prior written consent of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)Parent, the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its SubsidiariesSubsidiaries to, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. .
(b) Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document AnnexLaw, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in the relevant subsection of Section 6.1 6.1(b) of the Company Disclosure Letter, or (D) with the prior written consent of Parent ((X) which consent, solely with respect to the items and actions set forth in clauses (iii), (v), (ix), (xiii), (xv), (xvi) and (xvii), shall not be unreasonably withheld, conditioned or delayed so long as the action or omission (or series of related actions or omissions) the subject of such clauses would not reasonably be expected to result in (x) the Company will being obligated to make payments in excess of $1,000,000 or (y) additional cost, expense or liability to Parent or Merger Sub hereunder in excess of $1,000,000, (Y) which consent, solely with respect to the items and actions set forth in clause (xi), shall not be unreasonably withheld, conditioned or delayed, and will (Z) which consent, with respect to the other following clauses, may be given or withheld in Parent’s sole discretion), the Company shall not, and the Company shall cause its Subsidiaries not to:
(i) amend or otherwise changeamend, or authorize or propose to amend supplement or otherwise change its articles of association, certificate of incorporation, bylaws bylaws, limited liability company agreement or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiariesliquidate;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any material assets constituting a division or business line of from any Person or any equity interests of any Person or enter into any joint venture or similar arrangementother Person;
(iv) issue, deliver, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, delivery, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guaranty or transfer of encumbrance of, any shares of its capital stock or equity interests or the capital stock or equity interests of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting exercise of Company RSUs (and dividend equivalents thereonOptions or awards under the ESPP or the settlement of Company RSUs, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in each case in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect Stock Plans and that are outstanding as of the date hereof or that are issued after the date hereof in compliance with this Agreement or (DB) the issuance or transfer of common capital stock or other equity interests by of a wholly owned Subsidiary of the Company or any of its wholly-owned Subsidiaries to the Company or another wholly owned Subsidiary in the ordinary course Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of business and in a manner that would not have such capital stock, or any material Tax consequences)options, stock units, stock awards, warrants or other rights of any kind to acquire any shares of such capital stock, equity interests, convertible or exchangeable securities;
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to the Company or any direct or indirect wholly owned Subsidiary of the Company Company) in the ordinary course excess of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in $250,000 or outside the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares capital stock or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practiceSubsidiary) or enter into any agreement with respect to the voting of its capital stock or other equity interestsstock;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities stock or equity interests or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities shares of its capital stock or equity interests (other than (A) the acquisition in the ordinary course of business consistent with past practice of any Ordinary Shares tendered by current or former employees Service Providers in connection with the cashless exercise of Company Options or directors in order to pay Taxes in connection with the exercise of Company Options or the vesting of Company RSUs);, (B) repurchases of Shares at a price per Share not exceeding the Per Share Merger Consideration to the extent required or permitted pursuant to the terms and conditions of awards granted under the Stock Plans outstanding as of the date hereof, the form of which has been made available to Parent prior to the date hereof or (C) repurchases of Shares pursuant to the Stock Repurchase Plan in accordance with its terms until the Stock Repurchase Plan is terminated pursuant to Section 6.17.
(viii) incur any Indebtedness for borrowed money or guarantee such Indebtedness of another Person (except with respect to obligations of other than a wholly owned Subsidiaries Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesCompany), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) in each case other than in the ordinary course under letters of credit, lines of credit or other credit facilities or arrangements in effect on the date hereof so long as the total Indebtedness for borrowed money incurred under all such letters of credit, lines of credit or credit facilities does not exceed $500,000 in the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 millionaggregate;
(ix) shall not make or authorize or make any capital expenditures in excess of $40 million 250,000 individually or $500,000 in the aggregate, except for (A) expenditures other than in accordance with the capital expenditure plan set forth in the current capital forecast set forth in on Section 6.1(a)(ix6.1(b)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwisethe ordinary course of business;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except institute, compromise, settle, come to an arrangement regarding or agree to compromise, settle or come to an arrangement regarding any claims (A) involving amounts in excess of $50,000 individually or $100,000 in the aggregate, (B) that would impose any non-monetary obligation on the Company or its Subsidiaries or Affiliates that would continue after the Effective Time or (C) involving any stockholder, director or director nominee of the Company or that would grant any rights with respect to any litigation, audit, claim, action appointment or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance nomination of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damagesdirectors;
(xii) other than in the ordinary course of business make, change or to the extent required by Law, make rescind any material Tax electionelection or method of Tax accounting, file any material amended income Tax Return, settle or compromise any material Tax liability, consent to or request any extension or waiver of any limitation period with respect to any claim or assessment of a material amount of Taxes (other than pursuant to extensions of time to file Tax LiabilityReturns in the ordinary course of business consistent with past practices), enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of TaxTax refund, fail to pay any Taxes as they become due and payable;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire expire, ▇▇▇▇▇ ▇ ▇▇▇▇ on or otherwise dispose of any material assets, product lines properties or businesses rights of the Company or its Subsidiaries, with a value in excess including capital stock of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, except (A) in the ordinary course of business consistent with past practice (which, in the case of Intellectual Property, shall be limited to only nonexclusive licenses or as required by agreements, plans, programs or arrangements subscriptions granted to customers in the ordinary course of business) and (B) pursuant to Contracts in effect on the date of this Agreement to the extent set forth on Section 6.1(b)(xiii) of the Company Disclosure Letter (and made available to Parent prior to the date hereof);
(xiv) except as required under applicable Law or the terms of any Benefit Plan in effect as of the date hereof (A) grant, provide or increase (or commit to grant, provide or increase) any severance or termination payments or benefits to any current or former Service Provider; (B) increase in any manner (or commit to increase in any manner) the compensation, bonus compensation or benefits of, of any current or make, grant or amend in any respect any equity or equity-linked awards former Service Provider (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, other than in the ordinary course of business consistent with past practice or practices in all respects (including as is not material in the aggregate and (2) in the case to number of promotions, identity of employees being promoted, timing thereof and amount of increases) for employees with aggregate annual compensation potential (after taking into account such increase) of $200,000 or less who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practicebeing promoted to a higher paying position), (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereofbecome a party to, establish, adopt, terminate or amend (or commit to become a party to, establish, adopt, terminate or amend) any Benefit Plan or arrangement that would have been a Benefit Plan if in effect on the date hereof (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting of, or payment lapse of restrictions on, any compensation (including any Company Option, Company RSU or equity Company PSU) for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), Person; (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees Service Providers or any of their beneficiaries; provided(E) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan; or (F) terminate the employment or services of any Service Provider with annual compensation in excess of $200,000 other than for cause, however, that notwithstanding anything to the contrary or hire any Service Provider for annual compensation (base salary and incentive opportunities) in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent excess of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements$200,000;
(xv) abandon, encumber, convey title (in whole or in part), exclusively license or grant a license of any right or other licenses to material Intellectual Property owned by or exclusively licensed to the Company or any of its Subsidiaries, or enter into licenses or agreements that impose material restrictions upon the Company or any of its Subsidiaries with respect to Intellectual Property owned by any third party, in each case other than in the ordinary course of business consistent with past practice;
(xvi) allow (A) modify, amend or terminate any lapse or abandonment of any material Intellectual PropertyMaterial Contract, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xviiB) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or successor agreement to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a an expiring Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with that does not change the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject expiring Material Contract or (C) enter into any new agreement that would have been considered a Material Contract if it were entered into on or prior to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contractthe date hereof;
(xxiiixvii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel cancel, materially amend or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise materially modify any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Insurance Policies; or
(xxvxviii) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Sources: Merger Agreement (Sciquest Inc)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the The Company shall, and shall cause each of its Subsidiaries to, conduct their business in from and after the ordinary course consistent with past practice execution and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date delivery of this Agreement until the earlier of the Effective Time or and the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as and abandonment of the transactions contemplated by the Scheme Document Annex, this Agreement pursuant to Article IX (B) unless Parent shall otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheldconditioned, delayed withheld or delayed)), and except as otherwise expressly required by this Agreement or as is required by applicable Law, use commercially reasonable efforts to conduct its business in all material respects in the Ordinary Course of Business and shall use and cause each of its Subsidiaries to use their respective commercially reasonable efforts to maintain its and its Subsidiaries’ relations and goodwill with key Governmental Entities, customers, suppliers, employees; provided, however, that no action taken or failed to be taken by the Company or any of its Subsidiaries with respect to the matters addressed by clauses (i) through (xxii) of this Section 7.1(a) shall be deemed a breach of this Section 7.1(a) unless such action would constitute a breach of such clauses (i) through (xxii). Without limiting the generality of and in furtherance of the foregoing sentence, from the execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except as otherwise expressly required or permitted by this Agreement, required by applicable Law, as approved in writing by Parent (such approval not to be unreasonably conditioned, withheld or delayed) or (D) as set forth in the applicable subsection of Section 6.1 7.1(a) of the Company Disclosure LetterSchedule, the Company will shall not and will shall cause its Subsidiaries not to:
(i) amend adopt any change in its Organizational Documents (other than, with respect to Organizational Documents of Subsidiaries, in a manner that would not materially restrict the operations of the Company’s or otherwise change, or authorize or propose to amend or otherwise change any of its articles of association, certificate of incorporation, bylaws or other applicable governing documentsSubsidiaries’ businesses);
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructureadopt any plan of liquidation, reorganize except for mergers or completely or partially liquidate consolidations solely among Wholly Owned Subsidiaries of the Company or any of its SubsidiariesCompany;
(iii) acquire (acquire, directly or indirectly by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise, any business, Person, properties or assets from any other Person either (A) with a purchase price in excess of $5,000,000 in any corporationindividual transaction or in the aggregate, partnership in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or (B) that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement prior to the Outside Date, other than, in the case of clause (A), acquisitions of inventory or other business organization goods in the Ordinary Course of Business pursuant to the terms of a Contract binding on the Company or any assets constituting a division of its Subsidiaries in effect as of the date of this Agreement, correct and complete copies of which have been made available to Parent, or business line entered into following the date of any Person or any equity interests this Agreement in the Ordinary Course of any Person or enter into any joint venture or similar arrangementBusiness;
(iv) transfer, sell, lease, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses material to the Company or any of its Subsidiaries, including capital stock or other equity interests of any of its Subsidiaries outside of the Ordinary Course of Business, except in connection with (A) sales of obsolete assets in the Ordinary Course of Business, (B) sales, leases, licenses or other dispositions of assets (not including services) with a fair market value not in excess of $5,000,000 individually or in the aggregate in the Ordinary Course of Business, (C) non-exclusive licenses or other similar rights under Intellectual Property Rights in the Ordinary Course of Business, and (D) sales of inventory or other goods in the Ordinary Course of Business;
(v) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or authorize otherwise enter into any Contract with respect to the issuancevoting of, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary including, for the avoidance of doubt, Shares) or capital stock or other equity interests of any of its Subsidiaries Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any Company Securities options, warrants or Other Subsidiary Securities other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) proxies solicited by or on behalf of the issuance Company in order to obtain the Requisite Company Vote in compliance with the terms of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, this Agreement or (B) the issuance of Ordinary Shares pursuant to the Company ESPPshares of such capital stock, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests securities or convertible or exchangeable securities (1) by a wholly owned Wholly Owned Subsidiary of the Company to the Company or another wholly owned Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the ordinary course date of business this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect on the Capitalization Date, (3) in respect of Company Equity Awards granted in accordance with the terms and conditions of this Agreement under the Stock Plans in a manner that would not have any material Tax consequenceseffect on the Capitalization Date or (4) pursuant to the ESPP in accordance with its terms and subject to Section 4.3(f));
(vvi) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any direct or indirect wholly owned Subsidiary of its Wholly Owned Subsidiaries) outside of the Company Ordinary Course of Business or, to the extent in the ordinary course Ordinary Course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employeesBusiness, in each case, excess of $1,000,000 individually or $5,000,000 in the ordinary course of business consistent with past practiceaggregate;
(vivii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for cash dividends or other distributions paid by any direct or indirect wholly owned Wholly Owned Subsidiary to the Company or to any other direct or indirect wholly owned Wholly Owned Subsidiary in of the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsCompany;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities other equity interests or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities shares of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), other than the acquisition withholding of any Ordinary Shares tendered by current to satisfy the payment of the exercise price on the exercise of a Company Option or former employees withholding Tax obligations upon the exercise, vesting or directors settlement of Company Equity Awards outstanding as of the date of this Agreement or granted after the date hereof in order to pay Taxes in connection accordance with the vesting terms and conditions of Company RSUs)this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect on the Capitalization Date;
(viiiix) incur any Indebtedness or guarantee such Indebtedness (including the issuance of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security of the Company or any of its Subsidiariessecurity), except for (A) Indebtedness for borrowed money under incurred in the revolving facility under Ordinary Course of Business not to exceed $5,000,000 individually or in the Company Credit Agreementaggregate or expressly permitted by Section 7.1(a)(vi), (B) loans guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 7.1(a) or advances to wholly owned Subsidiaries and (C) other Indebtedness that consists of interest rate swaps, ▇▇▇▇▇▇, forward sales contracts or similar financial instruments on customary commercial terms consistent with past practice and in an amount compliance with the Company’s risk management policies in effect on the date of this Agreement and not to exceed an aggregate principal amount $5,000,000 of $15 million;
(ix) shall not authorize notional debt individually or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make or authorize any material changes with respect to any method of Tax payment of, or financial accounting policies accrual or procedurescommitment for, capital expenditures, except for any such expenditures (A) following prior notice to, and consultation with Parent, to the extent reasonably necessary to avoid a material business interruption as required by changes a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or information technology systems, or any other similar cause not reasonably within the control of the Company or its Subsidiaries or (B) in GAAP or Law or by a Governmental Entitythe Ordinary Course of Business not in excess of $1,000,000 in the aggregate during any consecutive twelve-month period;
(xi) except other than with respect to Contracts relating to activities expressly described in any litigationother Subsection of this Section 7.1(a), audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall which will be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practicethose respective Subsections, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement Agreement, other than Contracts with customers or suppliers entered into in the Ordinary Course of Business and, for the avoidance of doubt, any Contracts entered into in connection with an action expressly permitted by any of the Subsections of this Section 7.1(a), including any amendment, modification or supplement to an existing Contract, which are governed by Section 7.1(a)(xii);
(bxii) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(ix), terminate or amend or otherwise modify or waive in a manner that is materially adverse to the ordinary course of business consistent with past practice Company and its Subsidiaries (taken as a whole), or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in in, any Material Contract, other than expirations of any such Material Contract in the Ordinary Course of Business and in accordance with the terms of such Material Contract with no further action by the Company, any of its Subsidiaries or other party to such Material Contract, except for any ministerial actions, or non-exclusive licenses, covenants not to sue, releases, waivers or other rights under Intellectual Property Rights owned by the Company or any of its Subsidiaries, in each case, granted in the Ordinary Course of Business;
(xxiiixiii) other than renewals cancel, modify or waive any debts or claims held by or owed to the Company or any of its Subsidiaries having in each case a value in excess of $1,000,000 individually or $5,000,000 in the ordinary course aggregate;
(xiv) amend any License contemplated by Section 5.5(d) in any material respect, or allow any such License to lapse, expire or terminate (except where the lapse, expiration or termination of businessany such License is with respect to a License that has become obsolete, redundant or no longer required by applicable Law);
(xv) for the avoidance of doubt, except as expressly provided for by Section 7.11, amend, modify, terminate, cancel or let lapse a any material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereofInsurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by the Company or one or more of its Subsidiaries or replacement policies underwritten by reputable insurance carriers are in full force and reinsurance companies of nationally recognized standing or self-insurance programseffect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies Insurance Policies for substantially similar premiums, as applicable, are as in full force and effecteffect as of the date of this Agreement;
(xxivxvi) not exercise other than with respect to Transaction Litigation, any rights Proceeding in connection with, arising out of or otherwise related to a demand for appraisal under Section 5 or Section 6 262 of the Company’s current articles DGCL or any material Tax claim, audit, assessment or dispute, which shall be governed by Section 7.13, Section 4.2(f) and Section 7.1(a)(xviii), respectively, settle or compromise any Proceeding for an amount in excess of association $5,000,000 in the aggregate or on a basis that would result in the imposition of any Order that would restrict the future activity or conduct of the Company or any of its Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person;
(xvii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or applicable Law;
(xviii) change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, affirmatively surrender any right to claim a refund of a material amount of Taxes, or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax (provided that an extension of time for filing tax returns requested or granted in the Ordinary Course of Business shall not be considered an extension or waiver of the statute of limitations for this purpose);
(xix) cancel, abandon or otherwise adopt allow to lapse or implement expire any Registered Intellectual Property, except in the Ordinary Course of Business or at the end of their statutory terms;
(xx) except as required by the terms of any Company Benefit Plan in effect as of the date of this Agreement, (A) increase in any manner the compensation or benefits of any employee, officer or director of the Company or its Subsidiaries, except for increases in annual salary or wage rate in the Ordinary Course of Business and consistent with past practice, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, in each case including any equity or equity-based awards or any long-term incentive awards, under any Company Benefit Plan, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (E) enter into any transaction bonus, retention, change-of-control or similar agreement or arrangement with any employee of the Company or any of its Subsidiaries or pay or award any amounts in respect of the foregoing, (F) hire, engage or promote any employee or engage any independent contractor (who is a natural person) with annual salary or wage rate or consulting fees in excess of $300,000 or (G) terminate the employment of any executive officer except for a termination for “poison pillcause” as determined pursuant to the terms of the applicable Company Benefit Plan;
(xxi) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) agreement with a labor union, labor organization, works council or similar interests organization;
(xxii) enter into any material new line of business;
(xxiii) enter into any Contract or rights)take any other action as described in Section 7.1(a)(xxiii) of the Company Disclosure Schedule; or
(xxvxxiv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company Nothing set forth in this Agreement shall knowingly take give Parent, directly or permit any of their Subsidiaries indirectly, the right to take any action that is reasonably likely to prevent control or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth direct the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended or its Subsidiaries’ operations prior to the Closing Date)Effective Time or give the Company, certifying that each such Subsidiary does not own any U.S. real property idirectly or indirectly, the right to control or direct the Parent’s or its Subsidiaries’ operations prior to the Effective Time.
Appears in 1 contract
Interim Operations. (a) Except (i) as required by this Agreement, (xii) as required by applicable Law, (yiii) otherwise expressly required as approved in writing by this Agreement or Parent (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), (iv) as set forth on Section 6.1(a) of the Company Disclosure Schedule, or (v) to the extent necessary to comply with the obligations set forth in any Contract to which the Company or any of its Subsidiaries is a party in effect on the date of the Agreement, from the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will, and will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course of business and, to the extent consistent therewith, the Company shall, and shall cause its Subsidiaries to, conduct use its and their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and to maintain in all material respects existing relations and goodwill relationships with Governmental Entities, customers, suppliers, employees distributors, licensors, licensees and other Persons having material business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time relationships with it.
(b) Except as required or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as expressly contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (Cw) Buyer may approve as required by applicable Law, (x) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or ), (Dy) as set forth in on Section 6.1 6.1(b) of the Company Disclosure LetterSchedule, or (z) to the extent necessary to comply with the obligations set forth in any Material Contract to which the Company or any of its Subsidiaries is a party in effect on the date of this Agreement, from the date of this Agreement until earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will not not, and will cause its Subsidiaries not to:
(i) amend or otherwise change, adopt any change in the Organizational Documents of the Company or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documentsSubsidiaries;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the assets, operations or business of the Company or any of its Subsidiaries;
(iii) acquire (by mergerissue, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issuegrant, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transferof or encumber, or authorize the issuance, grant, sale, pledge, disposition or encumbrance or subjecting to any Lienof, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any Company Securities options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or Other Subsidiary Securities (other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) the issuance any issuance, sale, grant or transfer of Ordinary Shares upon the vesting pursuant to exercise or settlement of Company RSUs (and dividend equivalents thereon, if applicable) Equity Awards outstanding prior to as of the date of this Agreement in accordance with their terms in effect on the date hereof, and (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement incurrence of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)Permitted Liens;
(viv) make or forgive any loans, advances or capital contributions to or investments in any Person in excess of $25,000 individually or $100,000 in the aggregate (other than (A) to the Company or any direct or indirect of its wholly owned Subsidiary Subsidiaries, and (B) in connection with capital leases and extensions of the Company credit terms to customers in each case in the ordinary course of business and in a manner that would not have any material Tax consequencesbusiness);
(v) other than extending trade credit to customers and advancing business expenses to employeesthe July Dividend, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise with respect to any of its shares capital stock, except for dividends or other equity interests (except for cash dividends distributions paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary in of the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interestsCompany;
(viivi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (except for (A) any such transaction by a wholly owned Subsidiary of the Company Securities or any Other Subsidiary Securities and (other than the acquisition B) acquisitions of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting withholding in respect of Company RSUsEquity Awards), or payment of the exercise price in respect of Company Options, in each case, outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement;
(viiivii) incur create, incur, assume or guarantee any Indebtedness for borrowed money, letters of credit or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries guarantees of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiariessame, except for (A) Indebtedness for borrowed money under the revolving facility borrowings under the Company Credit Agreement (as in effect as of the date hereof or as amended, restated, modified, supplemented or refinanced in accordance with this Agreement), (B) loans letters of credit, guarantees or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed credit support provided by the Company or any of its Subsidiaries other than in the payment ordinary course of money damagesbusiness, (C) any Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, and (D) any capital leases entered into in the ordinary course of business;
(xiiviii) incur or commit to any capital expenditure or expenditures other than in the ordinary course of business;
(ix) other than in the ordinary course of business or in connection with any matter to the extent required such matter is permitted by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount other clause of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lienthis Section 6.1(b), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (bB) amend or terminate any Material Contract in a manner adverse to the Company (other than expirations of any such Material Contract in accordance with its terms) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries under any Material Contract;
(x) make any changes with respect to financial accounting policies or procedures (other than immaterial changes in the ordinary course of business), except as required by Law or by U.S. GAAP or policy, rules or interpretations with respect thereto by any Governmental Authority or quasi-Governmental Authority with jurisdiction over the Company or its Subsidiaries;
(xi) settle or offer to settle any Action, other than any Tax claim, notice, audit, investigation, assessment or other proceeding with respect to Taxes (which shall be governed by clause (xvii)), for an amount in excess of $500,000 individually or $1,000,000 in the aggregate, other than any settlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered and paid by insurance coverage maintained by the Company or any of its Subsidiaries;
(xii) sell, acquire, lease or sublease any material assets or properties (including any material real property, but other than Owned Intellectual Property which instead is the subject of Section 6.1(b)(xiii) below) other than (i) in the ordinary course of business, (ii) in replacement of existing assets or properties, (iii) (A) substantially in accordance with the Company’s operating budget for fiscal year 2024 provided to Parent prior to the date hereof, or (B) in accordance with the Company’s operating budget for fiscal year 2025, (iv) acquisitions or sales of inventory, (v) disposals of property at the end of its useful life or disposals of obsolete or expired property, or (vi) sales, acquisitions, leases or subleases between or among the Company and any of its Subsidiaries;
(xiii) sell, assign, transfer, license, abandon, cancel, permit to lapse, pledge, encumber, fail to renew, maintain or pursue filed applications for or otherwise dispose of any material Owned Intellectual Property, other than (A) the grant of non-exclusive licenses in the ordinary course of business, (B) to customers or suppliers in their capacity(ies) as such (x) in the ordinary course of business or (y) pursuant to any Material Contract existing as of the date of this Agreement or (C) when in the Company’s reasonable business judgment, the benefits of retaining such Owned Intellectual Property are outweighed by the burdens of doing so;
(xiv) except as required by Benefit Plans as in effect on the date of this Agreement: (A) increase the amount or accelerate the vesting, payment or funding of the compensation or other benefits payable or provided to the Company’s or any of its Subsidiaries’ current or former officers, directors, individual service providers or employees, other than increases in compensation or benefits in the ordinary course of business with respect to employees at the level of Vice President or below and not exceeding a year-over-year increase of 3% in the aggregate; (B) grant or enter into any cash or equity or equity-based incentive, bonus, employment, change of control, severance or retention agreement with any current or former officer, director, individual service provider or employee of the Company or any of its Subsidiaries; (C) establish, adopt, enter into or amend any collective bargaining agreement, Benefit Plan or arrangement that would be a Benefit Plan if in effect on the date of this Agreement; or (D) accelerate the vesting, funding or payment of any compensatory arrangement;
(xv) negotiate or enter into any Labor Agreement or recognize or certify any labor union, labor organization, works council or group of employees as the bargaining representatives for any employees of the Company or any of its Subsidiaries;
(xvi) acquire any capital stock in, or any business line or all or a material portion of the assets constituting any business, corporation, partnership, association, joint venture, or other entity or other business organization in any transaction that involves consideration valued in excess of $500,000, individually or $1,000,000 in the aggregate (including any earn-out payments or other deferred or contingent consideration payable in connection with any such transaction), including by merger, consolidation, purchase of stock or assets or otherwise, except for (A) transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries, or (B) acquisitions of assets or inventory in the ordinary course of business;
(xvii) other than in the ordinary course of business, make, revoke or change any material Tax election, make any material change to any annual Tax accounting period, adopt or change any material method of Tax accounting, amend any material Tax Returns or file any claims for material Tax refunds, waive or extend any statute of limitations in respect of a period within which an assessment or reassessment of material Taxes may be issued (other than any extension pursuant to an extension to file any Tax Return obtained in the ordinary course of business), enter into any material closing agreement, enter into a Tax sharing agreement, Tax indemnification agreement, Tax allocation agreement or similar contract or arrangement, settle any material Tax claim, audit or assessment or surrender any right to claim a material (x) Tax refund, (y) offset or (z) other reduction in Tax liability;
(xviii) license, escrow, or otherwise grant any rights to, any material Owned Source Code or disclose any material trade secrets owned or processed by the Company or any of its Subsidiaries (except to customers or service providers of, or Persons with professional, business consistent with past practice or expirations of any such Contract commercial relationships with, the Company or its Subsidiaries in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contractconfidentiality obligations);
(xxiiixix) other than renewals in the ordinary course adopt or enter into a plan of business, amend, modify, terminate, cancel complete or let lapse a material insurance policy partial liquidation or dissolution or voluntarily file for bankruptcy or similar proceeding;
(or reinsurance policyxx) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal fail to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are use reasonable efforts to keep in full force and effecteffect insurance comparable in amount and scope to coverage currently maintained;
(xxivxxi) not exercise take any rights under Section 5 action, or Section 6 of knowingly fail to take any action, where such action or failure to act would reasonably be expected to prevent the Company’s current articles of association or otherwise adopt or implement Merger and any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in transactions contemplated by this Agreement from qualifying for the Company’s current articles of association) or similar interests or rights)Intended Tax Treatment; or
(xxvxxii) agree, authorize or commit to do any of the foregoing.
(bc) Neither Buyer nor Company Subject to the terms of this Agreement, including Section 6.5 and Section 6.13, after the date of this Agreement and prior to the Effective Time, none of Parent, Merger Sub, the Rollover Stockholders or the Equity Investors shall knowingly take or permit any of their respective Subsidiaries to take enter into or agree to enter into any action agreement that is would reasonably likely be expected to prevent prevent, materially impair or materially interfere with delay the consummation of the transactions contemplated by this AgreementMerger or the satisfaction of any of the closing conditions thereto.
(cd) The Company shall use its reasonable efforts Nothing contained in this Agreement is intended to cause give Parent or Merger Sub, directly or indirectly, the right to be delivered to Buyer at control or direct the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each operations of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended its Subsidiaries prior to the Closing Date)Effective Time. Prior to the Effective Time, certifying that each such Subsidiary does not own any U.S. real property ithe Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. (a) Except Each of the Partnership and Parent covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (x) unless Parent or the Partnership, as applicable, shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement, as provided in any Contract in effect as of the date of this Agreement, or as required by applicable Law, (ythe business of it and its Subsidiaries shall be conducted in the Ordinary Course provided, that this Section 7.1(a) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 shall not prohibit the Parties and their respective Subsidiaries from taking commercially reasonable actions outside of the Company Disclosure Letter, Ordinary Course in response to changes or developments resulting from the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shallCOVID-19 pandemic, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as otherwise expressly: (Aa) contemplated by this Agreement; (b) required by applicable Law or the terms of any Partnership Material Contract or Parent Material Contract, as contemplated by the Scheme Document Annex, applicable; (Bc) otherwise expressly required by this Agreement, (C) Buyer may approve as approved in writing (such which approval shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed) by the other Party; or (Dd) as set forth in the corresponding subsection of Section 6.1 7.1 of the Company Partnership Disclosure Letter, as it relates to the Company will Partnership and its Subsidiaries, or in Section 7.1 of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries, each Party, on its own account, shall not and will cause shall not permit its Subsidiaries not to:
(i) amend make any change to its Organizational Documents as in effect on the date of this Agreement in any manner that would reasonably be expected to prohibit, prevent or otherwise changematerially impede, hinder or delay the ability of such Party to satisfy any of the conditions to, or authorize the consummation of, the Merger or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or the other applicable governing documentsTransactions;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, (A) merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company itself or any of its Subsidiaries with any other Person, or (B) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, in each case, except (1) such transactions solely between or among, or solely involving, such Party and one or more of its wholly owned Subsidiaries, or a Subsidiary of such Party and one or more wholly owned Subsidiaries of such Subsidiary, (2) as would not reasonably be expected to result in a Partnership Material Adverse Effect or Parent Material Adverse Effect, as applicable, or (3) as would not reasonably be expected to prohibit, prevent or materially impede, hinder or delay the ability of such Party to satisfy any of the conditions to, or the consummation of, the Merger or the other Transactions;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer encumbrance, or enter into any Contract (including, with respect to the voting of), any of any its partnership interests, limited liability company interests, shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities equity interests, as applicable (other than the issuance of partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company such Party to the Company such Party or another one or more of such Party’s wholly owned Subsidiaries, or by a wholly owned Subsidiary of such Party’s Subsidiary to such Subsidiary or one or more other wholly owned Subsidiaries of such Subsidiary, (B) in respect of equity-based awards granted in the ordinary course Ordinary Course or (C) with respect to Parent, equity securities of business and Parent in a manner that would not have excess of $500,000,000 in the aggregate (based on the market price of the securities at the time of issuance)), or securities convertible or exchangeable into or exercisable for any material Tax consequencessuch partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or any options, warrants or other rights of any kind to acquire any partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or such convertible or exchangeable securities; provided, that, nothing in this clause (iii) shall be deemed to restrict the vesting and/or payment, or the acceleration of the vesting and/or payment, of any awards or other equity awards in accordance with the terms of any existing equity-based, bonus, incentive, performance or other compensation plan or arrangement or Employee Benefit Plan (including, without limitation, in connection with any equity award holder’s termination of service);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(viiiv) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its partnership interests, limited liability company interests, shares of capital stockstock or equity interests, Company Securities as applicable, or securities convertible or exchangeable into or exercisable for any Other Subsidiary Securities (other than the acquisition partnership interests, limited liability company interests, shares of any Ordinary Shares tendered by current capital stock or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs)equity interests, as applicable;
(viiiv) incur waive, release, assign, settle or compromise any Indebtedness claim, action or guarantee such Indebtedness of another Person (except with respect proceeding, including any state or federal regulatory proceeding seeking damages or injunction or other equitable relief, which waiver, release, assignment, settlement or compromise would reasonably be expected to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and result in a manner that would not have any material Tax consequences)Partnership Material Adverse Effect or Parent Material Adverse Effect, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 millionas applicable;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(xvi) make any material changes with respect to any method of Tax or financial accounting policies or procedurespolicies, except as required by changes in GAAP (or Law any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or by a Governmental Entityany similar organization, or Law, including pursuant to SEC rule or policy;
(xivii) except with respect to make or declare any litigation, audit, claim, action dividends or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior distributions to the date hereof andholders of Common Units or Parent Common Stock, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, conveyOrdinary Course, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)7.11; or
(xxvviii) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly Notwithstanding anything to the contrary in this Agreement, a Party’s obligations under Section 7.1(a) to take an action or permit any of their not to take an action, or to cause its Subsidiaries to take an action or not to take an action, shall, with respect to any action Persons (and their respective Subsidiaries) controlled by such Party, or in which such Party otherwise has a voting interest, but that is reasonably likely to prevent are not wholly owned Subsidiaries of such Party or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing have public equity holders, only apply (i) executed affidavits dated as to the extent permitted by the organizational documents and governance arrangements of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2)such entity and its subsidiaries, certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each extent a Party is authorized and empowered to bind such Subsidiary does not own entity and its subsidiaries and (iii) to the extent permitted by the Party’s or its Subsidiaries’ duties (fiduciary or otherwise) to such entity and its subsidiaries or any U.S. real property iof its equity holders.
Appears in 1 contract
Sources: Merger Agreement (Tc Pipelines Lp)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the The Company shall, and shall cause each of its Subsidiaries to, conduct their business in the ordinary course consistent with past practice from and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from after the date of this Agreement until the earlier of the Effective Time or and the termination of this Agreement in accordance with its terms, except as Article IX (Athe “Interim Period”) required by applicable Law or as contemplated by the Scheme Document Annex, (B) unless Parent shall otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed conditioned or conditioneddelayed), except as otherwise expressly required by this Agreement or except as required by applicable Law), conduct its business in the Ordinary Course of Business and use commercially reasonable efforts to conduct its business in accordance with applicable Law, to the extent consistent with the foregoing, shall use and cause each of its Subsidiaries to use their respective commercially reasonable efforts to maintain its and its Subsidiaries’ business and assets and relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees, agents and business associates; provided that, the Company and its Subsidiaries shall be permitted to take commercially reasonable actions as reasonably required to comply with COVID-19 Measures (provided, further that to the extent reasonably practicable, in connection with taking any such actions which would otherwise be prohibited by any provision of this Agreement, the Company shall provide advance notice to Parent (and if advance notice is not reasonably practicable, shall provide notice to Parent promptly following the taking of any such actions) and reasonably consult in good faith with Parent with respect thereto). Without limiting the generality of and in furtherance of the foregoing sentence, during the Interim Period, except as otherwise expressly contemplated or required by this Agreement, required by applicable Law, as approved in writing by Parent (such approval not to be unreasonably withheld, conditioned or delayed, except that Parent may withhold, condition or delay approval of actions contemplated by Section 7.1(a)(iii) or (DSection 7.1(a)(iv) as in Parent’s sole discretion), or set forth in the corresponding subsection of Section 6.1 7.1(a) of the Company Disclosure Letter, the Company will shall not and will shall cause its Subsidiaries not to:
(i) amend adopt or otherwise change, publicly propose any change in its Organizational Documents (other than to correct scrivener’s errors or authorize immaterial or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documentsministerial amendments);
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its SubsidiariesSubsidiaries with any other Person, deconsolidate any of the JVs or restructure, reorganize, recapitalize or completely or partially liquidate or dissolve (provided, that the Company may effect or cause to be effected the actions referred to in this clause (ii) to the extent they involve only the Company’s Wholly Owned Subsidiaries and are reasonably required to be undertaken to effectuate transactions otherwise permitted under clauses (iii) or (iv) below);
(iii) acquire (acquire, directly or indirectly by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) , any corporationbusiness, partnership or other business organization or any assets constituting a division or business line of any Person or assets from any equity interests other Person with a fair market value or purchase price in excess of $7,500,000 in any Person individual transaction or enter into series of related transactions or $30,000,000 in the aggregate, in each case, including any joint venture amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar arrangementcontingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement;
(iv) transfer, sell, lease, divest, cancel, abandon, allow to expire or lapse, license, outsource or otherwise dispose of, or grant any Encumbrance (other than any Permitted Encumbrance) upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights) of the Company or any of its Subsidiaries or product lines or businesses of the Company or any of its Subsidiaries, except (A) other than with respect to Intellectual Property Rights and outsourcing, in connection with services provided in the Ordinary Course of Business, (B) expiration, abandonment or sales of obsolete or unused assets in the Ordinary Course of Business, (C) sales, leases, licenses, outsourcing or other dispositions of tangible assets with a fair market value not in excess of $2,000,000 individually or $5,000,000 in the aggregate, (D) with respect to Intellectual Property Rights, non-exclusive grants of licenses in the Ordinary Course of Business and (E) the grant of Encumbrances to secure Indebtedness permitted by Section 7.1(a)(ix);
(v) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or authorize otherwise enter into any Contract or other agreement, understanding or arrangement (whether oral or written) with respect to the issuancevoting of, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary including, for the avoidance of doubt, Shares) or of any of its Subsidiaries Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock, or any Company Securities options, warrants or Other Subsidiary Securities other rights of any kind to acquire any such shares of capital stock or such convertible or exchangeable securities (other than (A) proxies or voting agreements solicited by or on behalf of the issuance Company in order to obtain the Requisite Company Vote or in connection with any annual meeting of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, Company’s stockholders or (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with shares of such Company ESPP as in effect as of the date hereof capital stock (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C1) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Wholly Owned Subsidiary of the Company to the Company or another wholly owned Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the ordinary course date of business this Agreement in accordance with their terms and, as applicable, issuances under the Stock Plans (in either case, to the extent disclosed in Section5.2(d) of the Company Disclosure Letter) or (3) pursuant to the ESPP in accordance with its terms and in a manner that would not have any material Tax consequencessubject to Section 4.2(c));
(vvi) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of from the Company and any of its Wholly Owned Subsidiaries) outside the Ordinary Course of Business in excess of $2 million individually or $10 million in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceaggregate;
(vivii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement including with respect to the voting Company, for the avoidance of its capital stock doubt, Shares), except for (i) dividends or distributions paid by any Wholly Owned Subsidiary to the Company, (ii) dividends or distributions to any other Wholly Owned Subsidiary of the Company, or (iii) to the extent any such dividend or other equity interestsdistribution is in accordance with the requirements of the joint venture, operating or similar Contract of any of the JVs;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stockstock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares) (provided, that the Company Securities may effect or any Other Subsidiary Securities cause to be effected the actions referred to in this clause (other than viii) to the acquisition of any Ordinary Shares tendered by current extent they involve only the Company’s Wholly Owned Subsidiaries and are reasonably required to be undertaken to effectuate transactions otherwise permitted under clauses (iii) or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs(iv) above);
(viiiix) incur redeem, repurchase or prepay (other than prepayment of revolving loans), assume, guarantee, issue, incur, endorse or otherwise become liable for or modify the terms of any Indebtedness or guarantee such Indebtedness (including the issuance of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or any warrants or other rights to acquire any debt security security) or enter into any hedging agreements, except for (subject, in each case, to Section 7.1(a)(xii)) (A)
(1) Indebtedness of the type contemplated by clauses (a) and (b) of the definition thereof in the Ordinary Course of Business up to $25,000,000 and (2) other Indebtedness in the Ordinary Course of Business up to $10,000,000, (B) drawdowns under the Credit Agreement up to $50,000,000, (C) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 7.1(a), (D) Indebtedness between the Company and any of its Wholly Owned Subsidiaries or between one Wholly Owned Subsidiary of the Company and another Wholly Owned Subsidiary of the Company, (E) hedging agreements entered into in the Ordinary Course of Business and not for speculative purposes, (F) extensions or renewals of any outstanding Indebtedness in the Ordinary Course of Business that do not include the addition, renewal or modification of any call protection or similar provisions or other restrictions or limitations on prepayment or repayment, or (G) refinancings or replacements of any outstanding Indebtedness on terms that are substantially similar to the terms of such outstanding Indebtedness or are otherwise more favorable to the Company and its Subsidiaries; provided, that any Indebtedness assumed, guaranteed, issued or incurred by the Company or any of its Subsidiaries or for which the Company or any of its Subsidiaries otherwise becomes liable under this Section 7.1(a)(ix) shall permit prepayment at any time without penalty of any kind;
(x) make or authorize any payment of, or accrual or commitment for, capital expenditures, except (1) capital expenditures in 2022 in an amount not in excess of 5% of the aggregate amount set forth in the Company’s 2021 capital budget plan and (2) subject to prior consultation with Parent, any additional capital expenditures not described in clause (1) so long as the aggregate amount of such capital expenditures made pursuant to this clause (2) do not exceed $15 million; provided, however, subject to prior consultation with Parent, that the Company and its Subsidiaries shall be permitted to make emergency capital expenditures in any commercially reasonable amount that the Company determines is necessary to maintain its ability to operate its businesses in the Ordinary Course of Business;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, other than Contracts entered into in the Ordinary Course of Business; provided, however, that in no event may the Company take any of the foregoing actions with respect to any Tax “hold harmless,” sharing, allocation or indemnification agreement or arrangement (other than, in each case, (x) such agreements or arrangements solely between or among the Company and any of its Wholly Owned Subsidiaries, (y) such agreements or arrangements contained in commercial contracts entered into, amended or terminated in the Ordinary Course of Business the principal subject of which is not Taxes and (z) customary Tax indemnification or Tax benefit provisions contained in merger agreements, stock purchase agreements, asset purchase agreements or other business combination agreements entered into in accordance with Section 7.1(a)); provided, further, that in the event that the Company engages in any discussion to enter into any new JV (and prior to requesting Parent’s written consent to enter into the relevant limited liability company agreement to establish such JV) the Company shall notify Parent of any such discussion as soon as reasonably practicable following such discussion (including, for the avoidance of doubt, any discussions disclosed in Section 5.11(a)(xiii) of the Company Disclosure Letter);
(xii) terminate, fail to renew or amend, modify, supplement or waive, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in, any Material Contract, other than terminations, expirations or non-renewals of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company, any of its Subsidiaries or other party to such Contract, except for any ministerial actions or non-exclusive licenses under Company Intellectual Property, in each case, granted by a licensor in the Ordinary Course of Business;
(xiii) cancel, modify or waive any debts or claims held by or owed to the Company or any of its Subsidiaries having in each case a value in excess of $2,000,000 individually or $10,000,000 in the aggregate outside the Ordinary Course of Business;
(xiv) other than in the Ordinary Course of Business, reduce the amount of insurance coverage or fail to use commercially reasonable efforts to renew or replace any existing Insurance Policies;
(xv) other than with respect to Transaction Litigation, any Proceeding in connection with, arising out of or otherwise related to a demand for appraisal under Section 262 of the DGCL or any Tax claim, audit, assessment or dispute, which shall be governed by Sections 7.15, 4.3(f) and 7.1(a)(xvii), respectively, settle or compromise any Proceeding for an amount in excess of $2 million individually or $10 million in the aggregate, or which would reasonably be expected to (A) prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement, (B) have a materially negative impact or impose any material restriction on the operations of the Company and its Subsidiaries or (C) involve any criminal liability, any admission of material wrongdoing or any material wrongful conduct by the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(xxvi) make any material changes with respect to any method of Tax accounting policies, procedures, methods, principals or financial accounting policies or procedurespractices, except as required by changes in GAAP or Law or by a Governmental Entityapplicable Law;
(xixvii) except with respect to any litigationmake, audit, claim, action change or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make revoke any material Tax election, ; change an annual Tax accounting period; adopt or change any material Tax accounting method; file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, ; enter into any closing agreement with respect to material Taxes; settle or compromise any material amount of Tax claim, audit, assessment or dispute; surrender any right to claim a refund for of a material amount of Taxes; or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax;
(xiiixviii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject except as required pursuant to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose the terms of any assetsCompany Benefit Plan in effect as of the date of this Agreement, product lines as may be required to comply with applicable Law or businesses as set forth on Section 5.13(a) of the Company or its SubsidiariesDisclosure Letter, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensationcompensation or consulting fees, bonus bonus, pension, welfare, fringe or benefits ofother benefits, severance or make, grant or amend in termination pay of any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practiceEmployee, (CB) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereofbecome a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company Benefit Plan Plan, (other than routine changes D) take any action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or equity for the benefit of benefits under any Person or funding of any Company Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof)Plan, (DE) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP, (F) forgive any loans or issue any loans to any Company Employee (other than routine travel advances issued in the Ordinary Course of Business), (G) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of $200,000 or (EH) except as required by Lawterminate the employment or service of any Company Employee with an annual salary or wage rate or consulting fees in excess of $200,000 other than for cause;
(xix) become a party to, establish, adopt, enter into amend, commence participation in or amend terminate any collective bargaining agreement, agreement or other agreement with a labor union, planlabor organization, trust, fund, policy works council or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws)organization;
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business business;
(xxi) amend, terminate or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in allow to lapse any material respect, the operations of Licenses held by the Company or any of its Subsidiaries;
(a) other than new Contracts with customers or suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Sources: Merger Agreement (LHC Group, Inc)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof of this Agreement and until the earlier of prior to the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned)and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the Company shall, business of it and shall cause its Subsidiaries to, conduct their business shall be conducted in all material respects in the ordinary and usual course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and its Subsidiaries shall cause its Subsidiaries, to use their respective commercially reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates. Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its termsTime, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (CB) Buyer as Parent may approve in writing (such approval not to be unreasonably withheld, delayed withheld or conditioneddelayed) or (DC) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause not permit its Subsidiaries not to:
(i) amend or otherwise change, or authorize adopt or propose to amend or otherwise any change in its articles of association, certificate of incorporation, bylaws incorporation or by-laws or other applicable governing documentsinstruments;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, merge or consolidate the Company or any of its Subsidiaries with any other Person Person, except for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any of agreements or arrangements imposing material changes or restrictions on its Subsidiariesassets, operations or businesses;
(iii) acquire (by mergerassets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $100,000 in any transaction or series of related transactions, scheme other than acquisitions pursuant to Material Contracts in effect as of arrangement, consolidation, acquisition the date of stock this Agreement or assets or otherwisepursuant to Section 6.1(a)(x) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangementbelow;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant grant, transfer, lease, license, guarantee or transfer of encumbrance of, any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests shares by a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary in Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than upon the ordinary course exercise of business and in a manner Company Options or warrants to purchase Shares that would not have any material Tax consequences)are outstanding on the date of this Agreement;
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $500,000;
(vi) make or forgive any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to the Company or any direct or indirect wholly wholly-owned Subsidiary of the Company Company) in excess of $500,000 in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceaggregate;
(vivii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests capital stock (except for cash dividends paid by any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly wholly-owned Subsidiary in the ordinary course of business consistent with past practiceSubsidiary) or enter into any agreement with respect to the voting of its capital stock or other equity interestsstock;
(viiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viiiix) incur any Indebtedness indebtedness for borrowed money or guarantee such Indebtedness indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences)Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness indebtedness for borrowed money under incurred in the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount ordinary course of business consistent with past practices not to exceed an aggregate principal amount of $15 million500,000 in the aggregate;
(ixx) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures as set forth in the current capital forecast budgets set forth in Section 6.1(a)(ix6.1(i)(x) of the Company Disclosure Letter and consistent therewith, make or (B) expenditures made authorize any capital expenditure in response to excess of $500,000 in the aggregate during any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity12 month period;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xii) except for non-exclusive standard license agreements with customers that are entered into in the ordinary course of business upon terms and royalty rates that are consistent with the Company's past practice and do not include any cross-license of existing Intellectual Property of the licensee, and that are not individually material to the extent business of the Company, enter into any new license agreement with respect to the Intellectual Property or IT Assets of the Company;
(xiii) amend any existing license agreement with respect to the Intellectual Property or IT Assets of the Company other than in the ordinary course of business consistent with past practice and in a manner that is not adverse to the Company;
(xiv) make any changes with respect to accounting policies or any material change in accounting procedures, except as required by Lawchanges in GAAP;
(xv) except in the ordinary course of business consistent with past practice, settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $250,000 (net of insurance coverage), or any disputed obligation or liability of the Company in excess of such amount;
(xvi) other than in the ordinary course of business consistent with past practice, amend, modify or terminate any Material Contract, or cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $250,000;
(xvii) make any material Tax election, change an annual accounting period, file any material amended income Tax Return, enter into any closing agreement, waive or extend any statute of limitation with respect to Taxes, settle or compromise any material amount Tax liability, claim or assessment (other than the payment in the ordinary course of Tax Liabilitybusiness of Taxes that are due and payable), enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of TaxTaxes;
(xiiixviii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien)pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses (other than licenses to customers that lapse or expire in accordance with their terms), operations, rights, product lines lines, businesses or businesses interests therein of the Company or its Subsidiaries, with a value in excess including capital stock of $50 million in the aggregateany of its Subsidiaries, except for (A) sales and non-exclusive licenses in connection with the sale of Company products and services of the Company and its Subsidiaries in the ordinary course of businessbusiness and sales of obsolete assets and except for sales, (B) any abandonment leases, licenses or other dispositions of Intellectual Property that the Company or any Subsidiary determines assets with a fair market value not in excess of $500,000 in the exercise aggregate, other than pursuant to Contracts in effect prior to the date of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of businessthis Agreement;
(xivxix) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement and set forth in Section 5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (Ai) grant, increase grant or provide any retention, change of control, severance or termination payments or benefits to any director, consultant officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (Bii) increase in any manner the compensation, bonus or pension, welfare, severance or other benefits of, or make, grant or amend in pay any respect any equity or equity-linked awards (including changing the vesting criteria thereof) bonus to, or grant or increase make any bonuses to, new equity awards to any director, consultant officer or employee of the Company or any of its Subsidiaries, except (1) for increases in the case of employees or consultants who are not executive officers of the Company, base salary in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of for employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practicenot officers, (Ciii) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, amend or terminate or amend any Benefit Plan or amend the terms of any outstanding equity-based awards, (other than routine changes iv) take any action to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment payment, or fund or in any other way secure the payment, of any compensation or equity for the benefit of any Person or funding of benefits under any Benefit Plan (except (x) as required in connection with the termination of the Arris GroupPlan, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as extent not already provided in effect on the date hereof)any such Benefit Plan, (Dv) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP; or (Evi) except as required by Law, establish, adopt, enter into or amend forgive any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former loans to directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(axx) other than new Contracts with customers knowingly take any action or suppliers in the ordinary course of business consistent with past practice, enter into omit to take any Contract action that would have been a Material Contract had it been entered into prior is reasonably likely to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or result in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the Company conditions to the Merger set forth in Article VIII not being satisfied or its Subsidiaries in effect as is reasonably likely to prevent the consummation of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Merger; or
(xxvxxi) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Prior to making any written or material oral communications to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement (other than an oral communication with any individual director, officer or employee), the Company shall provide Parent with a copy of the intended communication; Parent shall have a reasonable period of time to review and comment on the communication; and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Parent shall not knowingly take or permit any of their its Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this AgreementMerger.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Interim Operations. (a) Except (i) as (x) required by applicable Law, (y) otherwise expressly required by this Agreement or (z) otherwise set forth in Section 6.1 7.1(a) of the Company Disclosure Letter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to comply with applicable Law, any Order or any written notice from a Governmental Entity or (iv) with the Company covenants and agrees that, after the date hereof and until the earlier prior written consent of the Effective Time or the termination of this Agreement in accordance with its terms Parent (unless Buyer which consent shall otherwise approve in writing, such approval not to be unreasonably withheld, withheld delayed or conditioned), during the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, period from the date of this Agreement until the earlier of the Effective Time or and the date of termination of this Agreement in accordance with Section 10.1, the Company shall, and shall cause each of its termsSubsidiaries to, except as conduct its respective business in all material respects, in the ordinary course.
(Ab) required by applicable Law or as contemplated by the Scheme Document Annex, Except (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (Di) as set forth in Section 6.1 7.1(b) of the Company Disclosure Letter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to comply with applicable Law, any Order or any written notice from a Governmental Entity, or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld delayed or conditioned), during the period from the date of this Agreement until the earlier of the Effective Time and the date of termination of this Agreement in accordance with Section 10.1, the Company will shall not, and shall not and will cause permit any of its Subsidiaries not to:
(i) amend (A) adjust, split, combine or otherwise change, reclassify its capital stock or authorize or propose to amend or otherwise change its articles the capital stock of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
; (iiiB) acquire (by merger, scheme declare or pay any dividend or make any other distribution in respect of arrangement, consolidation, acquisition the shares of its capital stock or assets any securities or otherwise) any corporation, partnership obligations convertible into or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of exchangeable for any shares of its capital stock of the Company (including Ordinary Shares) or except for any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests distribution by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company); (C) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except for the acquisition of Company Common Stock (1) tendered in connection with a cashless exercise of Company Options or in order to pay Taxes with respect to equity-based awards, or for the Company to satisfy withholding obligations in respect of such Taxes, in connection with Company Options or other equity-based awards or (2) in connection with the forfeiture of equity-based awards granted pursuant to the Company Equity Plans); or (D) except for transactions solely between the Company and its Subsidiaries, or between Subsidiaries of the Company, issue, deliver, sell, pledge, dispose of, grant, award or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including restricted stock units, stock appreciation rights, phantom stock or similar instruments), of the Company or any of its Subsidiaries (except for issuances (1) of shares of Company Common Stock upon the exercise or settlement of Company Options, rights under the Company ESPP or pursuant to other equity-based awards in effect on the date hereof, (2) required to be made by virtue of the consummation of the Merger or the Offer, or (3) required to be made pursuant to this Agreement or any other agreement in effect on the date hereof to which the Company is a party, or otherwise permitted by this Section 7.1(b));
(ii) sell, transfer, mortgage, encumber, dispose of or otherwise subject to any Lien (other than a Permitted Lien) any of its material assets or material properties (other than to a wholly owned Subsidiary), by merger, consolidation, asset sale or other business combination (including formation of a joint venture) or cancel, release or assign any material Indebtedness or claim, in each case, except (A) such actions in the ordinary course of business consistent with past practice, including dispositions of obsolete or worthless assets, sales of receivables and other assets in the ordinary course of business and the licensing of Company Intellectual Property to customers in the ordinary course of business, (B) sales of immaterial assets for a manner that would not have purchase price of $2,000,000 or less in any single case or $8,000,000 in the aggregate and (C) leases and subleases of real property owned by the Company or any Company Subsidiary and leases of real property under which the Company or any Company Subsidiary is a tenant or a subtenant and voluntary terminations or surrenders of such leases;
(iii) make any acquisition, by purchase or other acquisition of stock or other equity interests, by merger, joint venture, consolidation, asset purchase or other business combination, or by contributions to capital, or make any material Tax consequencespurchases of any property or assets, in or from any other Person other than a wholly owned Subsidiary of the Company, except (A) in all cases as expressly required by the terms of any Contract in force on the date of this Agreement; and (B) as otherwise permitted by this Section 7.1(b);
(iv) enter into, renew, extend, amend or terminate any Contract that is or would constitute a Material Contract, in each case other than in the ordinary course of business;
(v) make except as required by Law or forgive any loansContract in effect on the date hereof (including, advances without limitation, this Agreement and the Company Benefit Plans and Employment Agreements) or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary as set forth on Section 7.1(b)(v) of the Company Disclosure Letter: (A) amend materially or terminate any Company Benefit Plan or material Employment Agreement, or establish, adopt or enter into any employment agreement or any plan, program, policy or arrangement that, if in effect on the date of this agreement, would be a material Company Benefit Plan or material Employment Agreement, (B) enter into any collective bargaining agreement or similar material labor agreement with a labor union, works council or other employee representative, or (C) increase the salary or wages, as applicable, bonus or other incentive compensation, or other benefits or compensation of any director, officer or employee of the Company or any of its Subsidiaries, except for (i) increases in the ordinary course of business consistent with past practice in connection with annual performance and salary reviews, not to exceed, in a manner that would not have the aggregate, four percent (4%) of such person’s compensation or (ii) non material increases in benefits or compensation made in the ordinary course of business;
(vi) amend the Company Charter or Company By-Laws;
(vii) incur any material Tax consequences) other than extending trade credit to customers and advancing business expenses to employeesIndebtedness, except, in each case, (A) intercompany guarantees or intercompany “keep well” or other agreements to maintain any financial statement condition of the Company or any Company Subsidiary, (B) letters of credit or guarantees issued in the ordinary course of business, (C) Indebtedness incurred through the revolving credit facility under the Credit Agreement (including in respect of letters of credit), (D) Indebtedness having an aggregate principal amount outstanding that is not in excess of $2,500,000 (provided that any such Indebtedness is prepayable without premium or penalty, other than customary breakage costs), (E) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date hereof (other than the Notes under the Notes Indenture or the Credit Agreement) or permitted to be incurred, assumed or otherwise entered into hereunder (provided that any such Indebtedness is prepayable without premium or penalty, other than customary breakage costs) and (F) capital leases entered into in the ordinary course of business consistent with past practice;
(viviii) declarechange any material method of Tax accounting, set asideor take any material position on any material Tax Return, make in each case that is inconsistent with elections made or pay any dividend positions taken in preparing or other distribution, payable filing similar Tax Returns in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or prior periods; enter into any closing agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide settle or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have compromise any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security liability of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances agree to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize any extension or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) waiver of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes statute of limitations with respect to any method the assessment or determination of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax LiabilityTaxes, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, with a value in excess of $50 million in the aggregate, each case except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xivix) (A) grantmake any material changes in its accounting methods, increase practices or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedpolicies, except as may be required by under GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(Einterpretation thereof), including pursuant to standards, guidelines and interpretations of the Company shall not, and shall not permit Financial Accounting Standards Board or any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangementsorganization;
(xvx) grant a license of waive, settle or compromise any material Intellectual Property owned by the Company pending or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse threatened suit, audit, action or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000claim, other than waivers, settlements or compromises that involve only the agreements expressly contemplated payment of monetary damages by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries;
(axi) other than new Contracts with customers fail to maintain and protect, or suppliers abandon, allow to lapse, expire or be cancelled any registration or application for registration for, material Company Intellectual Property, or knowingly disclose to any Person not an employee of, or consultant or advisor to, the Company or any of its Subsidiaries bound by confidentiality obligations to the Company or such Subsidiary, or otherwise knowingly disclose any trade secret, process or know-how not a matter of public knowledge prior to the date of this Agreement, except pursuant to judicial order or process or commercially reasonable disclosures in the ordinary course of business consistent with past practice, enter into any made under an existing Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in agreement containing confidentiality obligations for the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program benefit of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiumsSubsidiary, as applicable, are in full force and effect;
(xxivxii) not exercise any rights under Section 5 or Section 6 communicate with employees of the Company’s current articles Company or any of association or otherwise adopt or implement any “poison pill” its Subsidiaries regarding the future compensation, benefits or other shareholder rights plan treatment that they will receive following the Merger Closing, other than (i) any such communication which is consistent with prior directives or otherwise issue documentation provided to the Company by Parent (in which case, Parent shall provide the Company with reasonable prior notice of, and the reasonable opportunity to review and comment upon, any Rights such communication), (ii) any such communication which addresses any employee’s right to receive the Offer Price or the Merger Consideration or any employee’s treatment of his or her equity awards, (iii) any such communication which addresses any employee in their capacity as defined a Stockholder of the Company or (iv) any communication regarding matters addressed in the Company’s current articles Section 8.4 of association) or similar interests or rights)this Agreement; or
(xxvxiii) agreeagree to, authorize or commit to do make any commitment to, take any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated actions prohibited by this AgreementSection 7.1(b).
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 1 contract
Interim Operations. (a) Except From the date hereof until the Closing Date or the earlier termination of this Agreement (the “Interim Period”), except as set forth on Schedule 6.01(a) or as contemplated by this Agreement, Seller shall (x) required by applicable Lawuse commercially reasonable efforts to cause the Targets to conduct the Business only in the ordinary course of business in all material respects, (y) otherwise expressly required by this Agreement or use its commercially reasonable efforts to preserve the present business operations of the Business, its work force, and relations with suppliers and customers and (z) otherwise set forth in Section 6.1 cause each of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier Targets not to undertake any of the Effective Time or the termination of this Agreement in accordance with its terms following without Buyer’s written consent (unless Buyer which consent shall otherwise approve in writing, such approval not to be unreasonably withheld, conditioned or delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, conduct their business in the ordinary course consistent with past practice and in compliance with all not be required if seeking such consent would violate applicable Laws and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries, to use their respective reasonable best efforts to preserve their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:Law):
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing organizational documents;
(ii) mergeissue, enter into any scheme of arrangement sell, deliver or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company or transfer any of its Subsidiariesequity interests or other securities;
(iii) acquire (by mergersplit, scheme combine, or reclassify any of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any its outstanding equity interests or repurchase, redeem or otherwise acquire any of any Person or enter into any joint venture or similar arrangementits equity interests;
(iv) issueadopt a plan of complete or partial liquidation or resolutions providing for or authorizing a liquidation, selldissolution, pledge or otherwise encumber or subject to any Lien (whether through the issuance or granting of optionsmerger, warrantsconsolidation, commitmentsrestructuring, subscriptions, rights to purchase or otherwise), dispose of, grant, transferrecapitalization, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences)reorganization;
(v) make incur, guarantee, or forgive assume any loans, advances Indebtedness except for any (A) Indebtedness that will be paid off or capital contributions terminated or will no longer be binding on the Targets at or prior to or investments in any Person the Closing and (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequencesB) other than extending trade credit to customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practiceIntercompany Indebtedness;
(vi) declarecreate, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect permit to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectlybe created, any of its capital stock, Company Securities or any Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any Indebtedness or guarantee such Indebtedness of another Person (except with respect to obligations of wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a Lien (other than a Permitted Lien), surrendera Statutory Lien or a Lien that will be terminated at or prior to the Closing) against any of the material assets or properties of any of the Targets, divest, cancel, abandon or allow any such material assets or properties to lapse become subject to any Lien (other than a Permitted Lien, a Statutory Lien or expire a Lien that will be terminated at or prior to the Closing);
(vii) sell, transfer, convey or otherwise dispose of any assets, product lines material assets or businesses properties of any of the Company or its Subsidiaries, with a value in excess Targets other than the sale of $50 million in inventory and the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions disposition of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries assets in the ordinary course of business;
(xivviii) fail to maintain its limited liability company, partnership or corporate existence, as applicable, or consolidate with any other Person;
(ix) acquire all or substantially all of the assets or stock of any other Person;
(x) purchase any securities of any Person, except for short term investments made in the ordinary course of business;
(xi) enter into, terminate or amend in any material respect any Material Contract, except any such Material Contract that is entered into, terminated or amended in the ordinary course of business;
(xii) other than as provided on Schedule 6.01(a)(xii), (A) grant, increase the salary or provide other compensation of any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company Targets or (B) grant any bonus, benefit or other direct or indirect compensation to any employee of its Subsidiariesthe Targets;
(xiii) other than as provided on Schedule 6.01(a)(xiii), except(A) increase the coverage or benefits available under an Employee Benefit Plan, (B) enter into any employment, deferred compensation, severance, special pay, consulting, non-competition or similar agreement or arrangement with any employee of the Targets (or amend any such agreement), or (C) change the number of Persons employed or engaged in the case Business (except to the extent employees resign or are terminated in the ordinary course of employees who are business); provided, however, that if there is a vacancy in a senior management or similar position, Seller shall cause the Targets not executive officers to fill such position (other than with a current or senior manager of the Company, Targets) in the ordinary course of business consistent with past practice or as required by agreementsotherwise;
(xiv) (A) make, plans, programs change or arrangements in effect on the date hereofrescind any material election relating to Taxes, (B) increase in settle or compromise any manner the compensationclaim, bonus action, suit, litigation, proceeding, arbitration, investigation, audit or benefits ofcontroversy relating to material Taxes, or make, grant or amend in consent to any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee waiver of the Company or any statute of its Subsidiaries, except limitations thereof (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as other than any such increases settlement, compromise or consent regarding Taxes that are consistent with past practicecurrently subject to an audit), (C) except as may be required by Law Law, make any change to any of its methods of reporting income or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made deductions for Tax purposes from those employed in the ordinary course preparation of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof)its most recently filed Tax Returns, (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedannual Tax accounting period, except as may be required by GAAP or (E) except as required by Lawadopt or change any method of Tax accounting, establish, adopt, (F) obtain any Tax ruling or enter into any closing agreement or (G) amend any collective bargaining agreement, labor union, plan, trust, fund, policy material Tax Returns or arrangement file claims for the benefit of any current or former directors, consultants, officers or employees or material Tax refunds (other than any of their beneficiaries; provided, however, that notwithstanding anything Tax Return currently subject to the contrary in the foregoing clauses (A)-(Ean audit), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(xv) grant a license enter into any commitment for capital expenditures in excess of any material Intellectual Property owned by the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practicethose set forth on Schedule 6.01(a)(xv);
(xvi) allow institute, settle or compromise any lapse or abandonment of Action, (A) in a manner that would result in any material Intellectual Property, restrictions on the conduct of the Business as it is currently being conducted or (B) in an amount in excess of $500,000 for any registration or grant thereof, or individual Action (other than as to any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any Action for which such lapse or abandonment made amount is assumed by the Company or any Subsidiary thereof in the exercise of its reasonable business judgmentSeller);
(xvii) enter into any transaction with any Affiliate of the Company (other than any of change or modify its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) current credit, collection or named executive officer (as defined in 17 CFR 229.402) of the Company (payment policies, procedures or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the planning of such a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, practices in any material respect, the operations including such policies, procedures or practices, acceleration of the Company collections or any of its Subsidiaries;
receivables (a) other than new Contracts with customers whether or suppliers in the ordinary course of business consistent with not past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (b) other than in the ordinary course of business consistent with past practice or expirations of any such Contract in the ordinary course of business consistent with past practice in accordance with the terms of such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policydue) or self-insurance program fail to pay or delay payment of the Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” payables or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s current articles of association) or similar interests or rights)Liabilities; or
(xxvxviii) agree, authorize or commit agree to do any of the foregoinganything prohibited by this Section 6.01.
(b) Neither Buyer nor Company shall knowingly take Without in any way limiting Buyer’s or permit any of their Subsidiaries to take any action that is reasonably likely to prevent Seller’s rights or materially interfere with the consummation of the transactions contemplated by obligations under this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to , Buyer at the Closing and Seller understand and agree that (i) executed affidavits dated as during the Interim Period, nothing contained in this Agreement shall give Buyer, directly or indirectly, the right to control or direct the operation of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, Business and (ii) executed affidavits dated as during the Interim Period, Seller and the Targets shall exercise, consistent with the terms and conditions of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter (as such schedule may be reasonably amended prior to the Closing Date)this Agreement, certifying that each such Subsidiary does not own any U.S. real property icomplete control and supervision over their respective businesses and operations.
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