Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to: (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company); (ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions); (iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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; (v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements; (vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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); (ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions; (x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 4 contracts
Sources: Merger Agreement, Merger Agreement (Twenty-First Century Fox, Inc.), Merger Agreement (Walt Disney Co/)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2a) 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 disclosed in Section 5.01(a) business of the Company Disclosure Letter)and its Subsidiaries shall be conducted in the ordinary and usual course, (b) each of the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business in the ordinary course of preserve its business consistent with past practice, organizations and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization assets intact and maintain the Retained Business’ its rights, franchises, powers and privileges and its existing relations and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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.
, and (bc) subject to Section 5.10, the Company and its Subsidiaries shall take no action that would reasonably be expected to adversely affect or materially delay the ability of the Company to obtain any necessary approvals of any Regulatory Authorities or other Governmental Authority required for the transactions contemplated hereby, to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) expressly required by applicable this Agreement or as required by Law, (2B) expressly required by the Transaction Documents as Parent may approve in writing (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld or delayed) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 5.01 of the Company Disclosure Letter)Schedule, the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 4 contracts
Sources: Merger Agreement (CU Bancorp), Merger Agreement (Pacwest Bancorp), Merger Agreement (Square 1 Financial Inc)
Interim Operations. (a) The Each of the Company covenants and agrees Parent covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent the Company or Parent, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement, as may be required by applicable LawLaw or as set forth in Section 7.1(a) of such Party’s Disclosure Letter, (2i) expressly required by the Transaction Documents (including in connection with the Separation each Party and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, will use its commercially reasonable best efforts to conduct the Retained Business its business in all material respects in the ordinary course of business consistent with past practice, Ordinary Course and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, such Party and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorslicensors, licensorslicensees, creditors, lessors, employees Service Providers and business 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 its and its Subsidiaries’ present employees Service Providers and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the generality of, of and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatof Section 7.1(a), from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless Parent shall otherwise approve w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) approved in writing, writing by the other Party (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company such Party’s Disclosure Letter), the Company each Party, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to 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 materially impair the ability of such Party to consummate the Transactions, the Organizational Documents of any of such Party’s Subsidiaries, including, in the case of Parent, Parent Sub’s or LLC Sub’s Organizational Documents;
(ii) except for any such transactions among its direct or indirect wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with respect any other Person, or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets from any other Person (A) 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), in each case, including any amounts or value reasonably expected to SpinCo and 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 SpinCo Subsidiaries (ability of such Party to consummate the Transactions, other than than, in the case of clause (A))) (w) acquisitions in the Ordinary Course of inventory or other parts and accessories necessary for the ongoing operation of the business of such Party and its Subsidiaries, (x) acquisitions in order to maintain and sustain such Party’s and its Subsidiaries’ rigs and equipment in the Ordinary Course, (y) acquisitions pursuant to Material Contracts as in effect on the date of this Agreement and (z) transactions among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or 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 (A) amend Encumbrances that are required by or automatically effected by the Company Credit Agreements, which shall be released at or prior to the Closing or (B) the issuance of shares (x) by its certificate direct or indirect wholly owned Subsidiary to it or another of incorporation its direct or bylaws indirect wholly owned Subsidiaries, (y) in respect of equity-based awards outstanding as of the date of this Agreement, or comparable governing documents(z) granted in accordance with Section 7.1(b)(xvi) in each of clauses (y) and (z), 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 amendments to any Permitted Encumbrances) over any material portion of such Party’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the governing documents Ordinary Course on any of its assets or any Subsidiary of its Subsidiaries, except for Encumbrances (A) that are required by or automatically effected by Contracts in place as of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)date hereof, (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of that do not materially detract from the Company which remains a wholly owned Subsidiary after consummation value of such transaction), assets or (C) that do not materially impair the operations of such Party or any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its direct or indirect wholly owned Subsidiaries or to or from Parent and any of its direct or indirect wholly owned Subsidiaries, as applicable, or in accordance with Section 7.1(b)(xvi)) in excess of $1,000,000 individually or $2,000,000 in the aggregate;
(vii) except to the extent expressly provided by, and consistent with, Section 7.1(b)(vii) of such Party’s Disclosure Letter, declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company modify in any material respect its dividend policy;
(viii) reclassify, split, combine, subdivide or redeem, purchase (2through such Party’s share repurchase program or otherwise) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toto (A) the capital stock or other equity interests of a direct or indirect wholly owned Subsidiary of such Party or (B) the acquisition of shares of Company Common Stock or Parent Common Stock, as applicable, tendered by Service Providers in connection with a cashless exercise of the Company Restricted Stock UnitsOption Awards or Parent Options, as applicable, outstanding as of the date of this Agreement or in order to pay Taxes in connection with the exercise or vesting of Company Deferred Stock Units Equity Awards or Company Performance Stock UnitsParent Equity Awards, in each case as applicable, outstanding as of the date of this Agreement or granted in accordance with past practice and with Section 7.1(b)(xvi), pursuant to the terms of the Company Stock Plans or Parent Stock Plans, as applicable, and the applicable award agreement, in effect on the date Ordinary Course;
(ix) 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 in excess of $100,000,000 in the aggregate during any consecutive 12 month period (other than capital expenditures within the thresholds set forth in Section 7.1(b)(ix) of such Party’s Disclosure Letter), (B) not in excess of $25,000,000 (net of insurance proceeds) in the aggregate that such Party reasonably determines are necessary to avoid a material business interruption or maintain the safety and integrity of any asset or property or (C) paid by any direct or indirect wholly owned 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 other Party prior to making or agreeing to any such capital expenditure);
(x) other than in connection with any transaction or potential transaction described in Section 7.1(b) of such Party’s Disclosure Letter, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement Agreement, adversely amend, modify or supplement in any material respect, or waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, any material right or interest pursuant to or in, any Material Contract other than (or as modified after A) expirations and renewals of any such Contract in the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate such Contract (other than transactions any Contract of the type contemplated by referenced in 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions5.17(a)(ii);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 non-exclusive licenses under Intellectual Property owned by the Company or any of its Subsidiaries, (C) increase the compensation, bonus Subsidiaries or pension, welfare or other benefits of any director, officer or employee of the Company Parent or any of its Subsidiaries, except as applicable, in each case, granted to customers in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 compensationOrdinary Course, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (GC) forgive any loans to directors, officers agreement among such Party and its direct or employees of the Company indirect wholly owned Subsidiaries or any of its among such Party’s direct or indirect wholly owned Subsidiaries;
(ivxi) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than in the ordinary course of business consistent Ordinary Course or with past practice in a principal amount respect to amounts that are not material 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 such Party and its Subsidiaries, taken as a whole, than existing Indebtednesscancel, 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 a maturity date the parameters set forth in Section 7.1(b)(xii) of such Party’s Disclosure Letter; provided, that no more than 10 years after 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 date business operations of the Contract evidencing such IndebtednessParty and its Subsidiaries or Affiliates;
(xiii) amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(xiv) (A) make, change or revoke any material election with respect to Taxes or Tax matters, (B) except change any material Tax accounting method or period, (C) enter into any material closing agreement with respect to Taxes, (D) enter into any material Tax sharing, allocation or indemnification agreement or arrangement, (E) settle, compromise or otherwise finally resolve any material Tax claim, audit, assessment or dispute, (F) surrender any right to claim a refund of a material amount of Taxes, (G) change its tax residency, or (H) fail to file when due (taking into account any available extensions that do not result in the Bridge Facilityimposition of a penalty) any material Tax Return;
(xv) transfer, in replacement sell, lease, divest, cancel, abandon, allow to lapse or expire or otherwise dispose of, or permit or suffer to refinanceexist the creation of any Encumbrance upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for in connection with (A) sales of or non-exclusive licenses of the foregoing provided to customers in the Ordinary Course, (B) sales of obsolete assets, (C) sales, leases, non-exclusive licenses or other dispositions of any properties or assets (excluding capital stock not including services or sales of inventory in the Retained SubsidiariesOrdinary Course) with a fair market value not in excess of $50,000,000 individually if the transaction is not 10,000,000 in the ordinary course or $100,000,000 individually aggregate other than pursuant to Material Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on 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 existing terms of any Benefit Plan as in effect on the date of this Agreement, as expressly permitted under this Agreement or as required by applicable Law, increase or change the compensation or benefits payable to any Service Provider other than in the Ordinary Course; provided, that, notwithstanding the foregoing, except as expressly disclosed in Section 7.1(b)(xvi) of such Party’s Disclosure Letter or required pursuant to a Company Benefit Plan or Parent Benefit Plan, as applicable, in effect as of the date of this Agreement, the Parties shall not: (A) grant any new long-term incentive or equity-based awards and or amend or modify the terms of any outstanding awards under any Company Stock PlansBenefit Plan or Parent Benefit Plan, as applicable, (B) Investment Preferred Stock (as defined in the Bridge Facility) 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 (other than severance plans) that are generally applicable to all salaried Service Providers in the Ordinary Course), (D) terminate, enter into, amend, modify 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 adopt any compensation or benefit plan, program, policy, agreement or arrangement that would be a material Benefit Plan if it were in existence as of the date hereof, (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 wholly owned Subsidiaries 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 an 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 individual;
(xvii) recognize any labor union, works council, or other labor organization or employee representative as the representative of any of the employees of the Party or its Subsidiaries, or become a party to, establish, adopt, amend, commence negotiations for or terminate any collective bargaining agreement or other labor-related Contract with a labor union, works council, or other labor organization or employee representative;
(xviii) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security) or guarantee any such Indebtedness, except for (A) Indebtedness for borrowed money incurred in the Ordinary Course under the Company’s or Parent’s, as applicable, revolving credit facilities and other lines of credit (including equipment loans) existing as of the date of this Agreement, (B) guarantees by the Company or to any direct or indirect wholly owned Subsidiary of the Company of Indebtedness of the Company or any other direct or indirect wholly owned Subsidiary of the Company; provided that, for (C) guarantees by Parent or any direct or indirect wholly owned Subsidiary of Parent of Indebtedness of Parent or any other direct or indirect wholly owned Subsidiary of Parent, (D) Indebtedness incurred in connection with a refinancing or replacement of existing Indebtedness (but in all cases which refinancing or replacement shall not increase the avoidance aggregate amount of doubtIndebtedness, granting customary profit participation rights plus fees, expenses, premium and accrued and unpaid interest in respect of the Indebtedness being refinanced or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not replaced, permitted 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);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) outstanding thereunder 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 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 businesson customary commercial terms), 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(xE) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinIndebtedness
Appears in 4 contracts
Sources: Merger Agreement (Nextier Oilfield Solutions Inc.), Merger Agreement (Patterson Uti Energy Inc), Merger Agreement (Nextier Oilfield Solutions Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) this Agreement or (3) otherwise expressly disclosed in Section 5.01(a6.1(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct its business and the Retained Business business of its Subsidiaries in the ordinary course of business consistent with past practice, practice and each of the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessshall, subject to compliance with the specific matters set forth below, use commercially reasonable best efforts to preserve the Retained Business’ its business organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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) it and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time Time, except (unless A) as required by applicable Law, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law), (2C) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise as expressly disclosed in Section 5.01(b6.1(a) of the Company Disclosure Letter)Letter or (D) as expressly provided for in this Agreement, the Company shall not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate articles of incorporation or bylaws code of regulations (or comparable governing documents) (other than immaterial amendments to the governing documents of any wholly owned Subsidiary of the Company that would not prevent, materially delay or materially impair the Initial Merger or the other Transactionstransactions contemplated by this Agreement), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) other than normal semiannual quarterly cash dividends on the Common Stock Company’s Shares as described in Section 5.01(b)(i6.1(a)(i)(C) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, stock or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the cashless exercise of Company Options or the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock UnitsOptions, Company Deferred Restricted Stock Units or Company Performance Stock UnitsUnits in connection with any Taxable event related to such awards, in each case in accordance with past practice and with the terms of the applicable Company Stock Plans Plan 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, of any wholly owned Subsidiaries of the Company that would not (x) prevent, materially delay or materially impair the TransactionsMerger or the other transactions contemplated by this Agreement or (y) reasonably be expected to result in any significant Tax liability);
(iii) except as expressly contemplated by the terms of this Agreement, as expressly disclosed in Section 6.1(a)(iii) of the Company Disclosure Letter or as required by applicable Law or by the terms of any Company Plan listed on Section 5.1(h)(i) of the Company Disclosure Letter or any CBA, in either case as in effect on the date hereof: hereof (or as modified after the date of this Agreement in accordance with the terms of this Agreement):
(A) establish, adopt, amend increase the compensation or terminate benefits payable to any material Company Plan director or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan named executive officers as identified in the ordinary course Company’s proxy statement for the 2017 annual meeting of business consistent with past practice that does not materially stockholders (collectively, the “Senior Executives”) of the Company, increase the cost of such Company Plan compensation or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses payable to any director, officer, employee or other service provider individual consultant of the Company or any of its Subsidiaries, (C) increase the compensationor make any loans to, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees individual consultant of the Company or any of its Subsidiaries;
(B) grant any new equity-based awards, or amend or modify the terms or accelerate the vesting of any such outstanding awards (except for any acceleration of any Company Option, Company Performance Stock Unit and Company Restricted Stock Unit in connection with the cessation of any Person’s employment with the Company or any of its Subsidiaries (other than any Senior Executive) to the extent that such acceleration is consistent with past practice), under any Company Plan;
(C) amend any severance plan or agreement as in effect on the date hereof or waive or release any restrictive covenants thereunder;
(D) make any change to any Company Pension Plan or any Company Plan that is an “employee welfare benefit plan” (within the meaning of Section 3(1) of ERISA) that would materially increase the costs to the Company or any of its Subsidiaries in respect of such Company Plan;
(E) establish, adopt, or enter into any new arrangement that would be a Company Plan if in effect on the date hereof, other than individual separation and release agreements entered into in connection with ordinary-course terminations on terms consistent with the severance arrangements listed on Section 5.1(h)(i) of the Company Disclosure Schedule;
(F) accelerate the payment of non-equity related compensation or benefits to any director, officer, employee, consultant or individual service provider, except as required (without discretion) pursuant to the terms of the Company Plans;
(G) hire any new officer, employee, consultant or individual service provider (provided that the Company shall be permitted to (x) hire employees, consultants or other individual service providers with an aggregate annual base compensation and target incentive opportunity below $350,000 in the ordinary course of business consistent with past practice, or (y) engage individual or entity service providers with an aggregate annual base compensation and target incentive opportunity below $350,000 in the ordinary course of business consistent with past practice to fill positions that are open as of the date hereof or that become open following the date hereof to the extent reasonably necessary as determined by the Company in its sole discretion to maintain the Company’s core business); or
(H) terminate any employee or officer of the Company or any of its Subsidiaries at level B7 or higher other than for cause (as determined in the ordinary course of business consistent with past practice);
(iv) incur or guarantee 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 practice, borrowings under the Company’s revolving credit facility as 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 effect as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after of the date of the Contract evidencing such Indebtednesshereof, (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 inter-company Indebtedness among the Company and its wholly owned Subsidiaries, (C) commercial paper issued in the ordinary course of business and (D) (1i) 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 (2ii) overdraft facilities or cash management programs, in the case of each case of clauses (i) and (ii), 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 practicebusiness;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in which do not exceed during either the aggregate not in excess of 120% 2017 fiscal year or the 2018 fiscal year one hundred and five percent (105%) 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) a copy of the Company Disclosure Letterwhich was previously provided to Parent;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien (other than a Permitted Lien) upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) any of the foregoing that occur in the ordinary course non-exclusive licenses or ordinary course security interests in connection with of business or, to the production or financing of film extent applicable, among the Company and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Propertyits Subsidiaries, (B) the granting of any licenses of Intellectual Property where in the aggregate payments under such license do not exceed $125,000,000 annually per license, ordinary course consistent with past practice or (C) sales transfers, leases, sales, assignments, lapses, abandonments, cancellations, mortgages, pledges, Liens, or other dispositions of Intellectual Property (other than licenses) with a fair market value less than $35,000,000 individually if the transaction is not 10,000,000 in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held aggregate for use exclusively in the SpinCo Business and (E) Affiliation Agreementsall such actions;
(vii) other than in the ordinary course of business consistent with respect to the Retained Businesspast practice, 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries6.1(a)(vi) with a fair market value not in excess of $50,000,000 5,000,000 individually if the transaction is not or $12,500,000 in the ordinary course or $100,000,000 individually in any event or aggregate (B) other than transactions among the Company and the Retained its wholly owned 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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock UnitsOptions, Company Performance Restricted Stock Units and Company Deferred Performance Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, or (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 5,000,000 individually or $200,000,000 12,500,000 in the aggregate in any year, in each case to acquire any businessbusiness or businesses or to acquire assets or other property, whether by merger, consolidation, purchase of property or assets, licenses assets 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 its Retained Subsidiaries shall enter into make any such transaction acquisition that would, or would reasonably be expected likely to, prevent, materially delay or materially impair the consummation Company’s ability to consummate the transactions contemplated by this Agreement; provided, further that nothing in this Section 6.1(a)(ix) shall restrict the ability of the TransactionsCompany to invest additional funds in any existing asset of the Company to offset any dilution in the Company’s existing interest in such asset;
(x) make any material change with respect to its financial accounting policies or procedures, except as required by changes in GAAP (or any interpretation thereof) or by applicable Law;
(xi) except as required by applicable Law, (A) make, change or revoke any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement, in each case that is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods, except in each case as a result of, or in response to, any change in U.S. federal Tax Laws or regulations or administrative guidance promulgated or issued thereunder, (B) change any Tax accounting period or any material method of Tax accounting, (C) amend any material Tax Return, (D) settle or resolve any material Tax liability or any Tax audit or controversy with respect to a material amount of Taxes, (E) surrender any right to claim a material refund of Taxes, (F) consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries, other than any extension pursuant to an extension of time to file any Tax Return or (G) enter into any closing agreement or similar agreement with any Tax authority in respect of Taxes;
(xii) (A) enter into any new line of business other than any line of business that is reasonably ancillary to and a reasonably foreseeable extension of any line of business as of the date of this Agreement or (B) conduct a line of business of the Company or any of its Subsidiaries in any geographic area where it has never previously conducted business prior to the date of this Agreement;
(xiii) make any loans, advances or capital expenditures made contributions to, or investments in, any Person (other than loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company);
(xiv) (A) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with the terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract, other than any amendment, modification, termination, waiver, release or assignment (x) as required by Law, (y) pursuant to “most favored nation” offers made prior to the date of this Agreement or (z) in the ordinary course of business; provided that in no event shall the Company or its Subsidiaries amend or modify a Contract in which the packaging or rate terms would materially impact meeting the Company’s business plan, (B) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this 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 following the Closing) than a contract it is replacing; provided that in no event shall the Company or its Subsidiaries enter into a Contract in which the packaging or rate terms would materially impact meeting the Company’s business plan or (C) without restricting any action that is permissible in accordance with clauses (A) or (B) hereof, make any concession, or offer to make any concession, under any Material Contract except for (x) annual “most favored nation” offers made in the ordinary course of business consistent with past practice in connection with new issues arising after March 2017 or (y) mutual “clean slate” releases with distributors; provided that the foregoing shall not prohibit or restrict the ability of the Company or its Subsidiaries to take any action described in this Section 5.01(b)(v6.1(a)(xiv) in the ordinary course of business with respect to Material Contracts between the Company and/or one or more of its wholly owned Subsidiaries; provided, further that for the avoidance of doubt, this Section 6.1(a)(xiv) shall not prohibit or restrict any Company Plans;
(xv) settle any action, suit, case, litigation, claim, hearing, arbitration, investigation or other proceedings before or threatened to be brought before a Governmental Entity, or pay, discharge, settle or waive any material liability, other than settlements (A) if the amount of any such settlement is not in excess of $500,000 individually or $2,000,000 in the aggregate; provided that such settlements are solely for money damages (and confidentiality and other than purchases and licenses of film and television and production programming (includinsimilar customary provisions that would not reasonably be expected to place any material restrictions on the
Appears in 4 contracts
Sources: Voting Agreement (Newhouse Broadcasting Corp), Merger Agreement (Scripps Networks Interactive, Inc.), Voting Agreement (Discovery Communications, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned)), and except as otherwise expressly permitted by this Agreement or as required by a Governmental Entity or applicable Laws, the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary course and, to the extent consistent with the foregoing, the Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations substantially intact, maintain satisfactory relationships with Governmental Entities, NERC, PJM, customers and suppliers having significant business dealings with them and keep available the services of their key employees; provided, however, that no action taken by the Company or its Subsidiaries with respect to matters specifically addressed by clauses (1i)-(xx) of this Section 6.1(a) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. In furtherance of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), (C) as is required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Law or as contemplated by the Final Step Plan) any Governmental Entity or (3D) otherwise expressly disclosed as set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws or other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries, except for any such transactions among wholly-owned Subsidiaries of the Company;
(iii) acquire (including by merger, consolidation or acquisition of equity interests or assets or any other business combination) (A) any other Person or any organization or division of any other Person or (B) any assets outside of the ordinary course of business, other than amendments acquisitions (1) pursuant to Contracts in effect as of the governing documents date of this Agreement (copies of which have been made available to Parent), (2) made in connection with any transaction solely between the Company and a wholly-owned Subsidiary of the Company or between wholly-owned Subsidiaries of the Company or (3) that would not preventbe permissible under clause (ix) below;
(iv) issue, delay sell, pledge, dispose of, grant, transfer, encumber, or impair authorize the Initial Merger issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or the other Transactions)encumbrance of, (B) split, combine, subdivide or reclassify its outstanding any shares of capital stock (except for any such transaction by a wholly owned subsidiary or other equity interests of the Company which remains or any of its Subsidiaries (other than (A) the issuance of Shares upon the vesting, exercise or settlement of Company RSUs, Company PSUs, and Company Awards (and dividend equivalents thereon, if applicable) or (B) the issuance of shares by a wholly wholly-owned Subsidiary after consummation of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such transaction)capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(Cv) make any loans, advances or capital contributions to or investments in any Person (other than among the Company and any direct or indirect wholly-owned Subsidiary of the Company or among the Company’s wholly-owned subsidiaries) in excess of $10,000,000 in the aggregate other than loans, advances, capital contributions or investments made in the ordinary course of business;
(vi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1A) any regular quarterly dividends or distributions paid to holders of Shares in an amount and on a schedule consistent with the Company’s past practices and not in excess of $0.27 per Share per quarter, (B) a “stub period” dividend to stockholders of record as of immediately prior to the Effective Time equal to the product of (x) the number of days from the record date for payment of the last quarterly dividend paid by the Company prior to the Effective Time through and including immediately prior to the Effective Time and (y) a daily dividend rate determined by dividing the amount of the last quarterly dividend prior to the Effective Time by ninety-one (91), and (C) dividends paid by any direct or indirect wholly wholly-owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company any other direct or (2indirect wholly-owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(vii) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant the retention or acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the forfeiture ofvesting, exercise or withholding settlement of Taxes with respect toCompany RSUs, Company Restricted Stock UnitsPSUs, and Company Deferred Stock Units Awards (and dividend equivalents thereon, if applicable));
(viii) incur, assume or Company Performance Stock Units, in each case in accordance with past practice and with the terms otherwise become liable for any indebtedness for borrowed money or guarantee such indebtedness of the Company Stock Plans as in effect on the date another Person (other than 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 wholly owned Subsidiary of the Company by the Company or any other wholly a wholly-owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 (including to fund expenditures permissible under clauses (iii), (v) and (ix) of this Section 6.1(a)) or (B) other indebtedness in a an aggregate principal amount not to exceed $400,000,000 50,000,000 outstanding at any time;
(ix) except for expenditures related to operational emergencies, equipment failures or outages make or authorize any capital expenditure in excess of $100,000,000 in the aggregate at during any time outstanding on prevailing market terms calendar year;
(x) make any material changes with respect to financial accounting policies or on terms substantially consistent procedures, except as required by GAAP;
(xi) other than with respect to Rate Cases and the regulatory approval process, which are addressed in Section 6.5 and Transaction Litigation, which is addressed in Section 6.14, settle, release, waive or more beneficial to the Company and its Subsidiariescompromise any litigation claim, taken as or other pending or threatened proceedings by or before a wholeGovernmental Entity if such settlement, than existing Indebtednessrelease, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, waiver or compromise (BA) except with respect to the Bridge Facilitypayment of monetary damages, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to involves the payment by the Company and or any of its SubsidiariesSubsidiaries of monetary damages that together with all other settlements, taken as a wholereleases, than the Indebtedness being replaced waivers 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 compromises by the Company and or any of 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 Subsidiaries exceed $250,000,000 50,000,000 individually or in the aggregate at during any time outstandingcalendar year, net of any amount covered by insurance or third-party indemnification or (FB) Indebtednesswith respect to any non-monetary terms and conditions therein, imposes or requires actions that would or would be reasonably likely to have a material effect on 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations continuing operations of the Company or any of its Subsidiaries or Parent or any of its Subsidiaries after the Closing;
(xii) other than with respect to the Rate Cases, initiate, file or pursue any rate cases, or make any public announcement regarding an intent to file any rate cases;
(xiii) fail to make any regulatory filings required by Law, other than those regulatory filings that are otherwise addressed by this Agreement, except to the extent such Indebtedness failure would not have a material adverse effect on the continuing operations of the Company or any of its Subsidiaries or Parent or any of its Subsidiaries after the Closing;
(and Parent and xiv) make, revoke or amend any material Tax election, enter into any closing agreement, settlement or compromise of any claim or assessment with respect to any material Tax liability (unless such closing agreement, settlement or compromise is not materially greater than the reserves established in accordance with GAAP in respect of the claim or assessment that is the subject of such closing agreement, settlement or compromise), amend any material Tax Return, surrender a claim for a material refund of Taxes or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(xv) transfer, sell, lease, license, mortgage, 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 its Subsidiaries, including, following the Distribution, the Retained including capital stock of any of its Subsidiaries, shall not other than sales and dispositions of inventory, supplies and other assets (A) in the ordinary course of business or (B) pursuant to Contracts in effect prior to the date of this Agreement (copies of which have any obligations been made available to Parent);
(xvi) except as required pursuant to Contracts or Benefit Plans in respect thereofeffect prior to the date of this Agreement (including the Company Change in Control Severance Plan), (GA) Indebtedness under the Bridge Facilitygrant any equity awards, refinancings or replacements thereof and of commitments thereunder, and grant or provide any refinancings material severance or replacements of material termination payments or benefits to 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 executive employee of the Company Disclosure Letter; provided, further, that or its Subsidiaries who have individual employment agreements with severance or termination provisions or who participate in the Company shall consult with Parent prior to incurring Indebtedness under this clause Change of Control Severance Plan (G“Executive Employees”), (HB) Indebtedness assumed accelerate or materially increase the compensation or employee benefits of any Executive Employee, except for annual merit-based or promotion-based pay increases in the ordinary course of business, (C) establish, adopt, terminate or materially amend any Benefit Plan (other than routine changes to welfare plans or any changes to Benefit Plans that would not result in more than a de minimis increase to the Company’s costs under such Benefit Plans), including any severance benefit plan or (D) accelerate or materially increase the compensation of other employees of the Company or its Subsidiaries, except for (1) merit-based or promotion-based pay increases in the ordinary course of business, (2) acceleration or increases required by any CBA, or (3) any acceleration or increase done after consultation with Parent;
(xvii) enter into any Company Material Contract that contains a change of control or similar provision that would require a payment to any Person counterparty thereto in connection with a Sky Acquisition and refinancings the consummation of the Merger that would not otherwise be due;
(xviii) grant or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial incur any new Lien material to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced (A) pledges or refinanced; provided, further, that deposits by the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) or 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 its Subsidiaries in the ordinary course of business consistent with past practice under workmen’s compensation Laws, unemployment insurance Laws or similar Laws; (B) good faith deposits in connection with a Sky Acquisition and not Contracts (other than for speculative purposes; provided that the payment of indebtedness) to which the Company shall consult with Parent prior to entering into hedging activities or one of its Subsidiaries is a party, or (C) in connection with Indebtedness securing indebtedness permitted to be incurred under the terms of this Agreement by granting or incurring Liens on the assets of the type described utility Subsidiaries of the Company, in clauses (G) or (H) aboveeach case, (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;business; or
(vxix) with respect to the Retained Businessagree, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected foregoing.
(b) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s capital expenditure budget for or 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 its Subsidiaries’ operations. Prior to the Effective Time, each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Parent and the Company Stock Plansshall exercise, (B) Investment Preferred Stock (as defined in consistent with the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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 terms and conditions of this Section 5.01(b)(viii);
(ix) with respect to the Retained BusinessAgreement, other than capital expenditures made in accordance with Section 5.01(b)(v) complete control and other than with respect to film supervision over its and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinSubsidiaries’ respective operations.
Appears in 4 contracts
Sources: Agreement and Plan of Merger (Exelon Corp), Agreement and Plan of Merger (Potomac Electric Power Co), Merger Agreement (Potomac Electric Power Co)
Interim Operations. Except (ai) The as expressly contemplated by this Agreement, (ii) as set forth in Section 7.01 of the Company covenants and agrees Disclosure Schedule, (iii) as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2iv) expressly required as consented to in writing by the Transaction Documents (including in connection with the Separation and the Distribution Parent, which consent shall not be unreasonably conditioned, withheld or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)delayed, the Company shallagrees that, from the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms and shall cause the Effective Time:
(a) the Company and each of its Subsidiaries to, use its reasonable best efforts to shall (i) conduct the Retained Business business only in the ordinary course of business consistent with past practicepractice and (ii) use commercially reasonable efforts to (A) preserve intact its current business organization and (B) keep available the services of its current officers, employees and consultants who are important to the operation of the business; provided that no action or failure to take action by the Company shallor any of its Subsidiaries with respect to matters specifically addressed by any provision of Section 7.01(b) through (n) shall constitute a breach under this Section 7.01(a) unless such action or failure to take action would constitute a breach of such provision of Section 7.01(b) through (n), as applicable;
(b) the Company shall not amend its articles of incorporation or bylaws;
(c) the Company shall not, and shall cause each not permit any of its Subsidiaries that is not wholly owned to, authorize or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity securities (whether in cash, assets, stock or other securities of the Company or its Subsidiaries), except (i) dividends and distributions paid or made on a pro rata basis by Subsidiaries and (ii) quarterly dividends in accordance with the Company’s publicly announced dividend policy as in effect on the date of this Agreement;
(d) except for transactions exclusively among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, the Company shall not, and shall not permit any of its Subsidiaries to, solely issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock or other ownership interest in the Company or any Subsidiaries of the Company 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, take any action to cause to be exercisable any otherwise unexercisable Company Stock Option (except as otherwise provided by the terms of this Agreement or the express terms of any unexercisable options or awards outstanding on the date hereof) or otherwise make any changes (by combination, merger, consolidation, reorganization, liquidation, split, combination, reclassification, adjustment or otherwise) in the capital structure of the Company or any of its Subsidiaries or amend the terms of any securities of the Company or any of its Subsidiaries, other than issuances of shares of Common Stock in respect of any exercise of Company Stock Options outstanding on the date hereof;
(e) except to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business required by Law (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services Section 409A of the Company and its Subsidiaries’ present employees and agents.
(bCode) Without limiting the generality of, and or by Contracts in furtherance of, the foregoing, the Company covenants and agrees existence as to itself and its Subsidiaries that, from and after of the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned hereof or delayed, and which determination shall take into account the by Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter)Benefit Plans, the Company shall not and shall not permit any of its Subsidiaries to:
to (i) except with respect to SpinCo increase in any material manner the aggregate compensation and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares benefits of its capital stock (except for (1) any dividends directors or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, executive officers or employees of the Company or any of its 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 (the ordinary course including, for this purpose, the employee salary, bonus and equity compensation review process and related adjustments substantially as conducted each year), or (B) in a principal amount accordance with existing Contracts or Company Benefit Plans, (ii) pay any pension, severance or retirement benefits not required by any existing plan or agreement to exceed $400,000,000 in any such directors or executive officers, (iii) enter into, amend (other than amendments that do not materially increase the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial cost to the Company and or any of its SubsidiariesSubsidiaries of maintaining the applicable compensation or benefit program, taken as a wholepolicy, arrangement or agreement), adopt, implement or otherwise commit itself to any compensation or benefit plan, program, policy, arrangement or agreement including any pension, retirement, profit-sharing, bonus, collective bargaining or other employee benefit or welfare benefit plan, policy, arrangement or agreement or employment or consulting agreement with or for the benefit of any employee, director, consultant, independent contractor or service provider, other 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 Facilityany employment, in replacement of, severance or to refinance, existing Indebtedness on then prevailing market terms retention agreement (or on terms substantially consistent amendment 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, (Crespect thereto) 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 practicepractice between the Company or one of its Subsidiaries, on the one hand, and any consultant, independent contractor, service provider or employee of the Company or its Subsidiaries who is not an executive officer of the Company or its Subsidiaries, or (Eiv) commercial paper issued other than pursuant to the express terms of the respective Company Benefit Plan or Contract, accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation of or for the benefit of any director or executive officer or otherwise accelerate any rights or benefits, or make any determinations that would result in a material increase in liabilities under any Company Benefit Plan;
(f) the Company shall not, and shall not permit any its Subsidiaries to, make any loans or advances to any of its directors and executive officers (other than in the ordinary course of business consistent with past practice in a principal amount) or make any change in its existing borrowing or lending arrangements for or on behalf of any such Persons;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, incur, assume, guarantee, prepay or otherwise become liable for any indebtedness for borrowed money (directly, contingently or otherwise), except for (A) any indebtedness for borrowed money among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, (B) indebtedness for borrowed money in an amount not to exceed $250,000,000 5,000,000 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 outstanding at any time outstanding time, incurred under this clause and pursuant to existing credit arrangements, (FC) shall not exceed $9,000,000,000; providedletters of credit issued in the ordinary course of business consistent with past practices, further, that and (D) indebtedness for borrowed money as required to consummate the Separation Agreement shall provide that SpinCo shall assume Merger and the obligations of transactions contemplated hereby;
(h) neither the Company or nor any of its Subsidiaries with respect shall settle or compromise any claim, suit action, arbitration or other proceeding, whether administrative, civil or criminal, in law or equity, except for settlements or compromises that consist solely of the payment of monetary damages in an amount not to such Indebtedness exceed $1,000,000 individually or $5,000,000 in the aggregate;
(i) neither the Company nor any of its Subsidiaries shall change any of the material accounting methods, principles or practices used by it unless required by or advisable under a change in GAAP, SEC rule or policy or applicable Law;
(j) other than in the ordinary course of business, neither the Company nor any of its Subsidiaries shall (A) make, change or revoke any material income Tax election, (B) file any material amended income Tax Return, or (C) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes, other than in the case of clauses (B) and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations (C) hereof 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 income Taxes that have been identified in the reserves for income Taxes in the Company’s GAAP financial statements and for settlements or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding compromises permitted under this clause (Gg) shall not exceed the amount permitted in Section 5.01 of this Section;
(k) neither the Company Disclosure Letter; providednor any of its subsidiaries shall acquire, furtherexcept in respect of any mergers, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G)consolidations, (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 business combinations among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, taken as a wholeincluding by merger, than the Indebtedness being replaced consolidation or refinanced; providedacquisition of stock or assets, furtherany corporation, that partnership, limited liability company, other business organization or any division thereof, or any material amount of assets in connection with acquisitions or investments;
(l) neither the Company nor any of its Subsidiaries shall consult with Parent prior to incurring Indebtedness amend in any material respect or waive any of its material rights under this clause (H)any Company Material Contract or enter into any Contract that would constitute a Company Material Contract, (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 except in the ordinary course of business consistent with past practice or as would not reasonably be expected to result 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 practiceMaterial Adverse Effect;
(vm) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall sell, transfer, mortgage, encumber or otherwise dispose of any of its assets, business or properties, except for sales, transfers, mortgages, encumbrances or other dispositions in the ordinary course of business, or Liens, mortgages or encumbrances granted in connection with refinancing, replacement or extension of existing indebtedness consistent with past practice or pursuant to a transaction that, together with any other such transactions, is not material to it and its Subsidiaries, taken as a whole; and
(n) neither the Company nor any of its Subsidiaries shall enter into a Contract to do any of the foregoing. The Company, on the one hand, and Parent and Merger Sub, on the other hand, acknowledge and agree that: (i) nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or any of its Subsidiaries prior to the Effective Time, (ii) prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, control and supervision over its and its Subsidiaries’ operations and (iii) notwithstanding anything to the contrary in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 7.01 or elsewhere in this Agreement to the extent the requirement of such transaction that would, or consent would reasonably be expected to, prevent, materially delay or materially impair the consummation to be a violation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinapplicable Law.
Appears in 3 contracts
Sources: Merger Agreement (Campbell Thomas J), Merger Agreement (Michael Baker Corp), Merger Agreement (Michael Baker Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement, and except (unless i) as required or expressly permitted or contemplated by this Agreement, (ii) as required by applicable Law, (iii) as set forth in Section 5.1(c), (iv) as consented to in writing by Parent shall otherwise approve in writing, (which approval consent shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3v) otherwise expressly disclosed as set forth in Section 5.01(a) 5.1 of the Company Disclosure Letter), the Schedule:
(a) The Company shall, and shall cause each of its Subsidiaries toto (provided, with respect to non-Wholly Owned Subsidiaries, Company shall cause such Subsidiaries to the extent within its reasonable control), use its and their respective reasonable best efforts to (x) conduct the Retained Business its business in all material respects in the ordinary course of business consistent with past practicebusiness, and the Company shall, and shall cause each of its Subsidiaries to, solely (y) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, Entities and key customers, suppliers, distributors, licensors, creditors, lessors, employees (including any labor union, labor organization, works council or other similar organization) and business 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 its and its Subsidiaries’ their present officers, key employees and agents.
workforce (b) Without limiting the generality ofincluding any directors), and (z) maintain in furtherance offorce and enforce internal policies, the foregoing, the Company covenants procedures and agrees controls (as updated or amended from time to itself and its Subsidiaries that, from and after the date of this Agreement and prior time) designed to the First 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 Company Overview Presentation, and except as (1) required by ensure compliance with applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
; provided that (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation no action or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company inaction by the Company or any other wholly owned Subsidiary of the Companyits Subsidiaries with respect to any matters specifically permitted by any portion of Section 5.1(b) shall be deemed a breach of this Section 5.1(a) unless such action or inaction would constitute a breach of such portion of Section 5.1(b);
; and (ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 failure of the Company or any of its SubsidiariesSubsidiaries to take any action prohibited by Section 5.1(b) shall in no circumstances be deemed a breach of this Section 5.1(a);
(b) The Company shall not, and shall cause its Wholly Owned Subsidiaries not to (C) increase the compensationprovided, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to non-Wholly Owned Subsidiaries, the Company shall instruct its directors and officers of such Subsidiary to use their reasonable best efforts to cause such Subsidiaries not to, the extent within their reasonable authority and control):
(1i) employees below the level amend its or their respective Organizational Documents;
(ii) adopt a plan of Executive Vice President and (2) employees at complete or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationpartial liquidation, bonus or pensiondissolution, welfare merger, restructuring, recapitalization, or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees reorganization of the Company or any of its Subsidiaries;
(iviii) incur acquire (including by acquisition of equity (including any Indebtedness debt securities convertible into equity) or issue assets) any warrants business, Person, equity interest in any Person, material properties or material assets, other rights to acquire any Indebtedness, except than (A) acquisitions of inventory or other goods or services in the ordinary course of business consistent with past practice or (B) solely in a principal amount the case of acquisitions of properties or assets (but not to exceed businesses, Persons or equity interests), acquisitions (x) for consideration not in excess of $400,000,000 5,000,000 in any individual transaction or series of related transactions or $15,000,000 in the aggregate at in 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 twelve (12)-month period after the date of this Agreement or (y) expressly contemplated by the Contract evidencing such IndebtednessCompany’s then-current capital budget described in or adopted in accordance with the terms of Section 5.1(b)(x);
(iv) transfer, (B) except with respect sell, lease, license, abandon, cancel, allow to the Bridge Facility, in replacement oflapse, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to otherwise dispose of any material assets of the Company and or any of its Subsidiaries, taken as or incur, permit or suffer to exist the creation of any material Encumbrance (other than a whole, than the Indebtedness being replaced or refinanced, and Permitted Encumbrance) upon any such assets (in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednesscase, excluding Intellectual Property Rights), except (CA) 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 for inventory in the ordinary course of business consistent with past practice, (EB) commercial paper issued for obsolete assets in the ordinary course of business consistent with past practice practice, (C) for properties or assets with a fair market value not in a principal amount not to exceed excess of $250,000,000 5,000,000 individually, or $15,000,000 in the aggregate at in any time outstandingtwelve (12)-month period after the date of this Agreement, or (FD) Indebtednesspursuant to existing contractual rights or obligations in effect prior to the date of this Agreement and made available to Parent or its outside legal counsel prior to the date of this Agreement;
(v) transfer, the proceeds sell, lease, license, abandon, cancel, allow to lapse, or otherwise dispose 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations material Intellectual Property Rights of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, includingor incur, following permit or suffer to exist 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 creation of any material Encumbrance (other than a Permitted Encumbrance) upon, any such refinancing material Intellectual Property Rights, except (A) the lapse or replacement Indebtedness; provided that expiration of Registered Owned IPR at the aggregate principal amount end 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 natural 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 (HB) 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 non-exclusive licenses granted in the ordinary course of business consistent with past practice;
(vvi) issue, sell, dispose of, grant, transfer, encumber or otherwise enter into any Contract with respect to the Retained Businessvoting of, any equity interests of the Company or any of its Subsidiaries, convertible or exchangeable securities in respect of such equity interests, or any options, warrants or other than with respect rights of any kind to acquisitions of businessesacquire any such equity interests or such convertible or exchangeable securities in each case, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with any such transaction or action by a Wholly Owned Subsidiary of the repair Company to the Company or replacement between or among Wholly Owned Subsidiaries of facilitiesthe Company, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) issuances in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms, (C) grants of Company Equity Awards after the date of this Agreement as permitted by Section 5.1(b)(xx) without violation of this Agreement, or issuances in respect of such Company Equity Awards in accordance with their terms, (D) as permitted by Section 5.1(b)(ix), (E) pursuant to, or rights granted under, the Company Exchangeable Notes in effect as of the date of this Agreement or (F) pursuant to the ESPP in accordance with its terms as of the date of this Agreement and in compliance with Section 2.3(d);
(vii) (A) make any loans or advances to, or provide any guarantees on behalf of, any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries or between or among any of its Wholly Owned Subsidiaries) in excess of $2,000,000 individually, or $5,000,000 in the aggregate in any twelve (12)-month period after the date of this Agreement, other than pursuant to existing contractual obligations in effect as of the date of this Agreement and made available to Parent prior to the date of this Agreement, (B) cancel, modify or waive any Indebtedness or other amounts owed to the Company or any of its Subsidiaries having in each case a value in excess of $2,000,000 individually, or $5,000,000 in the aggregate in any twelve (12)-month period after the date of this Agreement, other than in the ordinary course of business consistent with past practice or Indebtedness or other amounts owed between or among the Company and any of its Subsidiaries in the ordinary course of business, or (C) incur any Indebtedness in excess of $10,000,000 individually or $25,000,000 in the aggregate not in excess any twelve (12)-month period after the date of 120% this Agreement, assume or guarantee the Indebtedness of any other Person (other than the Company or any of its Subsidiaries), or make any voluntary prepayment in respect of any Indebtedness in each case of this clause (C), other than (1) intercompany borrowings, (2) capital or finance leases entered into after the date hereof in the ordinary course of business or (3) under surety or performance bonds and letters of credit in existence as of the amounts reflected date hereof and made available to Parent prior to the date of this Agreement or entered into in the Company’s capital expenditure budget for each ordinary course of 2017business and without violation of Section 5.1(b)(xi);
(viii) declare, 2018 and 2019 set forth in Section 5.01(b)(v) aside or pay any dividend or other distribution, with respect to any securities of the Company Disclosure Letteror its Subsidiaries, other than dividends or other distribution paid by any Wholly Owned Subsidiary of the Company to the Company or to any other Wholly Owned Subsidiary of the Company;
(viix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or enter into any agreement to do any of the foregoing with respect to any equity interests of the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon Company or otherwise dispose any Subsidiary of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses the Company or ordinary course security interests securities convertible or exchangeable in connection with the production or financing respect of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensessuch equity interests, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) salesto satisfy applicable Tax withholding or exercise prices upon vesting, leases, licenses settlement or other dispositions exercise of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units Equity Award outstanding on the date of this Agreement in accordance with or granted after the existing terms date of such awards and the Company Stock Plansthis Agreement as permitted by Section 5.1(b)(xx), (B) Investment Preferred Stock (repurchases of shares of capital stock as defined in permitted under any Company Equity Award outstanding on the Bridge Facilitydate of this Agreement or granted after the date of this Agreement as permitted by Section 5.1(b)(xx) or (C) by wholly owned any such transactions solely involving Wholly Owned Subsidiaries to the Company or to 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);
(ixx) with respect to the Retained Business(A) authorize any new capital expenditures, in each case, other than (I) for capital expenditures made first authorized in accordance 2024, as contemplated by the Company’s existing capital budget for calendar year 2024 set forth in Section 5.1(b)(x)(A) of the Company Disclosure Schedule, (II) for capital expenditures first authorized in calendar year 2025, as contemplated by the Company’s capital budget for calendar year 2025 so long as such 2025 capital budget allocates capital expenditures substantially consistently with Section 5.01(b)(vthe Company’s 2024 capital budget, does not exceed the Company’s 2024 capital budget by more than five percent (5%) and is delivered to Parent by no later than February 1, 2025, or (III) any unbudgeted capital expenditures not to exceed $10,000,000 individually, or $25,000,000 in the aggregate in any twelve (12)-month period after the date of this Agreement, or (B) fail to make material capital expenditures expressly contemplated by the Company’s capital budget then in effect, except to the extent that the Company determines, in good faith after consultation with Parent, that delaying such capital expenditure or utilizing the amounts otherwise budgeted for such capital expenditure for other purposes is reasonably necessary under the circumstances existing at any time;
(xi) other than with respect to film and television production and programming or video game productionContracts relating to the activities described in any other clause of this Section 5.1(b), which is subject shall be governed by those respective clauses, enter into any Contract that would have been a Company Material Contract had it been entered into prior to Section 5.01(b)(xthe date of this Agreement (including by amending any Contract in a manner that would make such Contract a Company Material Contract), spend other than any Contract of the type described in Section 3.11(a)(ii) (solely with respect to Contracts with a Company Top Supplier), Section 3.11(a)(iii) (excluding any fixed-price Contracts), Section 3.11(a)(iv) (excluding any Material Company Bid for a fixed-price Contract), Section 3.11(a)(v) (excluding any Contract of a type required to be disclosed under any other clause of Section 3.11(a)), Section 3.11(a)(vi) (solely with respect to personal property) or commit Section 3.11(a)(xi) (solely with respect to spend customer or supplier Contracts containing customary indemnification obligations), in excess of (A) $25,000,000 if the transaction each case, that is not entered in the ordinary course of business consistent with past practice, in each case; provided that such Contract does not provide that the Transactions or any divestiture of any businesses, assets, properties, product lines, programs, projects and equity or other business interests of the Company and its Subsidiaries in connection with the Transactions would constitute a breach or default thereunder or permit the termination, acceleration, or creation of any right or obligation thereunder, or result in the creation of an Encumbrance on any of the rights, properties or assets of the Company or any of its Subsidiaries pursuant thereto or otherwise prevent, materially impair, or materially delay the ability of the Parties to consummate the Transactions;
(xii) assign, terminate, fail to renew, materially amend or waive any material rights under any Company Material Contract (other than non-renewals, non-material amendments or non-material waivers in the ordinary course of business);
(xiii) amend, terminate or allow to lapse any material Company License held by the Company or any of its Subsidiaries in a manner that materially and adversely impacts the ability of the Company and its Subsidiaries to conduct their respective businesses;
(xiv) except in the ordinary course of business consistent with past practice or for which replacement insurance is to be obtained on substantially equivalent terms, voluntarily terminate, cancel or modify any material third-party insurance policies;
(xv) other than any Transaction Litigation, which shall be governed exclusively by Section 5.14, settle or compromise any Proceeding (A) for an amount in excess of $50,000,000 in any event or (B) $50,000,000 individually 15,000,000 individually, or $200,000,000 30,000,000 in the aggregate in any yeartwelve (12)-month period after the date of this Agreement (net of any insurance proceeds or indemnity, contribution or similar payments received by the Company or any Wholly Owned Subsidiary of the Company in respect thereof, or amounts reserved for such matters in the consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2023 by the Company or such Wholly Owned Subsidiary), (B) which involves any criminal liability of the Company or any of its Wholly Owned Subsidiaries, (C) which results in any non-monetary obligation or binding precedential effect that is material to the Company and its Subsidiaries (taken as a whole) or would be binding on Parent’s or its Subsidiaries’ operations after the Closing or (D) that is a stockholder derivative Proceeding or a Proceeding commenced by a Governmental Entity;
(xvi) make any material changes with respect to any financial accounting policies or procedures, in each case case, except as required by GAAP or SEC rules or policies (or any interpretation thereof) or any regulatory accounting requirements (or any interpretation thereof) or any Governmental Entity (including the Financial Accounting Standards Board or any similar organization);
(xvii) write up, write down or write off the book value of any material assets of the Company or any of its Subsidiaries, except to acquire the extent required by GAAP as consistently applied by the Company since the Applicable Date;
(xviii) enter into any businessnew line of business that is not incidental to, whether by mergeror an iteration, consolidationextension, purchase natural evolution, expansion or advancement of, the lines of property business of the Company or assets, licenses or otherwise (valuing any non-cash consideration at of its fair market value Subsidiaries as of the date of this Agreement;
(xix) (A) make (other than in the agreement for such acquisitionordinary course of business); provided that neither the Company nor , change or revoke any of its Retained Subsidiaries shall material Tax election, (B) change any material Tax accounting period or method, (C) file any material amended Tax Return, (D) enter into any such transaction closing agreement with respect to material Taxes, (E) settle any material Tax claim, audit, assessment or dispute, (F) enter into any material Tax indemnification, sharing, allocation reimbursement or similar agreement, arrangement or understanding, (G) initiate any voluntary Tax disclosure or Tax amnesty or similar filings with any Taxing Authority with respect to U.S. state or local Taxes and other than in connection with the CAP Program, (H) fail to timely file any material Tax Returns (taking into account any extension of time within which to file) or pay any Tax that wouldbecomes due and payable (other than Taxes that are being contested in good faith in appropriate proceedings and for which appropriate reserves have been established to the extent required by GAAP), or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions(I) surrender any right to claim a material Tax refund;
(xxx) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date hereof, any Company Labor Agreement (as may be amended pursuant to this Agreement), or as otherwise required by applicable Law, (A) increase the compensation or consulting fees, bonus, pension, welfare, fringe or other than capital expenditures made benefits, severance or termination pay of any Company Employee, except for (1) increases in accordance annual base salary or wage rate in the ordinary course of business consistent with Section 5.01(b)(vpast practice that do not exceed five percent (5%) and other than purchases and licenses of film and television and production programming (includinin the aggregate or
Appears in 3 contracts
Sources: Merger Agreement (Boeing Co), Merger Agreement (Spirit AeroSystems Holdings, Inc.), Merger Agreement (Boeing Co)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and except as (1) otherwise expressly contemplated by this Agreement, and except as required by applicable Law, (2Laws) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly contemplated by this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed for transactions set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate articles of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 by-laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or 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 otherwise enter into any agreements or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongarrangements imposing material changes or restrictions on its assets, operations or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) acquire assets outside of the ordinary course of business consistent with past practice from any other Person, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any Shares or any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned 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 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 any loans, advances or capital contributions to or investments in any Person, other than non-material advances to vendors and employees in the ordinary course of business consistent with past practice;
(vii) 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 capital stock except as expressly required for (x) dividends paid by any direct or indirect wholly owned Subsidiary of the Company Plan 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 fourth quarter of 2006 consistent with past practice, which shall not exceed $200,000 in the aggregate as set forth in effect on Section 5.1(f) of the date hereof: Company Disclosure Letter;
(Aviii) establishreclassify, adoptsplit, amend combine, subdivide or terminate redeem, purchase or otherwise acquire, directly or indirectly, any material Company Plan of its capital stock or amend the terms securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) incur any outstanding equity-based awards indebtedness for borrowed money (other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowings under the Company’s existing working capital debt facilities in the ordinary course of business consistent with past practice that does not materially increase to fund working capital of the cost Company) or guarantee such indebtedness of such Company Plan another Person, or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant issue or provide sell any transaction debt securities or retention bonuses to any director, officer, employee warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries;
(x) make or authorize any capital expenditures in excess of $5 million in the aggregate;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(xiii) 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;
(xiv) make any material Tax election, take any material position on any material Tax Return 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 resolve any material Tax controversy;
(xv) other than pursuant to Contracts in effect prior to the date of this Agreement, transfer, sell, lease, license, mortgage, 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, except (x) in the ordinary course of business consistent with past practice, (Cy) for sales of obsolete assets or (z) for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $5 million in the aggregate;
(xvi) except as otherwise required by applicable Law, (i) increase the compensation, bonus or pension, pension or welfare or other benefits of (other than those increases in the ordinary course consistent with past practice (A) to employees below the Senior Vice President level or (B) resulting from the Company’s improved performance, based on existing 2005 incentive formulas), or make any new equity awards to, any director, officer or employee of the Company or any of its Subsidiaries, except (ii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any Benefit Plan or outstanding equity-based awards, or (iii) 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 required by any such Benefit Plan;
(xvii) settle, or consent to any settlement of, any actions, suits, claims or proceedings against the Company or any of its Subsidiaries or any obligation or liability of the Company (i) alleging personal injury or property damage arising from exposure to asbestos or asbestos-containing materials (other than disputes paid under the Company’s insurance not exceeding $50,000 per claimant), or (ii) alleging any other injury or damage (other than disputes with customers or suppliers in the ordinary course of business consistent with past practice 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 (1A) employees below the 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 severance or termination payments or benefits payable any insurance coverage relating to any directoractions, officer, employee suits or other service provider of claims against the Company or any of its SubsidiariesSubsidiaries alleging personal injury or property damage arising from exposure to asbestos or asbestos-containing materials, or (EB) any agreements, understandings or arrangements relating to any such coverage;
(xix) take any action or omit to accelerate the vesting or payment of compensation or benefits under take any Company Plan (including action that is reasonably likely to result in any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights conditions to acquire any Indebtednessthe Merger set forth in Article VII not being satisfied, 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 actions 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 purposesomissions expressly permitted by Section 6.2; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) foregoing shall not exceed $9,000,000,000; providedexpand, furtherdiminish or modify in any way any of the Company’s express obligations hereunder;
(xx) enter into, that the Separation Agreement shall provide that SpinCo shall assume the obligations terminate, amend or modify any Contract or transaction with any officer, director or Affiliate of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following or any Person beneficially owning five percent or more of the Distribution, outstanding Shares or of 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 outstanding shares 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 Subsidiary 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 practiceCompany;
(vxxi) with respect to the Retained Business, enter into any purchase order (other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) purchase orders entered into in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% an amount less than $10 million); or
(xxii) agree, authorize or commit to do any of the amounts reflected foregoing.
(b) Parent will not and will not permit any of its Subsidiaries to take any action or omit to take any action that is reasonably likely to result in any of the Company’s capital expenditure budget for each of 2017, 2018 and 2019 conditions to the Merger set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business7.2 or Section 7.3 not being satisfied, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon except actions or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed omissions expressly permitted by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 acquisition6.12(c); provided that neither the Company nor foregoing shall not expand, diminish or modify in any way any of its Retained Subsidiaries shall enter into any such transaction that would, Parent’s or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinMerger Sub’s express 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) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Wax Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Wax Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Holdco, Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinincluding 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. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of otherwise expressly required or permitted by this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2b) expressly required by the Transaction Documents (including as Parent may approve in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) writing or (3c) otherwise expressly disclosed as set forth in Section 5.01(a) 6.01 of the Company Disclosure Letter)Schedule, during the period from the date of this Agreement until the earlier of the Effective Time or termination of this Agreement in accordance with Article 8, Company shall, and shall cause each of its Subsidiaries to, use (i) conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business consistent with past practicepractice in all material respects, and the Company shall, and shall cause each of (ii) use its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to maintain and preserve the Retained Business’ intact, in all material respects, its business organization intact and maintain the Retained Business’ existing relations advantageous business relationships, and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, licensors, creditors, lessors, officers and employees and business 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.
, (iii) maintain in full force and effect insurance comparable in amount and scope of coverage to that now maintained by it, (iv) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of either Company 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 (v) take any action or omit to take any action that is intended to or would reasonably be expected to result in (a) a Company Material Adverse Effect or (b) any of the conditions to the Merger set forth in Article 7 not being satisfied or being materially delayed. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First earlier of the Effective Time or termination of this Agreement in accordance with Article 8, except (unless A) as otherwise expressly required or permitted by this Agreement or as required by Law, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.01 of the Company Disclosure Letter)Schedule, the Company shall not and shall not permit any of its Subsidiaries to:
(ia) except with respect Other than pursuant to SpinCo Company Options and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its Stock Awards outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in date of this Agreement or Interim Period Company RSU Awards granted pursuant to Section 5.01(b)(i6.01(g)(iv) of the Company Disclosure Letter)Schedule, or pursuant to dispositions or deemed dispositions of shares of Company Common Stock for Tax withholding or payment of the exercise price on the vesting, settlement or exercise of any Company Option or Company Stock Award, (Di) enter into issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any agreement with respect to the voting additional shares of its capital stock, or (E) purchasesecurities convertible or exchangeable into, repurchaseor exercisable for, redeem or otherwise acquire 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 any shares of such capital stock, (ii) permit any additional shares of its capital stock, or securities convertible or exchangeable into 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 any shares of such capital stock, to become be subject to new grant, or (iii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its stock or other securities.
(b) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its capital stock (other than (1A) pursuant authorized dividends from its wholly-owned Subsidiaries to the forfeiture of, it or withholding another of Taxes its wholly-owned Subsidiaries and (B) regular quarterly dividends on shares of Company Common Stock not to exceed $0.13 per share).
(c) Except 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than to 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan made in the ordinary course of business consistent with past practice (including normal renewals of contracts without material adverse changes of terms), amend or modify the material terms of, waive, release or assign any material rights under, or terminate or enter into (i) any Material Contract, Lease, Regulatory Agreement, CRA Agreement, or any Contract that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost would be a Material Contract if it were in existence on the date hereof, ; (Bii) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider material restriction on the ability of the Company or its Subsidiaries to conduct its business as it is presently being conducted; or (iii) any Contract governing the terms of its Subsidiaries, (C) increase the compensation, bonus Company Common Stock or pension, welfare or other benefits of any director, officer or employee of the Company rights associated therewith or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company outstanding capital stock or any outstanding instrument of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 programsindebtedness, in each case issuedwhich is not terminable at will or within sixty (60) calendar days or less notice without payment of any amount other than for products delivered or services performed through the date of termination.
(d) Sell, made transfer, mortgage, lease, guarantee, encumber, license, let lapse, cancel, abandon or entered into in the ordinary course otherwise create any Lien on or otherwise dispose 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or discontinue any of its Subsidiaries with respect assets, deposits, business or properties (other than sales pursuant to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereofSection 6.01(p), (Gwhich Section 6.01(p) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any will exclusively govern 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 (Gsales), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings except for sales, transfers, mortgages, leases, guarantees, encumbrances, licenses, lapse, cancellation, abandonments or replacements thereof on then prevailing market terms other dispositions 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) discontinuances in the ordinary course of business consistent with past practice and in a transaction that, together with other such transactions, does not exceed $500,000.
(e) Acquire (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the aggregate not in excess ordinary course of 120% business) all or any portion of the amounts reflected assets, business, deposits or properties of any other entity, except in the Company’s capital expenditure budget ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and would not reasonably be expected to present a material risk that the Closing Date will be materially delayed or that any Requisite Regulatory Approvals will not be obtained.
(f) Amend the Company Articles or the Company Bylaws, or similar governing documents of any of its Subsidiaries.
(g) Except as and solely 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 6.13):
(i) increase in any manner the compensation, bonus or pension, welfare, severance or other benefits of any of the current or former directors, officers, employees or other service providers of Company or its Subsidiaries, except for each ordinary course merit-based increases in the base salary (and corresponding increases in any base salary factor in incentive compensation) of 2017, 2018 and 2019 employees (other than directors) (not exceeding 105% in the aggregate) consistent with past practice or as set forth in Section 5.01(b)(v6.01(g)(ii) below.
(ii) accrue, 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) any bonuses and other incentive compensation that are payable by Company on an annual basis in the ordinary course of business consistent in all material respects with past practice for the year ending December 31, 2025; provided, however, that such bonuses shall not exceed the aggregate amount accrued as of the Closing Date on the Company financial statements, or (B) any incentive compensation that is payable by the Company on less than annual basis in the ordinary course of business consistent in all material respects with an Employee Benefit Plan and past practice.
(iii) 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 adoption of any Employee Benefit Plan or plan that would be an Employee Benefit Plan if in effect as of the date hereof, other than de minimis amendments in the ordinary course of business consistent with past practice or as required pursuant to the terms of such Employee Benefit Plan.
(iv) grant (or commit to grant) any new equity award, except as set forth on Section 6.01(g)(iv) of the Company Disclosure Letter;Schedule with respect to any Interim Period Company RSU Award.
(v) grant, pay or increase (or commit to grant, pay or increase) any severance, retention, retirement or termination pay, other than pursuant to (i) the Employee Benefit Plans in effect as of the date hereof as listed on Section 4.11(a) of the Company Disclosure Schedule; and (ii) such retention payments consistent with the terms and conditions set forth on Section 6.01(g)(v)(i) of the Company Disclosure Schedule.
(vi) other than as expressly stated in Section 3.03 or contemplated under Section 6.13, accelerate the payment or vesting of, or lapsing of restrictions with respect to, any stock-based compensation (including the Company Options and Company Stock Awards), 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 of the Company 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 Company or its Subsidiaries.
(xi) make any Company contributions to the Retained BusinessCompany 401(k) Plan outside of the ordinary course of business and consistent with past practice.
(xii) hire any officer, transferemployee or other service provider except in the ordinary course of business consistent with past practices, leaseincluding as a result of vacancies arising on or after the date hereof.
(h) Knowingly take, licenseor omit to take, sellany action that would prevent or impede, assignor could reasonably be expected to prevent or impede, let lapsethe Merger or the Bank Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.
(i) (i) other than intercompany indebtedness among the Company and any wholly-owned Subsidiaries, abandonincur or guarantee any indebtedness for borrowed money, cancelother than in amounts and at maturities in the ordinary course of business consistent with past practice, mortgageand provided further that the maturity period for any such indebtedness shall not exceed a period of ninety (90) days from the date of incurrence of such indebtedness or (ii) assume, pledgeguarantee, place a Lien upon endorse or otherwise dispose as an accommodation become responsible for the obligations of any material Intellectual Property; provided that this clause other Person (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with other than the production or financing endorsement of film checks, commercial paper, bankers acceptances and television programming or video game production, letting lapse, abandonmentbank drafts, and cancellations, guarantees by the Company of indebtedness of any wholly-owned Subsidiary of the Company and Liens that are ordinary course nonguarantees by any wholly-exclusive licensesowned Subsidiary of the Company of indebtedness of the Company or any other wholly-owned Subsidiary of the Company, in each case, 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 of business consistent with past practice and which does not exceed a period of ninety (90) days from the date of such assumption, guarantee, endorsement or $75,000,000 individually otherwise).
(j) Enter into any new line of business or make any material change in any event (basic policies and practices with 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 than transactions among the Company and material aspect of Company’s or its wholly owned Retained Subsidiaries)’ business or operations, (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used except as required by Law or held for use exclusively in the SpinCo Business and (E) Affiliation Agreementsrequested by any Governmental Authority;
(viik) Other than in accordance with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon investment policies of Company or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including in effect on the date hereof or in securities transactions as provided in (ii) below, (i) make any Intellectual Propertyinvestment either by contributions to capital, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses property transfers or other dispositions purchase of any properties property or assets of any Person, or (excluding capital stock ii) other than purchases of direct obligations of the Retained Subsidiaries) 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 fair market value remaining maturity at the time of purchase of one year or less, purchase or acquire securities of any type other than securities purchased in the ordinary course of business consistent with past practice and the Company’s interest rate risk and investment policies following reasonable prior consultation with and review by Parent; provided, however, that in the case of Investment Securities, Company may purchase Investment Securities if, within two (2) Business Days after Company 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 Company Disclosure Schedule, enter into any settlement, compromise or similar agreement with respect to, any action, suit, claim, proceeding, order or investigation to which Company or any of its Subsidiaries is or become a party after the date of this Agreement, other than any settlement, compromise, agreement or action, suit, claim, proceeding, order or investigation that is settled in an amount and for consideration not in excess of $50,000,000 250,000 individually if or $500,000 in the transaction is aggregate and that would not (i) impose any material restriction on the business of the Surviving Corporation or the Surviving Bank or (ii) create adverse precedent for claims that are reasonably likely to be material to the Company or its Subsidiaries taken as a whole.
(m) Other than as required by applicable Law or by a Governmental Authority or as determined to be necessary or advisable by Company 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, other than in the ordinary course of business, waive any material fees with respect thereto.
(n) Except as required by applicable Law or $100,000,000 individually by a Governmental Authority, (i) implement or adopt any material change in any event its interest rate and other risk management policies, procedures or practices or (Bii) transactions among the Company fail to comply in all material respects, with Company’s or its applicable Subsidiary’s applicable policies, procedures or practices with respect to managing its exposure to interest rate and the Retained Subsidiariesother risk.
(o) Grant or commit to grant any new extension of credit or any renewal or modification of an existing extension of credit to any obligor (whether a new or existing relationship) (if such extension of credit would be provided either on an unsecured basis or on a secured basis and equal or exceed $5,000,000; in each case, consent shall be deemed granted if within one (1) Business Days of written notice delivered to Citizens’ Chief Credit Officer or his designee, notice of objection is not received by Company;
(viiip) except with respect Sell any real estate owned, charge-off any assets, make any compromises on debt, release any collateral on loans or commit to SpinCo and do any of the SpinCo Subsidiariesforegoing, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, if such sale, grantcharge-off, transfer compromise or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 release would exceed $500,000 in the Bridge Facility) or aggregate (C) by wholly owned Subsidiaries to the Company or to 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 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 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)(viiireceived by Company);.
(ixq) with respect to the Retained Business, 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 Renew or commit to spend in excess renew any extension of (A) credit that would equal or exceed: $25,000,000 1,000,000 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinrated either Su
Appears in 3 contracts
Sources: Agreement and Plan of Reorganization and Merger (Heritage Commerce Corp), Agreement and Plan of Reorganization and Merger (Heritage Commerce Corp), Merger Agreement (CVB Financial Corp)
Interim Operations. (a) The Pursuant to the Merger Agreement, the Company covenants and agrees as to itself and its Subsidiaries has agreed that, from and after except as expressly contemplated by the execution of this Merger Agreement and or agreed to in writing by Parent, prior to the First Effective Time (unless time the directors of the Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) constitute a majority of the Company Disclosure Letter)Board, the Company shall, and shall cause each of its Subsidiaries 22 to, (a) conduct its operations in all material respects according to their ordinary and usual course of business in substantially the same manner as conducted prior to the date of the Merger Agreement; (b) use its reasonable best efforts to conduct preserve intact its business organization in all material respects, keep available the Retained Business services of its executive officers and key employees as a group, subject to changes in the ordinary course, and maintain satisfactory relationships with suppliers, distributors, customers and others having business relationships with them; (c) confer at such times as Parent may reasonably request with one or more representatives of Parent to report material operational matters and the general status of ongoing operations (in each case to the extent Parent reasonably requires such information) and consult with Parent regarding material operational decisions; (d) promptly notify Parent of any emergency or other change in the normal course of its businesses or in the operation of its properties and of any complaints, investigations or hearings (or communications indicating that the same may be contemplated) of any governmental body or authority; (e) not authorize or pay any dividends on or make any distribution with respect to its outstanding shares of stock; (f) not, except as otherwise contemplated by the Merger Agreement or as may be required by applicable law, enter into or amend any employment, severance or similar agreements or arrangements with any of their directors or executive officers; (g) not, subject to the provisions described below under the heading "No Solicitation," authorize, announce an intention to authorize, or enter into an agreement with respect to, any merger, consolidation or business combination other than the Merger, any acquisition of a material amount of assets or securities, any disposition of a material amount of assets or securities or any release or relinquishment of any material contract rights, in each case, not in the ordinary course of business; (h) not propose or adopt any amendments to its corporate charter or by-laws, except pursuant to the Merger as provided in the Merger Agreement; (i) not issue any shares of capital stock, except upon exercise of options previously issued pursuant to existing employee plans, programs or arrangements and non-employee director plans; (j) not grant, confer or award any options, warrants, conversion rights or other rights not existing on the date of the Merger Agreement, to acquire any shares of its capital stock; (k) not purchase, redeem, or offer to purchase or redeem any shares of its stock or any securities convertible into or exchangeable for shares of stock, except for the deemed repurchase of options in accordance with the terms of the Merger Agreement, or purchases, redemptions and offers to purchase in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation employee incentive and the Distribution) benefit plans, programs or (3) otherwise expressly disclosed arrangements in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 existence on the date of this the Merger Agreement; (l) not, except as contemplated by the Merger Agreement (or as modified after may be required by applicable law, amend in any material respect the terms of its employee benefit plans, programs or arrangements or any severance or similar agreements or arrangements in existence on the date of this Agreement in accordance with the terms of this Merger Agreement) , enter into or (2) purchasesamend any employment or consulting agreement, repurchasesadopt or enter into any new employee benefit plans, redemptions programs or other acquisitions of securities arrangements or any severance or similar agreements or arrangements or increase the base salary of any wholly owned Subsidiary person who is a party to a Change of the Company by the Company Control Employment Agreement or make any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with payments under any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses benefit plan to any director, officeremployee, employee independent contractor or other service provider of the Company or any of its Subsidiaries, consultant (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business and in amounts and in a manner consistent with past practice with respect or as otherwise required by law or the provisions of such benefit plan); (m) not (i) enter into any material loan agreement or incur any indebtedness in excess of an aggregate of $100,000 or amend any Company credit facility to (1) employees below increase the 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 changeamount that may be borrowed thereunder, (Dii) increase make or enter into any agreement or contract for capital expenditures in excess of $50,000, (iii) enter into any lease for real property in excess of $50,000 or any lease for personal property in excess of $20,000, or (iv) enter into any agreement or contract outside of the severance or termination payments or benefits payable to any director, officer, employee or other service provider ordinary course of business of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting Company's subsidiaries that involves performance of services or payment delivery of compensation goods or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan materials by or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of the Company's subsidiaries of an amount or value in excess of $50,000; (n) not make or change any material Tax election, file any amendment to any federal income Tax Return unless required by law, enter into any closing agreement, or settle or compromise any material Tax liability; (o) not adjust, split, combine or reclassify its Subsidiaries;
capital stock; (ivp) incur not enter into any Indebtedness agreement, understanding 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 arrangement with respect to the Bridge Facilitysale or voting of its capital stock; (q) not create any new subsidiaries; (r) except as required by the Merger Agreement, in replacement of, not take any action which could reasonably be expected to adversely affect or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to delay 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 ability of any of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) parties 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 obtain 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 approval of any such refinancing governmental or replacement Indebtednessregulatory body required to consummate the transactions contemplated thereby; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (Gs) 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 directly 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 respect to the Retained Businessindirectly sell, transfer, lease, license, sell, assign, let lapse, abandon, cancelpledge, mortgage, pledge, place a Lien upon encumber or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses property or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 assets other than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event of business; (other than transactions among the Company and its wholly owned Retained Subsidiaries), (Dt) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that wouldfinancial derivative contracts; (u) not change in any material respect its accounting policies, methods or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
procedures except as required by GAAP; (xv) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinexcept as may 23
Appears in 3 contracts
Sources: Offer to Purchase (Falcon Products Inc /De/), Offer to Purchase (Falcon Products Inc /De/), Offer to Purchase (Shelby Williams Industries Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required otherwise expressly authorized by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution this Agreement or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a) 6.1 of the Company Disclosure Letter)) and except as required by applicable Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present current employees and agents.
(b) Without limiting the generality of, of Section 6.1(a) and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of hereof until the Acceptance Time and, if the 90% Requirement is satisfied at any time from and after the Acceptance Time, from and after such time that the 90% Requirement is satisfied until the Effective Time, except (A) as otherwise expressly required by this Agreement and prior to the First Effective Time Agreement, (unless B) as Parent shall otherwise may approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (by-laws or comparable other applicable governing documents) (other than amendments to the governing documents instruments of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate any Subsidiary of the Company with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions or otherwise enter into any agreements or arrangements imposing material changes or restrictions on the Company’s or any of the type contemplated by Section 5.01(b)(vii) its Subsidiaries’ assets, operations 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) except as expressly required by issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms shares of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 capital stock of the Company or any of 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, except in accordance with the terms of the grant of any outstanding and exercisable Company Option that was issued prior to the date of this Agreement;
(iv) except for the Company’s declaration and payment of regular quarterly cash dividends consistent with past practice and in any event not in excess of $0.52 per share with usual record and payment dates for such dividends in accordance with past dividend practice of the Company, 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;
(v) 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;
(vi) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(vii) settle any material litigation or other material proceedings before a Governmental Entity;
(viii) (A) make or rescind any material election relating to Taxes; (B) file any amended income Tax Return or material claim for refund; (C) increase make any material change in any method of accounting, keeping of books of account or accounting practices or in any method of Tax accounting of the compensationCompany or any of its Subsidiary unless required by GAAP or applicable Law; (D) enter into or agree to any private letter ruling, bonus closing agreement or pensionsimilar ruling or agreement with the IRS or any other taxing authority or settle any audit or proceeding with respect to any material amount of Taxes owed; or (E) file its federal income Tax Return for any fiscal year ending on or after December 31, welfare 2007 without providing Parent reasonable opportunity to review and comment on such Tax Return;
(ix) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement, or other as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits of to any director, officer or employee of the Company or any of its Subsidiaries, except in (ii) increase the ordinary course of business consistent with past practice with respect to (1) employees below the 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 welfare, severance or other benefits prior to such changeof, (D) increase the severance pay any bonus to, or termination payments or benefits payable make any new equity awards to any director, officer, officer or employee or other service provider of the Company or any of its Subsidiaries, (Eiii) establish, adopt, amend or terminate any Compensation Agreements and Benefit Plans or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Compensation Agreements and Benefit Plans, to the extent not already provided in any equity-based awards)such Compensation Agreements and Benefit Plans, (Fv) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan Compensation Agreements and Benefit Plans or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP; or (Gvi) forgive forgive, grant a waiver or extension under, or amend in any loans manner adverse to the Company or one of its Subsidiaries, any extension of credit to directors or executive officers of the Company or any of its Subsidiaries;
(x) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Offer set forth in Exhibit 1 or the conditions to the Merger set forth in Article VII not being satisfied; or
(xi) agree, authorize or commit to do any of the foregoing.
(c) Without limiting the generality of Section 6.1(a) and in furtherance thereof, during any period from and after the Acceptance Time and prior to the Effective Time during which the 90% Requirement is not satisfied, except (A) as otherwise expressly required by this Agreement, (B) as Parent may approve in writing, or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(i) adopt any change in the certificate of incorporation or by-laws or other applicable governing instruments of any Subsidiary of the Company;
(ii) merge or consolidate any Subsidiary of the Company with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on the Company’s or any of its Subsidiaries’ assets, operations or businesses;
(iii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned 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 in accordance with the terms of the grant of any outstanding and exercisable Company Option that was issued prior to the date of this Agreement;
(iv) except for the Company’s declaration and payment of regular quarterly cash dividends consistent with past practice and in any event not in excess of $0.52 per share with usual record and payment dates for such dividends in accordance with past dividend practice of the Company, 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;
(v) 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;
(vi) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(vii) settle any material litigation or other material proceedings, in each case relating to any of the Transactions before a Governmental Entity;
(viii) 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, (i) grant or provide any severance or termination payments or benefits to any director, 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, (iii) establish, adopt, amend or terminate any Compensation Agreements and Benefit Plans or amend the terms of any outstanding equity-based awards, (iv) 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 Compensation Agreements and Benefit Plans, to the extent not already provided in any such Compensation Agreements and Benefit Plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Compensation Agreements and Benefit Plans 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 (vi) forgive, grant a waiver of extension under, or amend in any manner adverse to the Company or one of its Subsidiaries, any extension of credit to directors or executive officers of the Company or any of its Subsidiaries;
(ix) 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; or
(x) agree, authorize or commit to do any of the foregoing.
(d) Prior to making any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries;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 to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(ive) 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) Parent shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company knowingly take or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have take 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which action that is not covered by insurance is less than $100,000,000) reasonably likely to prevent or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Bank of Tokyo - Mitsubishi Ufj, LTD), Merger Agreement (Unionbancal Corp), Merger Agreement (Mitsubishi Ufj Financial Group Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after Without limiting the execution Company's obligations under Section 6.5 of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingAgreement, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by set forth in the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) corresponding section of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoingLetter or otherwise as expressly contemplated hereby, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time (unless Parent Cingular shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed), the business of it and which determination its Subsidiaries shall take into account be conducted in the ordinary course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present employees and agents of the Company Overview Presentationand its Subsidiaries. Without limiting the Company's obligations under Section 6.5 of this Agreement and without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Effective Time, the Company will not and will not permit its Subsidiaries to (unless Cingular shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed):
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except as for any such transactions among wholly-owned Subsidiaries of the Company that are not obligors or guarantors of third party indebtedness;
(1iii) required by applicable Lawacquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $50,000,000, (2) expressly required by other than acquisitions pursuant to Contracts to the Transaction Documents (including extent in connection with effect immediately prior to the Separation execution of this Agreement and the Distribution) or (3) otherwise expressly disclosed set forth in Section 5.01(b6.1(a)(iii) of the Company Disclosure Letter or as otherwise set forth in Section 6.1(a)(iii) of the Company Disclosure Letter;
(iv) other than pursuant to Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 6.1(a)(iv) of the Company Disclosure Letter, and other than the issuance of shares of Common Stock upon the exercise of outstanding Company Options and pursuant to other equity-based awards granted under the Stock Plans and shares under the Company's 401(k) plan and the deferred compensation plans, in each case, in accordance with their terms, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable 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) other than in connection with existing receivables facilities and securitizations and renewals thereof in the ordinary course of business, create or incur any Lien on assets of the Company shall not and shall not permit or any of its Subsidiaries to:that is material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(ivi) except with respect other than acquisitions pursuant to SpinCo Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 6.1(a)(vi) of the SpinCo Subsidiaries Company Disclosure Letter, make any loan, advance or capital contribution to or investment in any Person (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any a wholly-owned Subsidiary of the Company that would not prevent, delay or impair Company) in excess of $25,000,000 in the Initial Merger or the other Transactions), aggregate;
(B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or other distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another the Company or to any other direct or indirect wholly wholly-owned Subsidiary of the Company and periodic dividends and other periodic distributions by non-wholly-owned Subsidiaries consistent with past practices) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(viii) other than the redemption of the Series C Preferred Stock or the Series E Preferred Stock in accordance with the Company's certificate of incorporation, reclassify, combine, split, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares share of its capital stock stock;
(ix) incur any indebtedness for borrowed money 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 incurred in the ordinary course of business not to exceed $50,000,000 in the aggregate, (B) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on customary commercial terms, (C) guarantees incurred in compliance with this Section 6.1(a) by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (D) interest rate swaps on customary commercial terms, consistent with past practices and not to exceed $750,000,000 of notional debt in the aggregate;
(x) except as set forth in Section 6.1(a)(x) of the Company Disclosure Letter, make or authorize any capital expenditure;
(xi) enter into any Material Contract that would have been a Material Contact as described in clauses (J), (L) or (M) of Section 5.1(j)(i) had it been entered into prior to the execution of this Agreement, and other than in the ordinary course of business, enter into any other Material Contract that would have been a Material Contract as described in Section 5.1(j)(i) (other than as described in clauses (1J), (L) pursuant or (M)) had it been entered into prior to the forfeiture of, or withholding execution of Taxes this Agreement;
(xii) make any changes with respect toto accounting policies or procedures, Company Restricted Stock Unitsexcept as required by changes in GAAP or by Law or except as the Company, Company Deferred Stock Units based on the advice of its independent auditors and after consultation with Cingular, determines in good faith is advisable to conform to best accounting practices;
(xiii) settle any litigation or Company Performance Stock Units, other proceedings before or threatened to be brought before a Governmental Entity for an amount in each case in accordance with past practice and with excess of $10,000,000 or which would be reasonably likely to have any adverse impact on the terms operations of the Company Stock Plans as or any of its Subsidiaries or on any current or future litigation or other proceeding of the Company or any of its Subsidiaries; provided, that any litigation or other proceeding with respect to an item relating to Taxes may be settled for an amount that is not in effect excess of the amount reserved or accrued for such item on the most recent balance sheet contained in the Company Reports filed prior to the date of this Agreement (which reserve and accrual information shall be furnished by the Company to Cingular upon Cingular's request);
(xiv) 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;
(xv) except as modified 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 accordance preparing or filing similar Tax Returns in prior periods. Notwithstanding the foregoing, the Company shall consult with Cingular and its Representatives prior to claiming any depreciation allowance under Section 168(k) of the terms of this AgreementCode;
(xvi) sell, lease, license, or (2) purchases, repurchases, redemptions or other acquisitions of securities otherwise dispose of any wholly owned Subsidiary assets of the Company by the Company or any other wholly owned Subsidiary its Subsidiaries except for ordinary course sales of mobile telephone equipment to customers of the Company, services provided in the ordinary course of business or obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $25,000,000 in the aggregate, other than pursuant to Contracts in effect prior to the execution of this Agreement and set forth in Section 6.1(a)(iii) of the Company Disclosure Letter or as otherwise set forth in Section 6.1(a)(iii) of the Company Disclosure Letter and other than any dispositions of assets to the extent used as consideration for acquisitions that are permitted pursuant to Section 6.1(a)(iii);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iiixvii) except as expressly required pursuant to existing written, binding agreements in effect prior to the execution of this Agreement, as otherwise required by any Company Plan as in effect on the date hereof: (A) establishLaw, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (Bwhich with respect to annual bonus plans and performance share awards is set forth in Section 6.1(a)(xvii) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its SubsidiariesDisclosure Letter), (Ci) increase the compensation, bonus enter into any commitment to provide any severance or pension, welfare termination benefits to (or other benefits of amend any existing arrangement with) any director, officer or employee of the Company or any of its Subsidiaries, except in (ii) increase the ordinary course benefits payable under any existing severance or termination benefit policy or employment agreement (other than as required to be increased pursuant to the existing terms of business consistent any such policy or agreement), (iii) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement) with past practice with respect to any director or officer of the Company or any of its Subsidiaries other than for new hires, (1iv) employees below establish, adopt, amend, terminate or make any new awards under any bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any director, officer or employee of the level Company or any of Executive Vice President and its Subsidiaries (2v) employees at or above increase 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 severance or termination payments or benefits payable to any director, officer, employee employee, consultant or other service provider independent contractor of the Company or any of its Subsidiaries, or (Evi) amend the terms of any outstanding Company Option or other equity-based award; provided, that the Company shall in no event take any action to accelerate the vesting or payment of compensation or benefits under amend its severance plans, except as required by applicable Law;
(xviii) fail to initiate appropriate steps to renew any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of material FCC Licenses held by the Company or any of its SubsidiariesSubsidiaries that are scheduled to terminate prior to or within 60 days after the Effective Time;
(ivxix) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) engage in the ordinary course conduct of any business requiring the receipt or transfer of a License issued by a Governmental Entity other than engaging in the mobile wireless voice and data business in the U.S. and activities incident thereto, other than any other current lines 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations geographic locations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to as expressly permitted by Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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)(v6.1(a)(iii) of the Company Disclosure Letter;
(vixx) except as otherwise permitted hereby with respect to the Retained Businessemployees, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of enter into any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses Contract with or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually engage in any event (material transaction with DoCoMo or any other than transactions among Affiliate of the 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 SpinCo Business and (E) Affiliation AgreementsCompany;
(viixxi) with respect to the Retained Businessadopt a technology platform other than existing technologies, 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 including any Intellectual Propertyanalog, which is governed by Section 5.01(b)(vi)TDMA, EDGE, GSM and GPRS), except for HSDPA or UMTS and W-CDMA (Aincluding in each case the standards set forth on Section 6.1(a)(xxi) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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)(viiiDisclosure Letter);
(ixxxii) with respect to amend, modify or waive any provision under the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(vRights Agreement; and
(xxiii) 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 agree or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 foregoing.
(b) Each of SBC and BellSouth will cause Cingular and Cingular Wireless to take all action necessary to consummate the agreement for such acquisition); provided that neither transactions contemplated by this Agreement subject to the Company terms and conditions hereof. Neither SBC nor BellSouth will take or permit any of its Retained Subsidiaries shall enter into to take any action that at the time of taking such transaction that would, or would action is reasonably be expected to, prevent, materially delay or materially impair likely to prevent the consummation of the Transactions;
Merger. Except as set forth in the corresponding section of the disclosure letter delivered by SBC to the Company at the time of entering into this Agreement (xthe "SBC Disclosure Letter"), neither SBC nor BellSouth shall, and each shall cause its Subsidiaries not to, prior to the Termination Date, (i) enter into any definitive agreement for the acquisition of any business or Person which provides commercial mobile wireless voice and data services offered to the public utilizing frequencies and spectrum licensed by the FCC, other than capital expenditures made the provision of such services in accordance de minimis amounts or (ii) take any action which would, at the time the action is taken, reasonably be expected to materially interfere with Section 5.01(b)(v) its ability to make available to Cingular or the Paying Agent as of the Effective Time funds sufficient for its Specified Interest of the Merger Consideration. Each of SBC and other than purchases BellSouth will, subject to the terms and licenses conditions of film and television and production programming (includinthis Agreement, make available to Cingular or the Paying Agent its Specified Interest of the Merger Consideration.
Appears in 2 contracts
Sources: Merger Agreement (At&t Wireless Services Inc), Merger Agreement (SBC Communications Inc)
Interim Operations. (a) The Company covenants Unless theglobe otherwise agrees in writing and agrees except as to itself and its Subsidiaries thatotherwise expressly contemplated by this Agreement, from and after between the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Closing, the Company shall, and the Sellers shall cause each of its Subsidiaries the Company and the Subsidiary to, (i) conduct the business of the Company and the Subsidiary only in the ordinary course and consistent with past practice; (ii) use its reasonable best efforts to conduct preserve and maintain their assets and properties and the Retained Business current relationships of the Company and the Subsidiary with their respective customers, suppliers, advertisers, distributors, agents, officers and Employees and other Persons with which the Company and the Subsidiary have significant business relationships; (iii) use reasonable best efforts to maintain all of the material assets owned or used by the Company and the Subsidiary in the ordinary course of business consistent with past practice, ; (iv) continue capital expenditures substantially in accordance with the timing and amounts forecast for capital expenditures as set forth in the schedule of capital expenditures previously provided by the Company shallto theglobe; (v) maintain insurance in full force and effect substantially comparable in amount, scope and shall cause each coverage to that in effect on the date of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, this Agreement; (vi) use commercially reasonable best efforts to preserve the Retained Business’ organization intact goodwill and maintain ongoing operations of the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 the Subsidiary; (vii) maintain the books and records of the Company and the Subsidiary in the usual, regular and ordinary manner, on a basis consistent with past practice; (viii) perform and comply in all material respects with its Subsidiaries’ present employees Commitments; and agents(ix) comply in all material respects with applicable Laws.
(b) Without limiting the generality ofExcept as expressly contemplated by this Agreement, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after between the date of this Agreement and the Closing, the Company will not, and the Sellers will cause the Company and the Subsidiary not to, do any of the following without the prior written consent of theglobe:
(i) create any Encumbrance on any material properties or assets (whether tangible or intangible) of the Company or the Subsidiary;
(A) other than inventory in the ordinary course of business, sell, assign, transfer, lease or otherwise dispose of or agree to sell, assign, transfer, lease or otherwise dispose of any assets of the Company or the Subsidiary or (B) cancel any indebtedness owed to the First Effective Time Company or the Subsidiary;
(unless Parent iii) merge or consolidate with any Person;
(iv) acquire assets or capital stock of or other equity interests in any Person;
(v) (A) issue, incur, create, assume or otherwise become liable for any Indebtedness, (B) assume, grant, guarantee or endorse, or make any other accommodation or arrangement making the Company or the Subsidiary responsible for, any Liabilities of any other Person, (C) make any loans, advances or capital contributions to, or investments in, any Person or (D) repay any amounts owing under any Indebtedness;
(vi) change any method of accounting or accounting practice used by the Company or the Subsidiary;
(vii) (A) enter into or adopt or amend any existing Commitment relating to severance, (B) enter into or adopt or amend any existing severance plan, (C) enter into or adopt or amend any Commitment with any Employee or any Company Employee Plan (including, without limitation, the plans, programs, agreements and arrangements referred to in Section 3.20), (D) grant any options or awards pursuant to equity-based plans, or (E) grant any increases in compensation (except compensation increases associated with promotions and annual reviews in the ordinary course of business, which such compensation increases shall otherwise approve in writingbe subject to the prior written approval of theglobe, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:;
(iviii) except make any change in the Company's or the Subsidiary's Tax accounting methods, any new election with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation Taxes or bylaws (any modification or comparable governing documents) (other than amendments to the governing documents revocation of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement existing election with respect to the voting Taxes or settle or otherwise dispose of its capital stockany Tax audit, dispute, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock UnitsTax proceeding, in each case in accordance with past practice and with without theglobe's express written consent thereto.
(ix) accelerate or delay the terms purchase of supplies or inventory, the shipment or sale of inventory, the collection of accounts or notes receivable or the payment of accounts or notes payable or accrued liabilities or expenses or otherwise operate the respective businesses of the Company Stock Plans as in effect on and 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 thereofSubsidiary, in each case, so long in a manner that would be inconsistent with past practice;
(x) except as the aggregate principal amount thereof does not exceed $2,500,000,000set forth in Schedule 5.2(b)(x), (J) hedging engage in compliance any transaction with the hedging strategy any of the Company as Stockholders or any of the date of this Agreement in the ordinary course of business consistent their Affiliates;
(xi) enter into, modify, terminate, amend, or waive, release or assign any rights or claims with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior respect 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 Commitment other than in the ordinary course of business consistent with past practice;
(vxii) with respect allow the lapse of any rights of ownership or use by the Company or the Subsidiary of any Company Intellectual Property right;
(xiii) repurchase, redeem or otherwise acquire or exchange any share of Company Common Stock, issue or sell any additional shares of the capital stock of, or other equity interests in, the Company or the Subsidiary, or issue or sell any securities convertible into or exchangeable for such shares or equity interests, or issue or grant any options, warrants, calls, subscription rights or other rights of any kind to acquire additional shares of such capital stock, such other equity interests or such securities;
(xiv) amend the Retained BusinessCompany's Certificate of Incorporation, other than with respect to acquisitions as amended, or Amended and Restated Bylaws or the Subsidiary's Memorandum and Articles of businessesAssociation or equivalent organizational documents of either the Company or the Subsidiary;
(xv) declare, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x)set aside, make or commit to pay any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses dividend or other dispositions of any properties or assets distribution (excluding capital stock of the Retained Subsidiaries) with a fair market value not whether in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiariescash, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, property or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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)(viiicombination thereof);
(ixxvi) with respect take any action that is reasonably likely to the Retained Business, 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 spend in excess of (A) $25,000,000 if the transaction is not result in the ordinary course representations and $50,000,000 warranties set forth in Article III becoming false or inaccurate 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 material respect as of the date Closing Date; or
(xvii) agree to take any of the agreement for such acquisitionactions referred to in this Section 5.2(b); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 2 contracts
Sources: Merger Agreement (Theglobe Com Inc), Merger Agreement (Theglobe Com Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time or the termination of this Agreement in accordance with its terms (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed), and except as (1) otherwise expressly contemplated or permitted by this Agreement or required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Law or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a7.1(a) of the Company Disclosure Letter)Schedule, the Company shall, and its Subsidiaries shall cause each the business of it and its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business be conducted in the ordinary course of business consistent with past practice, and the Company shall, it and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorsofficers, licensorsemployees, creditors, lessors, employees lenders and business 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 agentsassociates.
(b) Without limiting the generality ofof the foregoing, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date hereof until the Effective Time or the termination of this Agreement and prior to the First Effective Time in accordance with its terms, except (unless A) as otherwise specifically contemplated or permitted by this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) is required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or (3D) otherwise expressly disclosed as set forth in Section 5.01(b7.1(b) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and adopt any change in (A) the SpinCo certificate of incorporation or bylaws of the Company or (B) the other applicable governing instruments of the Subsidiaries (other than of the Company that, in the case of clause (A)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, amalgamate or consolidate the Company or any of its Subsidiaries with any other Person;
(iii) make any acquisition in excess of $50 million for all acquisitions in the aggregate, of the capital stock or other ownership interests of any other Person or the business or assets that comprise a business or product line of any other Person, whether by way of stock purchase, asset purchase, merger, consolidation or otherwise, except for acquisitions of inventory or supplies in the ordinary course of business;
(iv) other than (A) amend its certificate the issuance of incorporation Shares upon the settlement of Company Equity Awards outstanding as of the date hereof or bylaws (or comparable governing documentsissued in accordance with Section 7.1(b)(xvii) (other than amendments to the governing documents of any Subsidiary of the Company that would not preventand dividend equivalents thereon, delay or impair the Initial Merger or the other Transactionsif applicable), (B) split, combine, subdivide or reclassify its outstanding the issuance of shares of capital Company Subsidiary stock (except for any such transaction by a wholly owned subsidiary of to the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company, (C) as required to another direct comply with any Benefit Plan, Benefit Agreement or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends other written agreement as in effect on the Common Stock as described in date of this Agreement and set forth on Section 5.01(b)(i7.1(b)(iv) of the Company Disclosure Letter)Schedule, or (D) enter into any agreement with respect to the voting of its capital stockdispositions permitted by clause (xiv), or (E) purchaseissue, repurchasesell, redeem or otherwise acquire dispose of, grant any shares of its capital stock or other ownership interests of the Company or any of its Subsidiaries or securities convertible or exchangeable into or exercisable for any shares of its 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 any loans, advances or capital contributions to or investments in any Person (other than (1A) to the Company or its wholly owned Subsidiaries, (B) as required pursuant to any Contract made available to Parent in the forfeiture ofdata room prior to the date hereof, (C) extensions of trade credit in the ordinary course of business and (D) loans, advances or withholding capital contributions in the aggregate of Taxes less 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, 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 to any 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 its capital stock or other acquisitions of securities of ownership interests (except dividends or distributions by any direct or indirect wholly owned Subsidiary of the Company by to the Company or to any other wholly owned direct or indirect Subsidiary of the Company); provided, that the Company may, at its election, pay quarterly cash dividends in accordance with its past 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 Company shall in no event declare any dividend that would be payable after the Effective Time;
(iivii) merge reclassify, split, combine, subdivide or consolidate with redeem, purchase or otherwise acquire, directly or indirectly, any of the capital stock of the Company or other Person, ownership interests or restructure, reorganize securities convertible or completely exchangeable into or partially liquidate exercisable for any shares of the capital stock of the Company or other ownership interests of the Company (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 Subsidiary is the surviving entity acquisitions in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongcashless exercises of Company Stock Options or vesting or payment of Company Equity Awards, or Tax withholdings on the restructuring, reorganization vesting or liquidation of, any wholly owned Subsidiaries payment of the Company that would not prevent, materially delay or materially impair the TransactionsEquity Awards);
(iiiviii) except as expressly required by incur, assume, issue, modify, renew, syndicate, guarantee, prepay, refinance or otherwise become liable for any Company Plan as in effect on the date hereof: Indebtedness (directly, contingent or otherwise) (other than (A) establish, adopt, amend or terminate any material Company Plan or amend the terms letters of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan credit issued in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofpractice, (B) grant for borrowings in the ordinary course of business under (1) the Existing Credit Facility or provide (2) the Company’s commercial paper program, (C) any transaction Indebtedness between the Company and any of its Subsidiaries or retention bonuses between the Subsidiaries of the Company or (D) in an amount not to exceed $50,000,000) or acquire or redeem, offer to acquire or redeem, or exercise any directorright to make an offer to acquire or redeem the 3.375% Notes due November 1, officer2020;
(ix) make any capital expenditures, employee other than (A) capital expenditures in 2014 not in excess of the aggregate amount set forth in the Company’s capital 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 the 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 the aggregate; provided, however, that the Company and its Subsidiaries shall be permitted to make emergency capital expenditures in an amount not to exceed $10,000,000 in the aggregate;
(x) make any material changes with respect to financial or Tax accounting methods of reporting income, deductions or other service provider items to financial accounting purposes, except as required by applicable Law or by changes in GAAP;
(xi) 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, arbitration or other 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 material equitable or material non-monetary relief on the Company, any of its Subsidiaries or any of its officers or directors or (z) that requires the admission of wrongdoing by the Company or any of its Subsidiaries of a nature that would reasonably be expected to have any material adverse effect on any division of the Company or any of its Subsidiaries, (C) increase the compensation, bonus Subsidiaries or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company that disparages Parent or any of its Subsidiaries;
(ivxii) incur any Indebtedness change its fiscal or issue any warrants or other rights to acquire any IndebtednessTax year or, except to the extent required by Law, make or change any material Tax election;
(xiii) enter into any settlement, compromise or closing agreement with respect to any material 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 of Taxes (except to the extent the consequences thereof are adequately reserved in accordance with GAAP in the Company Reports);
(xiv) sell, lease, license, transfer or otherwise dispose of any of its properties or assets (including capital stock of any Subsidiary of the Company) with a value in excess of $20,000,000 (including the value of any assumed liabilities), other than (A) sales or other dispositions of inventory and other assets in the ordinary course of business, (B) the licensing or sublicensing of Intellectual Property in the ordinary course of business consistent with past practice in a principal amount not or (C) as required pursuant to exceed $400,000,000 existing Contracts made available to Parent in the aggregate at dataroom prior to the date hereof;
(xv) (A) abandon, voluntarily permit to lapse before expiration, any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial Company IP that is material 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, or (B) except with respect sell, transfer or license to the Bridge Facility, in replacement of, any third-person or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial otherwise extend any Company IP that is material to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date non-exclusive licenses 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of Intellectual Property rights granted by the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(vxvi) except in the ordinary course of business, enter into or assume any swap, cap, floor, collar, futures contract, forward contract, option and any other derivative financial instrument, contract or arrangement, based on any commodity, security, instrument, asset, rate or index of any kind 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 respect 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 Retained Businessdate 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 plan, program, arrangement, policy or agreement that would be a Benefit Plan or Benefit Agreement if it were in existence on the date hereof, other than with respect to acquisitions Benefit Plans and Benefit Agreements that are not described in clause (D) below and in cases where such adoption, termination or amendment applies only to non-Executive Officers of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties the Company or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with Subsidiary of the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) Company in the ordinary course of business consistent with past practice 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, (D) grant any 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 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 aggregate not in excess ordinary course of 120% business consistent with past practice and with respect to Executive Officers as needed to replace such Executive Officer, (F) terminate the employment of any current Employee or the engagement of any current contractor of the amounts reflected Company or any Subsidiary of the Company, other than in the Company’s capital expenditure budget ordinary course of business consistent with past practice or for cause, (G) negotiate, enter into, amend, modify or terminate any Collective Bargaining Agreement, or (H) waive, limit, release or condition any Restrictive Covenant obligation or any Employee or Other Service Provider; provided, however, that the foregoing clauses (A) – (H) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or to Employees in the context of promotions based on job performance or workplace requirements, including replacement of an open position, in each case in the ordinary course of 2017business, 2018 plans, agreements, benefits and 2019 set forth 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, further, that the consent of Parent shall be required in the event of a promotion or hiring to the Executive Officer level unless such promotion or hiring is to replace an Executive Officer. For purposes of this Section 5.01(b)(v7.1(b), the “Executive Officers” are those individuals listed on Section 7.1(b)(xvii) of the Company Disclosure LetterSchedule;
(vixviii) with respect 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 assets of the Company or any of its Subsidiaries other than Permitted Liens;
(xx) enter into any new line of business that would be material to the Retained BusinessCompany and its Subsidiaries, transfertaken as a whole, leaseoutside the businesses being conducted by the Company and its Subsidiaries on the date hereof and any reasonable extensions thereof, licenseother than in the ordinary course;
(xxi) enter into any Contract that, sellafter giving effect to the Merger, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon would limit or otherwise dispose restrict in any material respect Parent or any of its respective Affiliates (other than the Company and its Subsidiaries), from engaging or competing in any line of business, in 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 Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests Material Contract in connection accordance with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensesits terms), in each ease case, 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 other than $35,000,000 individually if the transaction is not in the ordinary course of business;
(xxiii) enter into any transactions, agreements, arrangements or $75,000,000 individually in understandings with any event significant holder of Shares or their respective affiliated entities (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations that would be required to be disclosed under Item 404 of Intellectual Property that is used or held for use exclusively in Regulation S-K promulgated under the SpinCo Business and (E) Affiliation AgreementsSecurities Act;
(viixxiv) with respect to terminate the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose employment of any properties Executive Officer without cause or assets (including capital stock change the terms and conditions of employment of any of its Retained Subsidiaries but not including any Intellectual Property, Executive Officer in a manner which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with would constitute “good reason” under a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among Contract between the Company and the Retained Subsidiaries;such Executive Officer; or
(viiixxv) except with respect agree, authorize or commit, whether or not in writing, to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, do any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing
Appears in 2 contracts
Sources: Merger Agreement, Merger Agreement (Sigma Aldrich Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, that from and after the execution date of this Agreement and prior to until the First Effective Time (Time, unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and except as (1) otherwise expressly contemplated by this Agreement or as required by applicable LawLaws, the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain their existing relations and goodwill with Governmental Entities, customers, manufacturers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present employees and agents of the Company and its Subsidiaries. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (2i) as otherwise expressly required by the Transaction Documents this Agreement, (including ii) as Parent may approve in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) writing or (3iii) otherwise expressly disclosed as set forth in Section 5.01(a6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in any provision of the Company Governing Documents;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company that are not obligors or guarantors of third-party indebtedness;
(c) acquire assets outside of the ordinary course of business from any other Person with an aggregate value or purchase price in excess of $125,000, other than capital expenditures within the Company’s capital expenditure budget as set forth in Section 6.1(c) of the Company Disclosure Letter), ;
(d) enter into any material line of business other than the line of business in which the Company shalland its Subsidiaries is currently engaged as of the date of this Agreement or distribute products other than the type of products that the Company and its Subsidiaries are currently distributing as of the date of this Agreement;
(e) issue, and shall cause each sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of or other equity interest in the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other equity interest;
(f) other than in the ordinary course of business, create or incur any Lien material to the Company or any of its Subsidiaries on any assets used in the businesses of the Company or any of its Subsidiaries having a value in excess of $125,000;
(g) make any loans, advances or capital contributions to, use or investments in, any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $125,000 in the aggregate;
(h) declare, set aside or pay any dividend or distribution (whether in cash, stock or property or any combination thereof) with respect to any shares of capital stock of any Subsidiary, except for dividends or distributions by any direct or indirect wholly owned Subsidiaries of the Company and pro rata dividends or distributions payable to holders of interests in non wholly owned Subsidiaries;
(i) reclassify, split (including a reverse split), recapitalize, subdivide or repurchase, redeem or otherwise acquire, directly or indirectly, any of its capital stock;
(j) incur any indebtedness for borrowed money 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 or enter into any capital lease, except for (A) indebtedness for borrowed money incurred in the ordinary course of business under the Company’s existing revolving credit facility (or any replacement facility therefor) not to exceed $50,000,000 in the aggregate, (B) refinancings on commercially reasonable best efforts terms or (C) guarantees by the Company of indebtedness of wholly owned Subsidiaries of the Company or guarantees by Subsidiaries of indebtedness of the Company;
(k) except as set forth in Section 6.1(k) of the Company Disclosure Letter, make or authorize any capital expenditure;
(l) other than in the ordinary course of business, enter into any Contract that would have been a Material Contract had it been entered into prior to conduct the Retained Business date of this Agreement (other than as permitted by Section 6.1(j));
(m) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or Regulation S-X promulgated under the Exchange Act, based upon the advice of its independent auditors after consultation with Parent;
(n) settle any pending or threatened civil, criminal or administrative actions, suits, claims, litigations, arbitrations, investigations or other proceedings for an amount to be paid by the Company or any of its Subsidiaries in excess of $150,000 or which would be reasonably likely to have any adverse impact on the operations of the Company or any of its Subsidiaries, or indemnify any Person other than pursuant to a contractual obligation to do so;
(o) other than in the ordinary course of business, (A) amend or modify in any material respect, or terminate or waive any material right or benefit under, any Material Contract (other than as permitted by Section 6.1(j)) or in respect of any pending or threatened civil, criminal or administrative actions, suits, claims, litigations, arbitrations, investigations or other proceedings, or (B) 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;
(p) 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 method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods or settle or compromise any material tax liability;
(q) sell, transfer, lease, license or otherwise dispose of any assets of the Company or its Subsidiaries except in the ordinary course of business or obsolete assets;
(r) notwithstanding anything to the contrary in this Section 6.1, sell, lease, abandon, transfer, dispose of, license or grant material rights under any material Company IP Rights or materially modify any existing rights with respect thereto, except in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take enter into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
settlement regarding (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents infringement of any Subsidiary of material Company IP Rights or (ii) the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect breach of any shares license agreements governing use of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)material IP Rights;
(iis) merge or consolidate with any other Personterminate, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, enter into, make any new grants or awards under, amend or terminate otherwise modify, or accelerate vesting or payment under any material Company Plan Benefit Plans or amend the terms of enter into any outstanding equity-based awards other than any such action taken for purposes of replacingnew employment or compensatory agreements or arrangements with, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofsalary, (B) grant or provide any transaction or retention bonuses to any directorwage, officer, employee bonus or other service provider compensation payable or to become payable to, any directors, officers, employees or consultants of the Company or any of its the Subsidiaries;
(t) adopt a plan of complete or partial liquidation, (C) increase the compensationdissolution, bonus or pensionrestructuring, welfare recapitalization or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees reorganization of the Company or any of its Subsidiaries;
(ivu) incur take any Indebtedness action, including the adoption of any shareholder rights plan, which would, directly or issue any warrants indirectly, restrict or other impair the ability of Parent or Merger Sub to vote, or otherwise to exercise the rights to acquire any Indebtedness, except (A) in the ordinary course and benefits 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 shareholder with respect to the Bridge Facilityto, 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations securities of the Company acquired or any of its Subsidiaries controlled or to be acquired or controlled by Parent or Merger Sub in accordance with respect to such Indebtedness (and Parent and its 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 Indebtednessthis Agreement; 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;or
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make agree or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Lowrance Electronics Inc), Merger Agreement (Simrad Yachting As)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use from and after the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly required by this Agreement or as required by a Governmental Entity or applicable Law and any Material Contract in effect prior to the date of this Agreement), conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course Ordinary Course of business Business and, to the extent consistent with past practicetherewith, shall use and the Company shall, and shall cause each of its Subsidiaries 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 efforts to preserve the Retained Businessmaintain its and its Subsidiaries’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees, agents and business associates; provided that, during any period of full or partial suspension of operations in response to COVID-19 or any COVID-19 Measures, the Company or any of its Subsidiaries may, in response to COVID-19 or any COVID-19 Measures, take such actions as are reasonably necessary (x) to protect the health and safety of the Company’s or its Subsidiaries’ employees and business associates and others other individuals having material business dealings with the Retained Business Company or any of its Subsidiaries or (including material content providersy) to respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersin each case of clause (x) and keep available (y), subject to reasonable prior consultation with Parent to the services of the Company and its Subsidiaries’ present employees and agents.
(b) extent reasonably practicable. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatforegoing sentence, from and after the date of this Agreement and prior to until the First earlier of the Effective Time (unless Parent shall otherwise approve in writingand the termination of this Agreement pursuant to Article IX, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) otherwise expressly required by this Agreement, as required by a Governmental Entity or applicable Law, as approved in writing by Parent (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distributionsuch approval not to be unreasonably conditioned, withheld or delayed) or (3) otherwise expressly disclosed set forth in the corresponding subsection of Section 5.01(b7.1(a) of the Company Disclosure Letter)Schedule, the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company, 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) acquire, directly or indirectly by merger, consolidation, acquisition of stock or assets or otherwise, any business, Person, properties or assets, other than acquisitions of inventory or other goods in the Ordinary Course of Business;
(iv) transfer, sell, license, 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 of the Company or any of its Subsidiaries, including capital stock or other equity interests of any of its Subsidiaries, except in connection with (A) sales of obsolete assets, (B) nonexclusive licenses granted by the Company or its Subsidiaries with respect to SpinCo Intellectual Property Rights in the Ordinary Course of Business and (C) sales of inventory or other goods in the SpinCo Subsidiaries Ordinary Course of Business;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or otherwise enter into any Contract or other agreement, understanding or arrangement (whether oral or written) with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or 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 in the case of clause (A)), (A) amend its certificate proxies or voting agreements solicited by or on behalf of incorporation the Company in connection with the Company’s annual meeting of stockholders or bylaws (B) the issuance of shares of such capital stock, other equity securities or comparable governing documentsconvertible or exchangeable securities (1) (other than amendments to the governing documents of any by a Wholly Owned Subsidiary of the Company that would not preventto the Company or another Wholly Owned Subsidiary of the Company or (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, delay as applicable, the Stock Plans in effect on the Capitalization Date);
(vi) make any loans, advances, guarantees or impair capital contributions to or investments in any Person (other than to or from the Initial Merger Company and any of its Wholly Owned Subsidiaries) and for loans or advances made to directors, officers and other employees of the Company and its Subsidiaries (x) for business-related travel, other business-related expenses, in each case, in the Ordinary Course of Business or (y) pursuant to the indemnification and advancement rights of such Persons in effect as of the date of this Agreement under any agreement between or among such Person and the Company or any Subsidiary thereof, correct and complete copies of which have been made available to Parent, or the Organizational Documents of the Company or any Subsidiary thereof;
(vii) declare, set aside, make or pay any dividend or other Transactionsdistribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company and for regular quarterly dividends declared and paid at such times and in such amounts as is consistent with historical practice over the twelve-month period prior to the date of this Agreement (Bbut under no circumstances in an amount that exceeds $0.175 per Share per calendar quarter);
(viii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, other equity interests or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests (other than (1) pursuant including with respect to the forfeiture Company, for the avoidance of doubt, Shares);
(ix) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for 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) make or authorize any payment of, or withholding accrual or commitment for, capital expenditures in excess of Taxes with respect to$250,000 in the aggregate, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, except to the extent set forth in each case the Company’s capital budget set forth in accordance with past practice and with the terms Section 7.1(a)(x) of the Company Stock Plans as 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 Contracts with customers, suppliers, agents, distributors or sales representatives (including “authorized dealers”) entered into in effect on the date 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 Agreement Section 7.1(a), including any material amendment, modification or supplement to an existing Contract in compliance with Section 7.1(a)(xii);
(xii) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(ix), Section 7.1(a)(vi) and Section 7.12, terminate, materially amend, materially waive, or as modified after assign, convey, encumber or otherwise transfer, in whole or in part, any material rights or interest pursuant to or in, any Material Contract, other than expirations of any such Contract in the date Ordinary Course of this Agreement Business and in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company such Contract with no further action by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect for any ministerial actions, or non-exclusive licenses, covenants not to (1) employees below the 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 compensations▇▇, bonus or pensionreleases, welfare waivers or other benefits prior rights under Intellectual Property Rights owned or purported to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of be owned by the Company or any of its Subsidiaries, in each case, that are granted in the Ordinary Course of Business;
(Exiii) cancel, modify or waive any debts or similar claims held by the Company or any of its Subsidiaries having in each case a value in excess of $100 thousand in the 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 any such License is with respect to a License that has become obsolete, redundant or no longer required by applicable Law or for the operation of the Company’s business);
(xv) for the avoidance of doubt, except as expressly provided for by Section 7.11, amend, modify, terminate, cancel or let lapse a material Insurance 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 effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(xvi) 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 7.16, Section 4.2(f) and Section 7.1(a)(xviii), respectively, settle or compromise any Proceeding for an amount in excess of $100 thousand in the aggregate during any calendar year, or which would reasonably be expected to (A) have a materially negative impact on the operations and reputation of the Company and its Subsidiaries or (B) involve any criminal liability or any admission of material wrongdoing or any material wrongful conduct by the Company or any of its Subsidiaries;
(xvii) make any changes with respect to accounting policies or procedures, except, in each case, as required by changes in GAAP;
(xviii) make, change or revoke any material Tax election, change an annual U.S. Federal Income or other material Tax accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to material Taxes, settle or compromise any material Tax claim, audit, assessment or dispute, 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;
(xix) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property Rights that are owned by the Company or any of its Subsidiaries and are material to the businesses of the Company and its Subsidiaries, except, solely with respect to Intellectual Property Rights that are not material to the businesses of the Company and its Subsidiaries, in the Ordinary Course of Business;
(xx) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by applicable Law, (A) increase in any manner 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 the date of this Agreement (other than offer letters providing for an “employment at will” relationship without any right to contractual severance, entered into with new hire employees in the Ordinary Course of Business), (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, (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 benefits under any Company Plan (including any equity-based awards)Benefit Plan, (FE) 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 or determined, except as may be required by GAAP, (GF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or loans to any Company Employee (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 routine travel advances issued in the ordinary course Ordinary Course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstandingBusiness and those loans, (F) Indebtednessadvances, the proceeds of which will be used to finance all guarantees 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereofcapital contributions expressly permitted by Section 7.1(a)(vi)), (G) Indebtedness under the Bridge Facility, refinancings hire any employee or replacements thereof and engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess 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) 200,000 or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with terminate the funding employment 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 practiceexecutive officer other than for cause;
(vxxi) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with respect to the Retained Businessa labor union, other than with respect to acquisitions of businesseslabor organization, which is subject to Section 5.01(b)(ix)works council or similar organization; or
(xxii) agree, and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected foregoing.
(b) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct 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 respect or its Subsidiaries’ operations prior to the Retained BusinessEffective Time or give the Company, transferdirectly or indirectly, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon the right to control or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses direct the Parent’s or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) with respect Merger Sub’s operations prior 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinEffective Time.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Collectors Universe Inc), Merger Agreement (Collectors Universe Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents this Agreement, (including B) as Parent may approve in connection with the Separation and the Distributionwriting (such approval not to be unreasonably withheld or delayed) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) adopt or propose any change in its Certificate of Formation or By-Laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with respect a value or purchase price in the aggregate in excess of $250,000 in any transaction or series of related transactions, other than acquisitions pursuant to SpinCo and Company Contracts in effect as of the SpinCo date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than in the case issuance of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any shares by a wholly-owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly-owned 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;
(v) create or incur any Lien material to the Company or any of its Subsidiaries not 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) splitpurchase or sell any loan or loan participation, combineindividually or in bulk, subdivide in one or reclassify its outstanding shares a series of capital stock 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 (except for 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 such transaction committee as required by a wholly owned subsidiary of United Central Bank’s current loan authority policy and administration. Neither the Company which remains a wholly owned Subsidiary after consummation nor any of such transaction)its Affiliates shall forgive any loans to directors, officers or employees;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (otherwise, with respect to or declare or make any combination thereof) in respect of distribution on, any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company any other direct or (2indirect wholly-owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(viii) 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) purchaseset any bonus metrics or targets, repurchase(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, redeem (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 acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock;
(x) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise as an accommodation become responsible for the long-term indebtedness of any other Person (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan deposits and similar liabilities in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 indebtedness of the Company’s Subsidiaries to the Company or any of its Subsidiaries, and (C) increase short term advances from the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except Federal Home Loan Bank in the ordinary course of business consistent with past practice practice);
(xi) except as set forth in the capital budgets set forth in Section 6.1(a)(xi) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $250,000 in the aggregate during any twelve (12) month period;
(xii) enter into any contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xiii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(1xiv) employees below 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 level same set of Executive Vice President facts or circumstances, for an amount greater than $250,000 in excess of applicable and (2) employees at confirmed insurance coverage or above specific loss reserves reflected on the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationCompany Interim Financial Statements, bonus or pension, welfare any obligation or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider 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 (C) 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 (EB) take 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 action to accelerate case with a remaining maturity at the vesting time of purchase of one year or payment less, purchase or acquire securities of compensation or benefits under any type; provided, however, that the Company Plan shall notify Parent of the purchase of any investment security in writing within one (including any equity-based awards1) 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.
(Fxx) change (A) commence or settle any actuarial litigation or other assumptions used to calculate funding obligations 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 Plan or or, after the Merger, which is reasonably likely to change have an adverse impact on the manner in which contributions to such plans are made Tax position of Parent or the basis on which such contributions are determined 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 (GC) forgive take any loans 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, change in any 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 maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof), except as required by applicable Law or policies imposed by any Governmental Authority; or
(xxiii) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries;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.
(ivc) 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) Parent shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company knowingly take or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have take 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which action that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 respect reasonably likely to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair prevent the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinMerger.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Hanmi Financial Corp), Merger Agreement (Hanmi Financial Corp)
Interim Operations. (a) The Each of 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, from and after except (i) as otherwise specifically permitted by the execution provisions of this Agreement and prior to the First Effective Time Agreement, (unless ii) as Parent shall otherwise may approve in writingwriting (such approval, which approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned), and except (iii) as (1) is required by any applicable LawLaw or any Order (as defined below) of any Governmental Entity, (2iv) 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 disclosed set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter), (v) as required by the Company shallBankruptcy 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 be conducted in the ordinary course of business in all material respects and in accordance with the Bankruptcy Code and the Orders of the Bankruptcy Court and (x) each of its the Company, EFIH and their respective Subsidiaries to(other than the Oncor Entities, subject to Section 6.23) shall use its reasonable best efforts to conduct the Retained Business in the ordinary course of preserve intact its business consistent organization and relationships with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entitiesemployees, customers, suppliers, distributors, licensors, creditors, lessors, employees suppliers and business 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) Governmental Entities. Without limiting the generality ofof the preceding provisions of this Section 6.1(a), and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement until the earlier of the Termination Date and prior to the First Effective Time Closing Date, except (unless A) as otherwise specifically permitted by the provisions of this Agreement, (B) as Parent shall otherwise may approve in writingwriting (such approval, which approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) is required by any applicable LawLaw or any Order of any Governmental Entity, (2D) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed as set forth in Section 5.01(b6.1(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 shall and EFIH will not and shall will not permit any of its respective 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) to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation formation or bylaws or other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate with any other Person;
(iii) (adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization other than amendments pursuant to the governing documents Plan of Reorganization;
(iv) make any acquisition of any Subsidiary assets or Person for a purchase price in excess of $1,000,000, in the Company that aggregate, unless such acquisition would not preventbe permissible under Section 6.1(a)(xi) below;
(v) issue, delay sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or impair authorize the Initial Merger issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or the other Transactions)encumbrance of, (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock or other equity interests (except for other than (1A) any dividends the issuance of shares of Common Stock upon the settlement of awards outstanding as of the date hereof under the Company Stock Plan (and dividend equivalents thereon, if applicable), or distributions paid (B) the issuance of equity interests 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, 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;
(vi) make 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);
(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 capital stock or other equity interest (except for dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to another any other direct or indirect wholly owned Subsidiary of the Company Company) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or (E) purchaseredeem, purchase or otherwise acquire or offer to repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such capital stock or other equity interests or such convertible or exchangeable securities;
(other than (1ix) pursuant to repurchase, redeem, defease, cancel, prepay, forgive, issue, sell, incur, or announce, offer, place, or arrange for the forfeiture incurrence 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 otherwise acquire any wholly owned Subsidiary of the Company by the Company indebtedness for borrowed money or any other wholly owned Subsidiary of the Company);
(ii) merge debt securities or consolidate with any other Personrights to acquire debt securities, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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, or assume, guarantee or otherwise become responsible for such indebtedness of another Person (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee than a wholly owned Subsidiary of the Company or any of its SubsidiariesCompany), except for indebtedness for borrowed money (A) incurred or repaid under the EFIH First Lien DIP (1) in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and or (2) employees at in connection with the refinancing thereof or above (B) incurred by drawing under outstanding letters of credit in the level ordinary course of Executive Vice President business;
(x) (A) grant to any Employee any increase in compensation or benefits other than increases in the ordinary course of business, (B) grant to any Employee any increase in change in control, severance or 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 increases a Contributed Plan, other than in the ordinary course of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changebusiness, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting time of vesting, funding or payment of any compensation or benefits under any Company Plan Assumed Plan, (including E) grant any equity-based new awards), or any outstanding awards, under any Assumed Plan, or (F) change enter into or amend any actuarial collective bargaining agreement or other assumptions used 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 calculate funding obligations 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 in excess of $1,000,000, in the aggregate, during any 12-month period;
(xii) make any material changes with respect to any Company Plan its financial accounting methods, principles, policies, practices or procedures, except as required by Law or by changes in GAAP;
(xiii) other than with respect to change the manner (1) audits or other Tax proceedings disclosed in which contributions to such plans are made or the basis on which such contributions are determined or (GSection 6.1(a)(xiii) forgive any loans to directors, officers or employees of the Company Disclosure Letter or (2) any action to accelerate the recognition of its Subsidiaries;
cancellation of indebtedness income that previously has been deferred pursuant to Section 108(i) of the Code, in each case, only and to the extent the foregoing would not materially adversely affect Parent, make (iv) incur excluding any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except elections made (Aa) 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 (b) under Section 168(k) of the Contract evidencing such IndebtednessCode) or change any material Tax election, (B) except change any material method of Tax accounting, settle or compromise any material Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any material Tax claim or assessment, grant any power of attorney with respect to the Bridge Facilitymaterial Taxes, in replacement of, enter into any closing agreement with respect to any material Tax or to refinance, existing Indebtedness on then prevailing market terms refund 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 programsamend any material Tax Return, in each case issuedcase, made other than as required by Law;
(xiv) waive, release, assign, settle or entered into in the ordinary course of business consistent with past practicecompromise any pending or threatened claim, (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 outstandingaction, (F) Indebtedness, the proceeds of which will be used to finance all suit 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of proceeding against the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its SubsidiariesA) for an amount in excess of $10,000,000, including, following or (B) that entails the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings acceptance or replacements thereof and of commitments thereunder, and any refinancings or replacements imposition of any such refinancing material restrictions on the business 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 operations 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;
(xv) transfer, taken as a wholesell, than the Indebtedness being replaced lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or refinanced; providedallow to lapse or expire or otherwise dispose of any assets, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing product lines 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 businesses of the Company as or its Subsidiaries (including capital stock of any of its Subsidiaries) with a fair market value in excess of $1,000,000, in the date aggregate, other than sales of this Agreement obsolete goods or equipment or the licensing or sublicensing of, Intellectual Property in the ordinary course of business consistent with past practice or pursuant to Contracts in connection with effect prior to the date hereof that have been made available to the Purchasers;
(xvi) other than pursuant to the Plan of Reorganization, (A) enter into, terminate (other than at the end of a Sky Acquisition and not for speculative purposesterm), renew or materially extend or amend any Company Material Contract or Contract that, if in effect on the date hereof, would be a Company Material Contract; provided that or (B) waive any material default under, or release, settle or compromise any material claim against the Company shall consult with Parent prior or any of its Subsidiaries or liability or obligation owing to entering the Company or any of its Subsidiaries under any Company Material Contract;
(xvii) enter into hedging activities in connection with Indebtedness any Contract that contains a change of the type described in clauses (G) control or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred similar provision that would require a payment to any Person counterparty thereto in connection with the funding consummation of Star India Private Limited and its Subsidiaries; provided the Transactions that the aggregate principal amount of such Indebtedness, replacements and refinancings does would 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 practiceotherwise be due;
(vxviii) with respect fail to maintain in full force and effect material insurance policies covering the Retained BusinessCompany and its Subsidiaries and their respective properties, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), assets and other than with respect to film businesses in a form and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business amount consistent with past practice and unless the Company determines, in its reasonable commercial judgment, that the aggregate not in excess form or amount of 120% such insurance should be modified; or
(xix) agree, authorize or commit to do any of the amounts reflected foregoing.
(b) 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 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 its controlled Affiliates to take any action that is reasonably likely to prevent in any material respect the consummation of any of the Transactions.
(d) Nothing contained in this Agreement is intended to give either Purchaser, directly or indirectly, the right to control or direct 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 respect or its Subsidiaries’ operations prior to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinEffective 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) The Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the date of termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) 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 disclosed set forth in Section 5.01(a4.1(a) of the Company 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 any action permitted by Section 4.21), the Company shall, and shall cause each of its the Company Subsidiaries to, use conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business in all material respects and in a manner consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable best efforts to maintain and preserve intact its business organization, keep available the Retained Business’ organization intact and services of key employees, maintain the Retained Business’ existing relations and goodwill satisfactory relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees distributors and business associates other commercial counterparties and others having maintain its material business dealings with the Retained Business assets and properties in their current condition (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers normal wear and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) tear excepted). Without limiting the generality of, and in furtherance of, the foregoing, during the Company covenants and agrees as to itself and its Subsidiaries that, period from and after the date of this Agreement and prior through the earlier of the Closing or the date of termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed as set forth in Section 5.01(b4.1(a) of the Company Disclosure Letter), (3) as required by applicable Legal Requirements or (4) as expressly required by this Agreement, the Company shall not (and shall not permit any of its Subsidiaries Company Subsidiary to:):
(i) amend the Company’s Organizational Documents or 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 prevent the consummation of the Closing or would reasonably be expected to adversely impact Parent and the Parent Subsidiaries);
(ii) split, 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 of the foregoing);
(iii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) with respect to SpinCo and any shares of the SpinCo Subsidiaries Company’s capital stock or the capital stock of any Company Subsidiary, except for dividends or other distributions paid by any 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 (A)C), (A) amend its certificate of incorporation in one or bylaws (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 comparable governing documents) (other than amendments to prevent the governing documents of any Subsidiary consummation of the Company that would not preventClosing;
(v) issue, delay sell, grant or impair the Initial Merger otherwise permit to become outstanding any additional shares of, or the other Transactions)securities convertible or exchangeable for, (B) splitor options, combinewarrants or rights to acquire, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock or the capital stock of any Company Subsidiary, other than: (except for (1A) any dividends or distributions paid by shares of capital stock of a direct or indirect wholly owned Subsidiary of the Company issued to either the Company or another direct wholly owned Subsidiary of the Company; (B) shares of Company Common Stock issuable upon exercise of Company Options or indirect 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 Company, other than: (A) sales of inventory or of obsolete assets in the ordinary course of business; (2B) normal semiannual cash dividends pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth on the Common Stock as described in Section 5.01(b)(i4.1(a)(vi) of the Company Disclosure Letter), ; (C) non-exclusive licenses of Company IP granted in the ordinary course of business; or (D) enter into disposals of any agreement with respect immaterial Company Registered IP resulting from a cancellation, abandonment or failure to renew any immaterial Company Registered IP in the voting ordinary course of its capital stock, business;
(vii) directly or (E) purchase, indirectly repurchase, redeem or otherwise acquire any shares of its the Company’s capital stock stock, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable into or exercisable for any shares of its the Company’s capital stock stock, except: (other than (1A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the forfeiture ofexercise 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 withholding settlement of Taxes with respect toCompany Options and Company RSU Awards outstanding on the date of this Agreement, Company Restricted Stock Unitsas applicable, 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 applicable award;
(viii) (A) incur any indebtedness for borrowed money, guarantee any such indebtedness, issue or as modified after the date of this Agreement in accordance with the terms of this Agreementsell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances to any other person; (2B) purchasesincur any Lien on any of its material property or assets, repurchasesexcept 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, redemptions terminate or materially amend any Company Plan or any collective bargaining or other acquisitions of securities labor agreement, (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any wholly owned Subsidiary director, independent contractor or employee of the Company by the Company or any Company Subsidiary, other wholly owned Subsidiary of than, (1) in the Company);
(ii) merge or consolidate with event the Closing has not occurred by March 1, 2024, increases in base salary to any other Person, or 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 such individuals who are not restricted thereby and other than mergers directors or consolidations of a Subsidiary officers of the Company in which such Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan Subsidiary in the ordinary course of business consistent with past practice that does do not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except exceed 5% in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President aggregate and (2) employees at or above the level of Executive Vice President increases 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, connection with promotions permitted under clause (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, (C) grant any 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 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 (E) commercial paper issued 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 in a principal amount not (A) amend, supplement or 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 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 expiration of the Dividend existing term of any Material Contract and (and fees and expenses in connection therewith2) or for general corporate purposes; provided that extensions at the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations option of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness Company Subsidiary under the Bridge Facility, refinancings or replacements terms 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 exercised in the ordinary course of business consistent with past practice), or (B) enter into any Contract that, if in effect on the date of this Agreement, would constitute a Material Contract;
(vxi) change any of its methods of financial accounting or accounting practices in any material respect other than 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 Retained Businesssale 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 with respect to acquisitions any abandonment of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties any Company Registered IP at the end of the applicable statutory term or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) otherwise in the ordinary course of business consistent with past practice and practice, or (B) disclose to any third party any Trade Secret included in the aggregate not Company IP, other than pursuant to a non-disclosure agreement restricting the disclosure and use of such Trade Secret, or in excess connection with any regulatory filing or any publication of 120% any patent application;
(xxi) except in the ordinary course of business, enter into any Contract under which the Company or 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 amounts reflected Code; or
(xxiv) authorize, enter into any Contract or make any commitment to do any of the foregoing.
(b) 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 otherwise give its prior consent in the Company’s capital expenditure budget for each of 2017writing (such consent not to be unreasonably withheld, 2018 and 2019 conditioned or delayed), (2) as set forth in Section 5.01(b)(v4.1(b) of the Company Parent Disclosure Letter;
, (vi3) with respect to 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 Retained BusinessLLC Conversion or any other action permitted by Section 4.12 or Section 4.21), transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonmentParent shall, and cancellationsshall cause the Parent Subsidiaries to, and Liens that are ordinary course non-exclusive licenses, in each case, 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 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 $75,000,000 individually in any event the date of termination of this Agreement, except (other than transactions among 1) to the extent the Company and shall otherwise give its wholly owned Retained Subsidiariesprior consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (D2) licensesas set forth in Section 4.1(b) of the Parent Disclosure Letter, sales(3) as required by applicable Legal Requirements or (4) as expressly required by this Agreement, letting lapse, abandonment Parent shall not (and cancellations shall not permit any Parent Subsidiary to):
(i) amend Parent’s Organizational Documents in any manner which would reasonably be expected to materially delay or prevent the consummation of Intellectual Property that is used the Closing or held for use exclusively would be adverse in any material respect to the SpinCo Business and (E) Affiliation Agreementsholders of Company Class A Common Stock relative to holders of Parent Class A Common Stock;
(viiii) with respect to split, combine, subdivide, amend the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon terms of or otherwise dispose reclassify any shares of any properties the Parent’s capital stock or assets (including the capital stock of any of its Retained Subsidiaries but not including Parent Subsidiary (other than any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for wholly owned Parent Subsidiary) (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible into or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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)(viiiforegoing);
(ixiii) 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 Retained Businesscapital stock of any Parent Subsidiary, except for dividends or other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect distributions paid by any wholly owned Parent Subsidiary to film and television production and programming Parent or video game production, which is subject to Section 5.01(b)(x), spend or commit to 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactionsanother wholly owned Parent Subsidiary;
(xiv) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses directly or indirectly repurchase, redeem or otherwise acquire any shares of film and television and production programming Parent Common Stock (includinexcluding, for clarity, securities convertible
Appears in 2 contracts
Sources: Merger Agreement (EchoStar CORP), Merger Agreement (DISH Network CORP)
Interim Operations. (a) The Company covenants During the period commencing on the date hereof and agrees as to itself running until the earlier of the Closing Date and its Subsidiaries that, from and after the execution termination of this Agreement and prior to in accordance with Article VIII (the First Effective Time “Pre-Closing Period”), except (unless Parent shall otherwise approve in writingi) as expressly contemplated, which approval shall not be unreasonably withheldrequired or permitted by this Agreement (including, conditioned or delayedfor the avoidance of doubt, and except the Company LLC Units Redemptions), (ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or as contemplated by the Final Step Plan) conditioned), or (3iv) otherwise expressly disclosed in as set forth on Section 5.01(a) 6.1 of the Company Disclosure Letter)Schedule, the Company shallwill, and shall will cause each of its Subsidiaries to use reasonable efforts to, use its reasonable best efforts to (A) conduct their businesses in the Retained Business ordinary course of business consistent with past practice, (B) manage their working capital in the ordinary course of business consistent with past practice, and the Company shall(C) preserve intact in all material respects their respective assets, properties, business organizations and shall cause each of its Subsidiaries torelationships with partners, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customersclients, suppliers, distributors, licensors, creditors, lessors, employees distributors and business associates and others having other Persons with which it has 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 dealings; provided that no action by the Company and or its Subsidiaries’ present employees and agentsSubsidiaries with respect to matters specifically permitted by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would otherwise constitute a breach of such provision of Section 6.1(b).
(b) Without limiting During the generality ofPre-Closing Period, and in furtherance ofexcept (i) as expressly contemplated, the foregoingrequired or permitted by this Agreement, the Company covenants and agrees (ii) as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld, delayed or conditioned) or (3iv) otherwise expressly disclosed in as set forth on Section 5.01(b) 6.1 of the Company Disclosure Letter)Schedule, the Company shall not will not, and shall not permit any of will cause its Subsidiaries not to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its adopt any change in the certificate of incorporation or bylaws of the Company or (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 or comparable governing documents) (consolidate the Company or any of its Subsidiaries with any other Person, or restructure, 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 amendments to the governing documents restructuring, reorganization, recapitalization, liquidation or dissolution of any Subsidiary of the Company that would are immaterial to the Company and its Subsidiaries, taken as a whole, and to the extent such actions are not preventexpected to be adverse to Parent;
(iii) issue, delay sell, pledge, encumber, dispose of or impair grant, or authorize the Initial Merger issuance, sale, pledge, encumbrance, disposition or grant of, any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other Transactions)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 Company and its Subsidiaries or among the Company’s Subsidiaries or (B) any grant or issuance of shares of Company Stock or Company LLC Units (1) in redemption of Company LLC Units in accordance with the terms of the Company LLC Agreement, (2) in respect of any exercise of Company Options or Company SARs, (3) in settlement of any Company RSUs or Company PSUs or (4) in connection with the conversion or cancellation of any Class G Units or Class G Common Stock;
(iv) make any loans, advances or capital contributions to or investments in any Person (other than to the Company or any of its Subsidiaries);
(v) 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 (A) dividends or other distributions paid by any Subsidiary of the Company to the Company or to any other Subsidiary of the Company and (B) distributions in accordance with Section 5.03 of the Company LLC Agreement, to the extent consistent with past practice;
(vi) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock except for (other than A) any such transaction solely among the Company and any of its Subsidiaries or solely among any of the Company’s Subsidiaries, (1B) pursuant to the forfeiture ofacquisitions of shares of Company Stock or Company LLC Units in satisfaction of withholding obligations in respect of Company Equity Awards, or withholding (C) acquisitions of Taxes Company LLC Units in connection with respect to, a redemption of such Company Restricted Stock Units, Company Deferred Stock LLC 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 LLC Agreement;
(vii) create, incur, assume or as modified after the date of this Agreement in accordance with the terms of this Agreement) guarantee any Indebtedness for borrowed money or (2) purchases, repurchases, redemptions issue any debt securities or other acquisitions of securities of any wholly owned Subsidiary guarantees of the same or any other Indebtedness, except for (A) borrowings in the ordinary course of business under the Company Credit Agreement, (B) guarantees or credit support provided by the Company or any other wholly owned Subsidiary of its Subsidiaries of the Company);
(ii) merge or consolidate with any other Person, or 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 obligations of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned of its Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase to the cost of extent such Company Plan or benefits provided under such Company Plan based on the cost Indebtedness is in existence on the date hereofof this Agreement or incurred in compliance with clause (A) of this Section 6.1(b)(vii), (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, and (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 solely among the Company and its wholly owned Subsidiaries or among the Company’s Subsidiaries, ;
(Dviii) (1A) 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 other than 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, (EB) commercial paper issued amend, modify or waive in the ordinary course of business consistent with past practice any material respect or in a principal 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 not to exceed in excess of $250,000,000 500,000 individually or $1,500,000 in the aggregate at other than (A) any time outstandingsettlement 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 (FB) Indebtednesssettlements 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 proceeds settlement or compromise of which will be used to finance all such Action does not (x) impose any non-de minimis restriction on the business 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations operations of the Company or any of its Subsidiaries with respect to such Indebtedness (or Parent or any of its Subsidiaries after the Closing) and Parent and (y) include any non-de minimis non-monetary or injunctive relief, or the admission of wrongdoing, by the Company or any of its SubsidiariesSubsidiaries or any of their respective officers or directors;
(xii) assign, includingtransfer, following the Distributionsell, the Retained Subsidiarieslease, shall not have any obligations in respect thereoflicense, encumber (other than Permitted Liens), (G) Indebtedness under the Bridge Facilityabandon, refinancings permit to lapse, or replacements thereof and of commitments thereunder, and any refinancings or replacements otherwise dispose of any such refinancing material assets or replacement Indebtedness; provided that property (including any material Intellectual Property rights) except (A) as may be required by a Governmental Authority to permit or facilitate the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 consummation of the Company Disclosure Letter; provided, further, that Mergers or any of the Company shall consult with Parent prior other transactions contemplated in this Agreement solely to incurring Indebtedness under this clause (G)the extent required pursuant to Section 6.5, (HB) 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 transactions among the Company and its Subsidiaries or among the Company’s Subsidiaries, taken (C) as a whole, than the Indebtedness being replaced or refinanced; provided, further, that permitted under the Company shall consult with Parent prior Credit Agreement, or (D) 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 incurring Indebtedness under this clause (H)the current or former employees, (I) any amendmentofficers, refinancing directors or renewal other individual service providers of the existing revolving and term loan facilities 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 YES Facility 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 refinancing thereofperformance criteria, metrics or targets under any Plan such that, as compared to those criteria, metrics or targets under any Plan 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 effect as of the date of this Agreement Agreement, the performance criteria, metrics or targets would reasonably be expected to be more likely to be achieved than in the ordinary course absence of business consistent with past practice such amendment or modification;
(xiv) acquire any business, assets or capital stock of any Person or division thereof, whether in whole or in connection with a Sky Acquisition part (and not for speculative purposes; provided that 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 shall consult with Parent prior to entering into hedging activities in connection with Indebtedness or any 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 Subsidiaries in the ordinary course of business consistent with past practice;
(vxv) with respect to the Retained Business, make (other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business a manner consistent with past practice and practice), change or 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 aggregate not statute of limitations in excess respect of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017any Taxes, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Businessor settle, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon resolve or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests Action in connection with the production or financing respect of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation AgreementsTaxes;
(viixvi) with respect incur, or commit to the Retained Businessincur, 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not expenditures that are in excess of $50,000,000 500,000 individually if the transaction is not or $1,500,000 in the ordinary course aggregate, other than any capital expenditure (or $100,000,000 individually series of related capital expenditures) made in any event or (B) transactions among accordance with 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 shares of its Company’s annual capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) expenditure budget for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on periods following the date of this Agreement in accordance with the existing terms of such awards and the Company Stock PlansAgreement, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries provided to Parent prior to the Company or date hereof;
(xvii) (A) make any material modifications to any other wholly owned Subsidiary of the Company; provided thatmaterial Business Systems, excluding, for the avoidance of doubt, granting customary profit participation rights any routine updates or entering into customary film previously scheduled upgrades necessary for the continued performance, function or television financing partnerships operation of such Business Systems, or contractual arrangements (B) enter into, terminate, or materially amend or modify, any Contract for film the purchase, license or television financing shall be deemed not to be an issuance, sale or grant integration 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)material property management system Software;
(ixxviii) with respect voluntarily terminate, suspend, abrogate, amend or modify any material Company Permit in a manner materially adverse to the Retained BusinessCompany and its Subsidiaries, taken as a whole;
(xix) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other than capital expenditures made in accordance with Section 5.01(b)(vrestrictive covenant obligation of any current or former officer, manager, employee or independent contractor of the Employer Entities;
(xx) 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 spend in excess of (A) $25,000,000 if 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 transaction is not 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 and the annual payment obligations thereunder by the Company or any of its Subsidiaries do not exceed $50,000,000 in any event or (B) $50,000,000 500,000 individually or $200,000,000 2,000,000 in the aggregate aggregate; or
(xxii) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Subs or any yearof their Affiliates, in each case directly or indirectly, the right to acquire any businesscontrol or direct the operations of the Company and its Subsidiaries prior to the Company Merger Effective Time. Prior to the Company Merger Effective Time, whether by mergerthe Company shall exercise, consolidationconsistent with the terms and conditions of this Agreement, purchase complete control and supervision over its and its Subsidiaries’ respective operations.
(d) Subject to the terms of property or assetsthis Agreement, licenses or otherwise (valuing any non-cash consideration at its fair market value as of including Section 6.5 and Section 6.13, from the date of the agreement for such acquisition); provided that neither this Agreement until the Company nor any Merger Effective Time, none of its Retained Parent, Merger Subs or their respective Subsidiaries shall enter into (i) knowingly take any such transaction action that would, or would reasonably be expected to, prevent, materially delay or materially impair impede the consummation of the Transactions;
Equity Financing; or (xii) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses acquire or agree to acquire by merging or consolidating with, or by purchasing substantially all of film and television and production programming the assets of or equity in, any Person (includina “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.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Vacasa, Inc.), Agreement and Plan of Merger (Vacasa, Inc.)
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries thatexpressly contemplated, from and after the execution of required or permitted by this Agreement and prior to the First Effective Time Agreement, (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or conditioned), (iv) as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in set forth on Section 5.01(a) 6.01 of the Company Disclosure LetterSchedule, 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, that, with respect to actions taken or omitted to be taken in reliance on this clause (v), to the extent permitted under applicable Law and practicable under the circumstances, the Company shallshall provide prior notice to and consult in good faith with Parent prior to taking such action), from the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article 8 and the Effective Time, the Company will, and shall will cause each of its Subsidiaries to, use its and their commercially reasonable best efforts to (A) conduct the Retained Business their businesses in the ordinary course of business consistent in all material respects and (B) preserve intact their business organizations and relationships with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees distributors and business associates and others having other Persons with which it has 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 agentsdealings.
(b) Without limiting the generality ofExcept (A) as expressly contemplated, and in furtherance ofrequired or permitted by this Agreement, the foregoing, the Company covenants and agrees (B) as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2C) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld, delayed or conditioned), (D) or (3) otherwise expressly disclosed in as set forth on Section 5.01(b) 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 not provide prior notice to and shall not permit any 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, and will cause its Subsidiaries not to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than x) adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws of the Company or (or comparable governing documentsy) (other than amendments to adopt any change in the governing organizational documents of any Subsidiary of the Company’s Subsidiaries, in each case whether by merger consolidation or otherwise;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, 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 that would not preventor any of its Subsidiaries;
(iii) issue, delay sell, pledge, dispose of or impair encumber, or authorize the Initial Merger issuance, sale, pledge, disposition or the other Transactions)encumbrance of, (B) split, combine, subdivide or reclassify its outstanding any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock 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 (except for A) any such transaction by a among the Company and its Subsidiaries or among the Company’s wholly owned subsidiary Subsidiaries or (B) any issuance of Shares pursuant to exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms;
(iv) make any loans, advances or capital contributions to or investments in any Person (other than to the Company which remains a or any of its wholly owned Subsidiary after consummation of such transactionSubsidiaries), ;
(Cv) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise with respect to any combination thereof) in respect of any shares of its capital stock (stock, except for (1) any dividends or other distributions paid by a direct or indirect any wholly owned Subsidiary of the Company to another direct the Company or indirect to any other wholly owned Subsidiary of the Company Company;
(vi) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the 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 wholly owned Subsidiary of the Company such transaction by the Company or any other a wholly owned Subsidiary of the Company, (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Equity 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);
(iivii) merge create, incur, assume or consolidate with guarantee any Indebtedness for borrowed money or issue any debt securities or guarantees of the same or any other PersonIndebtedness, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: for (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowings in the ordinary course of business consistent with past practice that does not materially increase under the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofExisting Credit Agreement, (B) grant guarantees or provide credit support provided by the Company or any transaction or retention bonuses to any director, officer, employee or other service provider of its Subsidiaries of the obligations of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except Subsidiaries in the ordinary course of business consistent to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except clause (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 ofthis Section 6.01(b)(vii), 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 any Indebtedness solely among the Company and its wholly wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(viii) other than in accordance with the Company’s capital expenditure budget made available to Parent, (D) (1) incur or commit to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security any capital expenditure or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programsexpenditures, in each case issuedany period, made or entered into except capital expenditures in an amount not exceeding in the aggregate 120% of the amount included in such budget;
(ix) other than in the ordinary course of business consistent with past practice, (EA) commercial paper issued 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 5.01(k)(i)(N) or Section 5.01(k)(i)(O) shall be entered into without the ordinary course prior written consent of business consistent with past practice Parent, or (B) amend, modify or waive in any material respect or terminate any Material Contract in a principal 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 not to exceed in excess of $250,000,000 1 million individually or $5 million in the aggregate at other than (A) any time outstandingsettlement 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 (For the notes thereto) Indebtednessof 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 proceeds settlement or compromise of which will be used to finance all such Action does not (x) impose any material restriction on the business 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations operations of the Company or any of its Subsidiaries with respect (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 such Indebtedness 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 Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect Licensed Intellectual Property) except (A) pursuant to existing contracts or commitments (or refinancings thereof), (GB) 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 transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (BC) in the ordinary course of business consistent with past practice and in no event in an amount exceeding $1 million individually or $5 million in the aggregate not aggregate;
(xiii) except for such actions required by the terms of Benefit Plans as in excess effect on the date hereof: (A) increase the compensation or other benefits payable or provided to any Service Providers other than increases in base salary in the ordinary course of 120% business for Service Providers with base salary of less than $300,000; (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, equity or equity-based, change of control, severance or retention award to any Service Provider; (D) establish, adopt, enter into terminate or amend (x) in any respect any Collective Bargaining Agreement or (y) 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 amounts reflected 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 (x) hiring to replace departed employees or (y) terminations for “cause” (as determined in the Company’s capital expenditure budget for each of 2017reasonable discretion); provided, 2018 however, that the foregoing clauses (A), (B), (C), and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) 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 material Intellectual Property; provided that this clause (viD) shall not restrict the Company or its Subsidiaries from making available to newly hired employees or independent contractors (in the ordinary course of business), plans, agreements, benefits and compensation arrangements (including cash incentive grants, 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 independent contractors in similar positions or for employees or independent contractors with similar levels of responsibility;
(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 the Existing Credit Agreement, except for modifications or amendments to the Existing Credit Agreement that would not (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with impair the production or financing ability of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual PropertyParent to obtain the Debt Financing on the Closing Date, (B) reduce the granting 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 licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per licensematerial respect, (C) sales reduce the ability of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) with respect Subsidiaries 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company make 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 Payments (as defined in the Bridge FacilityExisting 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 (CE) by wholly owned Subsidiaries amend or modify the stated final maturity date of any indebtedness for borrowed money thereunder to the Company or to any other wholly owned Subsidiary be sooner than such maturity date as in effect as 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 fordate hereof, or any options, warrants amend or other rights to acquire, modify any such shares for purposes agreement to reduce the amount of this Section 5.01(b)(viii)the total lending commitments thereunder; implement or announce any permanent plant closings or permanent facility shutdown that would implicate the WARN Act;
(ixxvi) with respect to the Retained Business, 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 spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in of business (A) make, change or revoke any event or material Tax election; (B) $50,000,000 individually change any material Tax accounting period or $200,000,000 in the aggregate in method of Tax accounting, (C) file any yearmaterial amended Tax Return, in each case (D) settle or compromise any material claim related to acquire any businessTaxes, 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 its Retained Subsidiaries shall E) enter into any such transaction that wouldmaterial closing agreement or (F) surrender any right to claim a material Tax refund, offset or would reasonably be expected toother reduction in liability; or
(xvii) agree, prevent, materially delay authorize or materially impair the consummation commit to do any of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Convey Health Solutions Holdings, Inc.), Merger Agreement (Convey Health Solutions Holdings, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and except as (1otherwise expressly contemplated by this Agreement or as set forth in Section 6.1 of the Company Disclosure Letter) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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) associates. Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless i) as otherwise contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) is required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or any Governmental Entity or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend adopt or propose any change in its certificate of incorporation or bylaws by-laws or other applicable governing instruments or other similar organizational documents of any of its Subsidiaries;
(B) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate;
(C) acquire assets outside of the ordinary course of business from any other Person or with a value or purchase price in the aggregate in excess of $5 million in any transaction or series of related transactions;
(D) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments to (1) the governing documents issuance of any Shares upon the exercise of Company Options set forth in Section 5.1(b)(i) of the Company Disclosure Letter in accordance with the terms of the Stock Plans or (2) the issuance of shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except securities convertible or exchangeable into or exercisable for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its such capital stock, or any options (including Company Options), warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(except for E) make any loans, advances or capital contributions to or investments in any Person (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $4 million in the aggregate;
(F) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends or other distributions by any direct or indirect wholly owned Subsidiary of to the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) any wholly owned Subsidiary of the Company Disclosure Letter), (DCompany) or enter into any agreement with respect to the voting of its capital stock;
(G) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding acquisition of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, any Shares tendered by Employees in each case in accordance with past practice and connection with the terms exercise of Company Options set forth in Section 5.1(b)(ii) of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement Disclosure Letter in accordance with the terms of this Agreementthe Stock Plans);
(H) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other than a wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except for borrowings and letter of credits issued under the Company’s existing revolving credit facility set forth in Section 5.1(b)(ii) of the Company Disclosure Letter;
(I) except as set forth in the ordinary course capital budgets set forth in Section 6.1(a)(I) of business consistent with past practice 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 accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(1K) employees below the level of Executive Vice President and (2) employees at settle, release, waive or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationcompromise any pending or threatened suit, bonus action, claim, arbitration, investigation or pension, welfare litigation or other benefits prior to proceedings (i) for an amount in excess of $1 million or any obligation or liability of the Company in excess of such change, amount (Dii) increase entailing obligations that would impose any material restrictions on the severance business or termination payments or benefits payable to any director, officer, employee or other service provider operations of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined Subsidiaries or (Giii) forgive that is brought by any loans to directorscurrent, officers former or employees purported holder of any capital stock or debt securities of the Company or any of its SubsidiariesSubsidiaries relating to the transactions contemplated by this Agreement;
(ivL) incur make or change any Indebtedness material Tax election or issue tax accounting method, settle or compromise any warrants or material Tax liability 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 or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes other than ordinary course state and local Tax inquiries;
(M) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or otherwise dispose of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstandingassets, (F) Indebtedness, the proceeds of which will be used to finance all product lines 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations businesses of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, includingother than inventory, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof supplies 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 other assets in the ordinary course of business consistent with past practice;
(vN) with respect except as expressly contemplated by this Agreement, required pursuant to Benefit Plans in effect prior to the Retained Businessdate of this Agreement and listed on the Company’s Disclosure Letter, or as otherwise required by applicable Law, (1) grant or provide for any severance or termination payments or benefits to any director or officer of the Company (the “Elected Officers”) or Employee, except, in the case of employees who are not Elected Officers, in the ordinary course of business consistent with past practice, (2) increase the compensation, perquisites or benefits payable to any 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 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 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 (5) terminate or materially amend any existing, or adopt any new, Benefit Plan (other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) changes made in the ordinary course of business consistent with past practice and or as may be necessary to comply with applicable Laws, in either case that do not materially increase the aggregate not in excess costs of 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 Letterany such Benefit Plans);
(viO) with respect to the Retained Businessexcept as required by applicable Laws, transferenter into, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon amend or otherwise dispose of extend any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses collective bargaining agreement or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreementslabor agreement;
(viiP) with respect except to the Retained Businessextent 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), transfertake any action to render inapplicable, leaseor to exempt any third party from, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon any standstill arrangements or otherwise dispose the provisions of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained SubsidiariesTakeover Statutes;
(viiiQ) except with respect to SpinCo and the SpinCo Subsidiariesenter into, issueamend, deliver, sell, grant, transfer, cancel or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, modify any shares of its capital stock Material Contract or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding Contract that would be a Material Contract if in effect on the date of this Agreement in accordance with Agreement;
(R) cancel any debts or waive any claims or rights of substantial value (including the existing terms cancellation, compromise, release or assignment of such awards and the Company Stock Plansany indebtedness owed to, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to claims held by, the Company or to any other wholly owned Subsidiary of the Company; provided thatits Subsidiaries), except for the avoidance of doubt, granting customary profit participation rights cancellations made 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);
(ix) waivers granted with respect to the Retained Business, claims 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 spend in excess of (A) $25,000,000 if the transaction is not indebtedness in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 of business consistent with past practice which, in the aggregate aggregate, are not material or for claims other than indebtedness which are cancelled or waived 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 connection with the settlement of the date of actions referred to in, and to the agreement for such acquisition); provided that neither extent permitted by, clause (K) above;
(S) fail to maintain in full force and effect the material insurance policies covering the Company nor any of and its Retained Subsidiaries shall and their respective properties, assets and businesses in a form and amount consistent with past practices;
(T) enter into any such transaction 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 wouldcould reasonably be expected to (i) require the Company to establish a financial assurance exceeding $1 million or (ii) otherwise result in investigation or remediation liabilities of the Company exceeding $1 million in the aggregate; or
(U) except as provided in Section 6.2 and Section 8.3(a), agree, authorize or commit to do any of the foregoing 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, prevent, materially delay or materially impair the consummation of the Transactions;to result in a Company Material Adverse Effect.
(xb) other than capital expenditures made The Company shall consult with Parent reasonably in accordance 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 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 Parent in connection therewith.
(c) The Company 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 keep Parent fully informed), keep Parent informed, on a current basis, of any material events, discussions, notices or changes with Section 5.01(b)(v) and other than purchases and licenses respect to any criminal or material regulatory investigation or action involving the Company or any of film and television and production programming (includinits Subsidiaries.
Appears in 2 contracts
Sources: Merger Agreement (ReAble Therapeutics Finance LLC), Merger Agreement (Djo Inc)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries thatotherwise (i) required by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1ii) required by applicable Law, (2iii) expressly required approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or as contemplated by the Final Step Planconditioned) or (3iv) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, 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 each of its Subsidiaries to, use its and their reasonable best efforts to conduct preserve their business organizations intact (including the Retained Business 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, and will cause its Subsidiaries not to:
(i) (x) adopt or submit to shareholder approval any change in the articles of incorporation or bylaws of the Company or (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 or delay the consummation of the Merger or the other transactions contemplated by this Agreement;
(ii) (x) merge or consolidate the Company or any of its Subsidiaries with any other 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, 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 shallDisclosure Schedule, and shall cause each or (D) any other acquisitions for consideration that are not in excess of $5,000,000 in the aggregate;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Lien against, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company or any of its Subsidiaries toSubsidiaries, solely or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to the extent related to the Retained Businessacquire any shares of such capital stock or such convertible or exchangeable securities, subject to compliance with the specific matters set forth belowin each case, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business other than (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersA) and keep available the services of any such transaction among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries that would not be adverse to Parent or any of its Subsidiaries’ present employees and agents.
, or (bB) Without limiting any issuance, sale, grant or transfer of Shares pursuant to (1) the generality of, and in furtherance of, exercise or settlement of Company Options or Company RSU Awards outstanding as of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and date of this Agreement or granted after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve not in writing, which approval shall not be unreasonably withheld, conditioned violation of this Agreement or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents grant of Company Restricted Share Awards after the date of this Agreement not in violation of this Agreement;
(including in connection with the Separation and the Distributionv) make any loans, advances or capital contributions to any Person (3other than (A) otherwise expressly disclosed in Section 5.01(b) of to the Company Disclosure Letter), the Company shall not and shall not permit or any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)wholly-owned Subsidiaries, (B) split, combine, subdivide or reclassify its outstanding shares of capital stock pursuant to any Contract described in clause (except for any such transaction by a wholly owned subsidiary F) of the Company which remains definition of a wholly owned Subsidiary after consummation of such transaction), “Material Contract,” (C) extensions of credit terms to customers or vendors in the ordinary course of business and (D) customary loans or advances to employees in the ordinary course of business in amounts not to exceed $10,000,000 in the aggregate at any time);
(vi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1A) any dividends or other distributions paid by a direct or indirect wholly any wholly-owned Subsidiary of the Company to another direct the Company or indirect wholly to any other wholly-owned Subsidiary of the Company or and (B) regular quarterly dividends to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) shareholders of the Company Disclosure Letter)by the Company in an amount not to exceed $0.18 per Share, (D) enter into any agreement in each case declared and paid at such times as is consistent with respect historical practice over the most recent fiscal year ended prior to the voting date of its capital stockthis Agreement);
(vii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the 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 wholly such transaction by a wholly-owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not preventbe adverse to Parent or any of its Subsidiaries and (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Options, materially delay Company Restricted Share Awards or materially impair Company RSU Awards or payment of the Transactionsexercise 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);
(iiiviii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishcreate, adoptincur, amend assume, guarantee, endorse, suffer to exist or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent otherwise be liable with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses respect to any directorindebtedness for borrowed money, officer, employee issue or sell any debt securities or warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except (A) indebtedness for borrowed money in an amount not to exceed $10,000,000 in the ordinary course of business consistent with past practice with respect to aggregate that is (1) employees below on terms not materially less favorable in the level of Executive Vice President and aggregate than the Company’s existing indebtedness or (2) employees prepayable at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationany time at par (plus customary floating rate breakage costs, bonus or pension, welfare or other benefits prior to such changeif applicable), (DB) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider guarantees of indebtedness of the Company or any of its wholly-owned Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 indebtedness between or among the Company and/or any of its wholly-owned Subsidiaries 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 financing 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 accounts payable in the ordinary course of business consistent with past practice;
(vix) other than 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, 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) amend or modify in 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 of its Subsidiaries) or terminate any Material Contract, other than expirations of any such Contract in accordance with its terms; provided, however, that 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, except, in each case, as would not be adverse to Parent or any of its Subsidiaries following the Effective Time other than in any de minimis respect;
(xi) 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 Retained BusinessFinancial Accounting Standards Board or any similar organization);
(xii) settle any action, suit, claim, hearing, arbitration, investigation or other 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 obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Authority that would restrict the future activity or conduct of Parent, the Company or any of 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 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 Reports filed prior to the date of this Agreement for an amount not in excess of the amount so reflected or reserved;
(A) make or change any material Tax election, other than consistent with past practice, (B) change any entity classification for federal income tax purposes of any material Subsidiary, (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 aggregate, other than with respect to acquisitions settlements or compromises of businessesany Tax claim for an amount that does not exceed the amount disclosed, which is subject reflected or reserved in accordance with U.S. GAAP in the Company Reports filed prior to Section 5.01(b)(ix)the date of this Agreement, and (G) 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 with respect to film and television production and programming (including sports rights) with third parties or video game productionin the ordinary course of business, which is subject to Section 5.01(b)(x), make or commit consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(xiv) transfer, sell, lease, license, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Lien upon, any assets of the Company or any of its Subsidiaries, including capital expenditures other than (A) in connection with the repair or replacement stock of facilitiesany of its Subsidiaries, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) except for sales in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the Company obsolete assets 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with having a fair market value not in excess of $50,000,000 1,000,000 individually if the transaction is not or $10,000,000 in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiariesaggregate;
(viiixv) 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, as required by any shares Benefit Plan in effect as of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement or adopted or entered into in accordance with the existing terms of such awards and the Company Stock Plansthis 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) Investment Preferred Stock increase in any manner the compensation, benefits, severance or termination pay of any of the current or former (as defined x) directors, (y) executive officers or (z) employees or consultants who are natural persons of the Company or its Subsidiaries with target total annual cash compensation opportunities (i.e., base pay or base rate and short term cash incentive target amounts) in the Bridge Facility) or excess of $300,000; (C) by wholly owned Subsidiaries to increase in any manner the compensation, benefits, severance or termination pay of any employees or consultants who are natural persons of the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights its Subsidiaries with target total annual cash compensation opportunities at 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);
(ix) with respect to the Retained Businessbelow $300,000, 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 spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 of business consistent with past practice; provided, that (x) any such increase in any event bonus or incentive payment corresponds to a routine annual salary or base pay increase implemented in the ordinary course of business consistent with past practice or (By) $50,000,000 individually any such bonus (or $200,000,000 increase in bonus) or similar incentive payment is awarded in recognition of the recipient’s performance in the aggregate 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 yearother 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 (provided, that, in each case case, such arrangement is in all material respects in the form that has been provided 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 Parent as of the date of this Agreement) and for separation agreements entered into with terminated employees who are not executive officers in the agreement for such acquisitionordinary course of business consistent with past practice); provided that neither (G) take any action to accelerate the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldpayment of, or would reasonably be expected toto fund or secure the payment, prevent, materially delay or materially impair the consummation of the Transactions;
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, (y) executive officer or (z) employee who, upon commencement of employment would be designated as a “Level 8” employee or 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 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; (I) promote any executive officer of the Company or promote any employee to an executive officer position; (J) become a party to, establish, adopt, materially amend, commence participation in or terminate any collective bargaining agreement or other than capital expenditures made agreement with a labor union, works council or similar organization; or (K) terminate without cause the employment of any executive officer of the Company; or
(xvi) agree, authorize or commit to do any of the foregoing.
(c) After the date of this Agreement and prior to the Effective Time, Parent and its Subsidiaries shall 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 (y) enter into an agreement, arrangement or understanding to acquire control of a third party in accordance with Section 5.01(b)(vNorth America that is in the grocery industry and operates physical retail stores if (i) and other than purchases and licenses such acquisition of film and television and production programming control or (includinii) entr
Appears in 2 contracts
Sources: Merger Agreement, Merger Agreement (Amazon Com Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) otherwise 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 disclosed in Section 5.01(a) of the Company Disclosure Letterthis Agreement), the Company shall, business of it and shall cause each of its Subsidiaries to, shall be conducted in the ordinary and usual course and it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly required by this Agreement, (B) as Parent shall otherwise may approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable Law, (2) expressly required contemplated by the Transaction Documents (including IP Group Sale and Trust Distribution as described in connection with the Separation and the Distribution) term sheet attached hereto as Exhibit B or (3D) otherwise as expressly disclosed in set forth on Section 5.01(b5.1(a) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (organizational documents, except for (1) any dividends or distributions paid as specifically required by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing changes or restrictions on its assets, operations or businesses;
(iii) acquire from 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, in any transaction or series of related transactions;
(iv) issue, sell, pledge, dispose of, grant, transfer, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than transactions the issuance of the type contemplated shares 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 to the Company or a wholly owned Subsidiary is of the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongCompany), or the restructuringsecurities convertible or exchangeable into or exercisable for any shares of such capital stock, reorganization or liquidation ofany options, warrants or other rights of any wholly owned Subsidiaries 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 that would not prevent, materially delay or materially impair any of its Subsidiaries having a value in excess of $25,000 individually or $100,000 in the Transactions)aggregate;
(iiivi) except as expressly required by make any Company Plan as loans, advances, guarantees or capital contributions to or investments in effect on the date hereof: any Person (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than the Company or any such action taken for purposes direct or indirect wholly owned Subsidiary of replacingthe Company), renewing or extending a broadly applicable material Company Plan except in the ordinary course of business consistent with past practice that does not materially increase and in no event in excess of $10,000 individually or $25,000 in the cost aggregate;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofits capital stock, (Bexcept for dividends paid by any direct or indirect Subsidiary of the Company to its stockholders or unit-holders on a pro rata basis in the ordinary course of business consistent with past practices) grant or provide enter into any transaction agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or retention bonuses to redeem, purchase or otherwise acquire, directly or indirectly, any directorof its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, officer, employee or issue or sell any debt securities or warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past 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 of the date of such replacement, or (B) in connection with guarantees by the Company of indebtedness of wholly owned Subsidiaries of the Company as of the Effective Time complying with clause (A) above;
(x) enter into any Contract that would have been a Material Contract had it been entered into prior to this 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 (y) 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 and in the aggregate in any event not in excess of $100,000;
(xvii) 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, consistent with past practice;
(xix) except as required pursuant to a Benefit Plan or existing written, binding agreements as in effect as of the date of this Agreement, or as otherwise required by applicable Law, (A) grant new or increase the existing compensation, bonus or pension, welfare severance or other benefits of payable or to become payable to any director, officer or employee of the Company or any of its Subsidiaries, except (B) adopt, enter into, establish, or materially amend, modify or terminate any Benefit Plan or any arrangement that would constitute a Benefit Plan had it been in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider effect as of the Company date of this Agreement or any of its Subsidiaries, (EC) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 expressly required by any such refinancing Benefit Plan or replacement Indebtednessprovided in this Agreement; 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;or
(vxx) with respect to the Retained Businessagree, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Straight Path Communications Inc.), Merger Agreement (Straight Path Communications Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time Time, except (unless A) as required by applicable Law, (B) as otherwise contemplated, required or permitted by this Agreement, (C) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed) or (D) as set forth in Section 7.1 of the Company Disclosure Letter, from the date of this Agreement and prior to the Effective Time, the business of the Company and its Subsidiaries shall be conducted in the ordinary course of business in all material respects consistent with past practice and it and its Subsidiaries shall use their respective commercially reasonable efforts to (i) preserve their business organizations intact, (ii) maintain existing relations with Governmental Entities, customers and suppliers, including Parent, (iii) notify Parent promptly (x) after receipt of any material communication from any Governmental Entity or inspections of any manufacturing, research and development or clinical trial site and before giving any material submission to a Governmental Entity and (y) prior to making any material change to a study protocol, adding new trials, making any material change to a manufacturing plan or process, or making a material change to the development timeline for any of its product candidates or programs, (iv) preserve intact and keep available the services of present employees, consultants, independent contractors and executive officers of the Company and its Subsidiaries, (v) keep in effect casualty, product liability, workers’ compensation and other insurance policies in coverage amounts substantially similar to those in effect at the date of this Agreement, (vi) preserve and protect all Registered Intellectual Property listed in the Orange Book with respect to Dificid (fidaxomicin), and which determination shall take into account (vii) preserve and protect the material Intellectual Property (other than the Registered Intellectual Property listed in the Orange Book) owned by the Company Overview Presentationand its Subsidiaries, except in the case of clause (vii) in the ordinary course of business. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide as otherwise required or reclassify its outstanding shares of capital stock (except for any such transaction expressly permitted by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)this Agreement, (C) declare, set aside or pay any dividend or distribution payable as Parent may approve in cash, stock or property writing (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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 approval not to be an issuanceunreasonably withheld, sale conditioned 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);
(ixdelayed) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinor
Appears in 2 contracts
Sources: Merger Agreement (Optimer Pharmaceuticals Inc), Merger Agreement (Cubist Pharmaceuticals Inc)
Interim Operations. (a) The Company ICE and NYBOT each covenants and agrees as to itself and its Subsidiaries that, from and after the execution date hereof and until the earlier of the Effective Time or the termination of this Agreement and prior to the First Effective Time in accordance with its terms (unless Parent ICE (in the case of NYBOT) or NYBOT (in the case of ICE) shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) otherwise expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by this Agreement or, in the Final Step Plan) or (3) case of NYBOT, except as otherwise expressly disclosed set forth in Section 5.01(a) 6.1 of the Company NYBOT Disclosure Letter or, in the case of ICE, except as otherwise set forth in Section 6.1 of the ICE Disclosure Letter), ):
(a) the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct preserve its business organization intact and maintain its existing relations and goodwill with all Governmental Entities, Self-Regulatory Organizations, providers of order flow, customers, suppliers, distributors, creditors, lessors, Employees, business associates, Members and stockholders, as appropriate;
(b) it shall not declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any Membership Interests or capital stock, as appropriate, other than, in the Retained Business case of ICE, dividends payable by direct or indirect wholly owned Subsidiaries of ICE to ICE or other direct or indirect wholly owned Subsidiaries of ICE and, in the case of NYBOT, dividends payable by direct or indirect wholly owned Subsidiaries of NYBOT to NYBOT or other direct or indirect wholly owned Subsidiaries of NYBOT; Table of Contents
(c) in the case of NYBOT, neither it nor its Subsidiaries shall:
(i) issue any new Membership Interests, other membership interests, capital stock or any securities convertible into or exchangeable or exercisable for any membership interests or shares of capital stock, Trading Rights, other trading permits or trading rights, or any lease rights;
(ii) sell, pledge, dispose of or encumber, split, combine or reclassify, or repurchase, redeem or acquire any outstanding Membership Interests, other membership interests, capital stock or any securities convertible into or exchangeable or exercisable for any membership interests or shares of capital stock, Permits, Trading Rights, other trading permits or trading rights, or any lease rights;
(iii) make any structural changes to NYBOT Clearing Corporation, agree to (other than in the ordinary course of business) list or clear any additional products or markets, change its risk policies or reduce its guaranty fund, liquidity or credit resources;
(iv) except as required by applicable Law or as set forth on Section 6.1(c)(iv) of the NYBOT Disclosure Letter, (A) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any NYBOT Benefit Plan, as the case may be, or any other arrangement that would be a NYBOT Benefit Plan if in effect on the date hereof, or (B) increase the salary, wage, bonus, pension, welfare, severance or other compensation of any employees or fringe benefits of any director, officer or employee or enter into any contract, agreement, commitment or arrangement to do any of the foregoing, except increases occurring in the ordinary and usual course of business consistent with past practice, and or (C) provide for the Company shallgrant of any stock option, and shall cause each restricted stock, restricted stock unit or other equity-related award, or (D) pay any change of its Subsidiaries to, solely control or severance benefits to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned any NYBOT director or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including Employee in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stockMerger, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide for any transaction severance, change in control or retention bonuses termination payments or benefits to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company NYBOT or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment payment, or fund or in any way secure the payment, of compensation or benefits under any Company Plan (including NYBOT Benefit Plan, to the extent not already provided in the any equity-based awards)such NYBOT Benefit Plan, or (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP, or (G) forgive establish, adopt, enter into or amend any loans to directorscollective bargaining agreement or (H) terminate any officer, officers or employees other than for cause, in which case NYBOT shall promptly notify ICE of the Company or any of its Subsidiariessuch termination;
(ivv) 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 usual 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 settle or compromise any time outstandingmaterial claims or litigation or modify, (F) Indebtedness, the proceeds of which will be used to finance all amend 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or terminate any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiariesmaterial Contracts or waive, including, following the Distribution, the Retained Subsidiaries, shall not have release or assign any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings material rights 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 Letterclaims;
(vi) with respect to other than in the Retained Businessordinary and usual course of business, transfer, lease, license, guarantee, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of or encumber any other material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 property or assets (including membership interests or capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(viSubsidiaries)), except for ;
(Avii) sales, leases, licenses incur additional material indebtedness or other dispositions of liability or modify any properties material indebtedness or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not other liability or modify any material indebtedness or other liability other than in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiariesof business;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, make or authorize or commit to any capital expenditures (other than under its current business plan as disclosed to ICE prior to the issuancedate of this Agreement), delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants acquisitions or other rights types of non-ordinary-course transactions;
(ix) except for a platform license and service agreement with ICE, which shall provide that ICE shall license ICE’s electronic trading platform to acquire, any such shares, except (A) NYBOT for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units a minimum period of 18 months from and Company Deferred Stock Units outstanding on after the date of this Agreement and that the costs of operation shall not exceed $3 million per year, and which shall contain such other commercially reasonable terms as mutually agreed by ICE and NYBOT as soon as reasonably practicable after the date of this Agreement (and in any event within 45 days after the date of this Agreement) (the “Platform License Agreement”), enter into any agreement to trade any products on an Table of Contents electronic trading platform or that would restrict NYBOT’s or its Subsidiaries’ ability to trade any product on an electronic trading platform; provided, however, if ICE and NYBOT are not able to reach agreement on the terms of the Platform License Agreement in accordance with the existing terms foregoing, NYBOT may, at its own expense, license an electronic trading platform from an alternate system vendor, provided that (A) such license agreement is terminable by NYBOT as of such awards the Closing and the Company Stock Plans, (B) Investment Preferred Stock all costs associated with such license agreement from and after the Closing shall be deducted from the calculation of the Closing Cash Amount;
(x) change any material Tax election, change any material method of Tax accounting, file any materially amended Tax Return, or settle or compromise any material audit or proceeding relating to Taxes 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;
(xi) permit any change in its credit practices or accounting principles, policies or practice (including any of its practices with respect to accounts receivable or accounts payable), except to the extent that any such changes in accounting principles, policies or practices shall be required by changes in GAAP;
(xii) enter into any “non-compete” or similar Contract that would restrict the business of the Surviving Corporation or any of its Affiliates following the Effective Time;
(xiii) except as permitted pursuant to Section 6.1(c)(iv) of the NYBOT Disclosure Letter, enter into any Contract between itself, on the one hand, or any of its Affiliates, employees, officers or directors, on the other hand;
(xiv) (A) amend or modify any of the NYBOT Organizational Documents or the NYBOT Subsidiary Organizational Documents, except for rule amendments or modifications that are consistent with past practice, that are not material and that would not become Core Rights (as defined in the Bridge FacilityBylaws) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 file with the CFTC any notice of such amendment or $200,000,000 in the aggregate in any year, in each case modification unless it shall simultaneously provide a written copy of such application to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise ICE; and
(valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that xv) neither the Company NYBOT nor any of its Retained Subsidiaries shall will authorize or enter into an agreement to do any of the foregoing set forth in Sections 6.1(c)(i) – (xiv) if NYBOT would be prohibited by the terms of Sections 6.1(c)(i) – (xiv) from doing the foregoing. Notwithstanding anything to the contrary in this Agreement, ICE shall have the right to agree to and to consummate any acquisitions of another Person, including by agreeing to issue equity interests in ICE to such Person.
(d) In the case of NYBOT, it shall, and shall cause its Subsidiaries to, preserve their respective existing regulatory status in all jurisdictions, and shall not make any material change to their respective regulatory status in any jurisdiction.
(e) Prior to making any written or oral communications to the directors, officers or employees of NYBOT or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, NYBOT shall provide ICE with a copy of the intended communication, ICE shall have a reasonable period of time to review and comment on the communication, and ICE and NYBOT shall cooperate in providing any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinmutually agreeable communication
Appears in 2 contracts
Sources: Merger Agreement (Intercontinentalexchange Inc), Merger Agreement (Intercontinentalexchange Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after After the execution date of this Agreement and prior to the First earlier of the Effective Time and the termination of this Agreement in accordance with its terms, except (unless i) as Parent shall otherwise approve in writing, which approval shall consent (such consent not to be unreasonably withheld, delayed or conditioned and such consent to be deemed given if Parent provides no written response within 3 business days after a written request by the Company for such consent) or delayedrequest, and except (ii) as otherwise expressly contemplated by this Agreement, (1iii) as required by applicable LawLaws, (2iv) 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 disclosed set forth in Section 5.01(a) 5.1 of the Company Disclosure LetterLetter or (v) as necessary to comply with the express obligations of any Company Material Contract in effect on the date hereof (the exceptions described in the foregoing clauses (i) through (v), each, a “General Exception”), the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to conduct the Retained Business its and its Subsidiaries’ business in the ordinary course of business consistent with past practice, and and, to the Company extent consistent therewith, it shall, and it shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use its and their respective commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entitiestheir business organizations; provided, customersthat, suppliers, distributors, licensors, creditors, lessors, employees and business 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 no action by the Company and or any of its Subsidiaries’ present employees and agentsSubsidiaries with respect to matters specifically addressed by any provision of Section 5.1(b) shall be deemed a breach of Section 5.1 unless such action or omission would constitute a breach of such provision of Section 5.1(b).
(b) Without limiting the generality of, of and in furtherance of, of the foregoing, foregoing but subject to the Company covenants and agrees as to itself and its Subsidiaries thatproviso in Section 5.1(a), from and after the date of this Agreement and prior to until the First earlier of the 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed termination of this Agreement in Section 5.01(b) of the Company Disclosure Letter)accordance with its terms, except pursuant to a General Exception, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its Company’s or any Subsidiary’s certificate of incorporation or bylaws (or comparable governing documents;
(ii) (merge or consolidate itself or any of its Subsidiaries with any other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock Person (except for any such transaction by a among its wholly owned subsidiary subsidiaries), restructure, reorganize or completely or partially liquidate;
(iii) other than (A) in connection with the exercise, vesting or settlement of Company Equity Awards outstanding as of the date hereof and in accordance with the terms thereof (including sales of Shares in order to satisfy tax withholding obligations) or (B) as disclosed in Section 5.1(b)(iii) of the Company which remains a wholly Disclosure Letter, issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance by it or any of its Subsidiaries of, any shares of its capital stock or of any its Subsidiaries (other than the issuance of shares by its wholly-owned Subsidiary after consummation to it or another of its wholly-owned Subsidiaries), or securities convertible or exchangeable into or exercisable for any shares of such transaction)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;
(Civ) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another it or to any other direct or indirect wholly wholly-owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(v) other than (A) acquisitions of Shares tendered by holders of Company Equity Awards outstanding as of the date hereof and in accordance with the terms thereof, in order to satisfy obligations to pay the exercise price and/or tax withholding obligation with respect thereto, and (B) the acquisition by the Company of Shares in connection with the forfeiture of Company Equity Awards, reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its the Company’s capital stock or any securities convertible or exchangeable into or exercisable for any shares of the Company’s capital stock;
(vi) (A) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or of any of its capital stock Subsidiaries, except for (other than x) (1) pursuant to indebtedness incurred in the forfeiture of, or withholding ordinary course 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 business under its credit agreements and with the terms of the Company Stock Plans facilities as in effect on the date of this Agreement (or as modified after Agreement, including under the date of this Agreement in accordance with the terms of this Agreement) Sub Debt Facility or (2) purchasesas necessary to operate the business in the ordinary course of business consistent with past practices, repurchasesor (y) interest rate swaps on customary commercial terms, redemptions (B) except for credit default protection provided in connection with services and products in the ordinary course of business consistent with past practice, enter into any “keep well” or other acquisitions of securities Contract to maintain any financial statement condition of any wholly owned Subsidiary other Person (other than any of its Subsidiaries) or (C) enter into any arrangement having the economic effect of any of the Company by the Company foregoing clause (A) or any other wholly owned Subsidiary of the Company(B);
(iivii) merge except as may be required by GAAP or consolidate with any other Personapplicable accounting standard (including the Current Expected Credit Loss accounting standard), make any material changes with respect to accounting policies or procedures;
(viii) other than in the ordinary course of business, (A) settle or compromise any material Tax claim, audit, or restructure, reorganize or completely or partially liquidate (other than transactions assessment for an amount materially in excess of the type contemplated by Section 5.01(b)(viiamount reserved or accrued on the Audited Company Balance Sheet (or most recent consolidated balance sheet included in the Company Reports), (B) make, change or revoke any material Tax election, material method of Tax accounting or any annual Tax accounting period, (C) amend any material Tax Returns or file claims for material Tax refunds, or (D) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(ix) transfer, sell, lease, exclusively license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse (except with respect to patents expiring in accordance with their terms) or Section 5.01(b)(ixexpire or otherwise dispose of any of its material assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries, except (A) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement services and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan products provided in the ordinary course of business consistent with past practice that does not materially increase the cost and sales of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofobsolete assets, (B) grant incurrence of Permitted Liens, (C) for assets with a fair market value not in excess of $350,000 in the aggregate, in the ordinary course of business consistent with past practice, or provide (D) pursuant to Contracts in effect prior to the date of this Agreement;
(x) other than (A) as set forth on Section 5.1(b)(x) of the Company Disclosure Letter, or (B) as required by any transaction Company Benefit Plan in effect on the date of this Agreement, (1) materially increase any compensation or retention bonuses benefit provided or to be provided to any director, officer, current or former employee or other service provider of the Company or any of its Subsidiaries, (C2) increase the compensation, bonus enter into or pension, adopt any new Company Benefit Plan or amend in any material respect or terminate any Company Benefit Plan except for routine amendments or renewals of health and welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except plans in the ordinary course of business consistent with past practice practice, or (3) accelerate the funding or vesting of any material compensation or benefit;
(xi) except in connection with respect services and products provided in the ordinary course of business consistent with past practices or pursuant to (1) employees below Contracts, copies of which shall be publicly filed with the level of Executive Vice President and (2) employees at SEC or above the level of Executive Vice President shall have been provided to Parent, in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits effect prior to such changethe date of this Agreement, (DA) increase the severance acquire, by merger, consolidation, acquisition of stock or termination payments assets, or benefits payable to otherwise, any director, officer, employee business or other service provider of the Company Person or any division thereof or (B) except in favor of its Subsidiaries, (E) take make any action to accelerate the vesting loans, advances, or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which capital contributions to such plans are made or investments in any Person (other than advances of expenses to employees in the basis on which such contributions are determined or (G) forgive any ordinary course of business and loans and other credit products to directors, officers or employees of and for the Company or any of its SubsidiariesCompany’s commercial counterparties);
(ivxii) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except than (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 as permitted under Section 5.1(b)(iii), 5.1(b)(v) or 5.1(b)(x), enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to the Bridge Facilitymaterial real property or any other Contract or Lease that, if 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 effect as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after of the date hereof would constitute a Company Material Contract or Lease with respect to material real property hereunder;
(xiii) settle or compromise any Action involving the payment 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of monetary damages by the Company or any of its Subsidiaries with respect to such Indebtedness of any amount exceeding $350,000 in the aggregate (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have including any obligations in respect thereofamounts payable or reimbursable by insurance), (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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with any Action brought against or by Parent, Merger Sub, Sponsor or any of their respective Affiliates and Financing Sources arising out of a breach or alleged breach of this Agreement, the repair Confidentiality Agreement, the Equity Commitment Letter or replacement of facilitiesthe Limited Guarantee, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or and (B) the settlement of claims, liabilities, or obligations specifically reserved against on the Audited Company Balance Sheet (or most recent consolidated balance sheet included in the ordinary course of business consistent with past practice and Company Reports) in the aggregate an amount not in excess of 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) specific reserve with respect to the Retained Businesssuch claim, transferliability or obligation; provided, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall settle or agree to settle any Action which settlement involves a conduct remedy or injunctive or similar relief that has a material restrictive impact on the Company’s business;
(xiv) enter into any such transaction that wouldmaterial agreement, agreement in principle, letter of intent, memorandum of understanding, or would reasonably be expected tosimilar Contract, preventin each case with respect to any joint venture, materially delay strategic partnership, or materially impair the consummation alliance (excluding, for avoidance of the Transactionsdoubt, strategic relationships not involving equity, alliances, reseller agreements, and relationships that are commercial in nature);
(xxv) other than capital expenditures made terminate or modify in accordance any material respect, or fail to exercise renewal rights with Section 5.01(b)(vrespect to, any material insurance policy except in the ordinary course of business or if such material insurance policy is replaced by a substantially comparable policy; or
(xvi) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time in violation of applicable Law. Prior to the Effective Time, the Company shall exercise, consistent with the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiaries’ operations.
Appears in 2 contracts
Sources: Merger Agreement (Elevate Credit, Inc.), Merger Agreement (Elevate Credit, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned), and except as (1) required by applicable Law, (2) 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 disclosed set forth in Section 5.01(a) 6.1 of the Company Disclosure Letter)) and except as required by applicable Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly provided in this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Lawconditioned), (2C) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter)Letter or (D) as required by applicable Laws, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 by-laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or 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 otherwise enter into any agreements or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongarrangements imposing material changes or restrictions on its assets, operations or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in excess of $1 million in the aggregate, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary and as permitted by Section 6.1(a)(vii)), 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, in each case, (A) the issuance of Shares upon conversion of the Debentures, (B) the issuance of Shares pursuant to Company Awards, including upon exercise thereof and (C) the issuance of Shares in connection with “cashless” or “net settled” exercises of Company Awards);
(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 (other than the exclusions set forth in clauses (A), (B), (C) and (F) of the definition of Encumbrance);
(vi) make any loans, advances, guarantees (other than guarantees of service granted in the ordinary course of business) 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 $500,000 in the aggregate during any 12-month period;
(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 capital stock (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary or regular quarterly dividends not to exceed $0.055 per share payable in cash, declared and paid consistent with prior timing) or enter into any agreement with respect to the voting of its capital stock;
(viii) 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;
(ix) incur any indebtedness for borrowed money 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 incurred in the ordinary course of business consistent with past practices, provided that the aggregate amount of outstanding indebtedness for borrowed money will not exceed $60 million at any one time or (B) interest rate swaps on customary commercial terms consistent with past practice and in compliance with the Company’s risk management policies in effect on the date of this Agreement and not to exceed $500,000 of notional debt in the aggregate;
(x) except as expressly set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $1 million in the aggregate during any 12-month period;
(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 or (B) is not terminable without liability within one year of the date of this Agreement and involves payment or receipt by the Company and its Subsidiaries of more than $5 million over the entire term of such Contract, except in the case of each of (A) and (B), for customer, vendor or technology licensing Contracts entered into in the ordinary course of business consistent with past practice that do not contain any of the provisions referred to in Section 5.1(j)(i)(D) and, in the case of vendor and technology licensing Contracts, do not have a term of longer than twelve (12) months;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles;
(xiii) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $250,000 or any obligation or liability of the Company Plan in excess of such amount;
(xiv) (A) amend or modify any Material Contract in any material respect or in a manner adverse to the Company or its Subsidiaries, (B) terminate any Material Contract or (C) cancel, modify or waive any debts or claims held by it or waive any rights in each case other than in the ordinary course of business and having a value in excess of $250,000;
(xv) make any material Tax election, settle any material Tax claim or change any material method of Tax accounting;
(xvi) (A) grant, extend, amend (except as required in the diligent prosecution of the Intellectual Property), waive or modify any material rights in or to, nor sell, assign, lease, license, let lapse, abandon or cancel, or extend or exercise any option to sell, assign, lease or license, any material Intellectual Property, in each case, other than in the ordinary course of business, (B) fail to diligently prosecute the Company’s and its Subsidiaries’ patent and trademark applications or (C) fail to exercise a right of renewal or extension under any material inbound license for material Intellectual Property;
(xvii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or otherwise dispose of any material 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 in connection with services provided in the ordinary course of business or sales of obsolete assets;
(xviii) hire any employee or individual independent contractor with total expected annual compensation, excluding commissions, in excess of $150,000, other than to fill vacancies arising in the ordinary course of business at compensation levels consistent with past practice;
(xix) except as required pursuant to Benefit Plans or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any Employee or any director or officer of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus opportunity or pension, welfare, severance or other benefits of, pay any bonus (other than the 2009 Bonus which may be paid in the ordinary course of business consistent with past practice and in accordance with its terms as in effect on the date hereof: of this Agreement), or make any new equity awards to any Employee or any director or officer of the Company or any of its Subsidiaries, (Aiii) establish, adopt, amend or terminate any material Company Benefit Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofawards, (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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Eiv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Benefit Plan, (Fv) enter into or establish any (1) employment, severance, change in control, termination, deferred compensation or other similar agreement with any Employee or any director or officer of the Company or any of its Subsidiaries or (2) other agreement, program or policy that would otherwise qualify as a material Benefit Plan had it been in place as of the date of this Agreement (it being understood and agreed that such plan, program or policy that cannot be terminated at any time by the Company or after Closing, Parent, without liability in excess of $500,000 in the aggregate is deemed per se material); (vi) change any discount rate assumptions or materially change any other 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 determined, except as may be required by GAAP; or (Gvii) forgive any loans to Employees, directors or officers of the Company;
(xx) knowingly take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Closing set forth in Article VII not being satisfied; or
(xxi) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any written or material broad-based oral communications to the directors, officers or employees of the Company or any of its Subsidiaries;Subsidiaries pertaining to the effect upon employment, compensation or benefit matters that will result as a consequence of 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.
(ivc) incur any Indebtedness or issue any warrants or other rights to acquire any IndebtednessFrom the date of this Agreement until the Effective Time, except (A) as otherwise expressly provided 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 Indebtednessthis Agreement, (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 as the Company and its Subsidiariesmay approve in writing (such approval not to be unreasonably withheld, taken as a whole, than the Indebtedness being replaced conditioned or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednessdelayed), (C) intercompany Indebtedness among as set forth in Section 6.1(c) of the Company and its wholly owned Subsidiaries, Parent Disclosure Letter or (D) (1) to the extent as required by applicable Laws, Parent will not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security knowingly take 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have take any obligations action or omit to take any action that is reasonably likely to result 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 conditions 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 Closing set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) 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 material Intellectual Property; provided that this clause (vi) shall Article VII not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinbeing satisfied.
Appears in 2 contracts
Sources: Merger Agreement (RR Donnelley & Sons Co), Merger Agreement (Bowne & Co Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, denied and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of (i) preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates associates, (ii) make all filings, pay all fees and others having material business dealings with take all other actions necessary and reasonable to protect, preserve and maintain the Retained Business Scheduled Intellectual Property, and (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersiii) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly required by this Agreement, (B) as Parent shall otherwise may approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) denied or (3C) otherwise expressly disclosed as set forth in Section 5.01(b7.1(a) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) adopt or propose any change in its articles of organization or by laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except with respect for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business, other than acquisitions pursuant to SpinCo and Contracts in effect as of the SpinCo date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than in the case of clause (A)), (A) amend its certificate the issuance of incorporation shares pursuant to outstanding stock options, warrants or bylaws rights or (or comparable governing documentsB) (other than amendments to the governing documents of any by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding 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 v) create or incur any such transaction by a wholly owned subsidiary Lien material to the Company or any of its Subsidiaries on any assets (including Intellectual Property) of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its Subsidiaries having a value in excess of $100,000;
(vi) make any loans, advances, guarantees or capital stock contributions to or investments in any Person (except for (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $100,000 in the aggregate;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to the Company any other direct or (2indirect wholly owned Subsidiary or regular quarterly dividends, not to exceed $.07 per share, declared and paid consistent with prior timing) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)stock;
(iiix) merge incur any indebtedness for borrowed money or consolidate with any other guarantee such indebtedness of another Person, or restructure, reorganize issue or completely sell any debt securities 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except for (i) indebtedness for borrowed money at any one time outstanding incurred in the ordinary course of business consistent with past practice with respect practices for working capital incurred pursuant to (1) employees below the level Bank 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 America Credit Facility not to exceed indebtedness as of March 2, 2007 plus $400,000,000 15,000,000, (ii) in the aggregate at any time outstanding on prevailing market terms or replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial to than 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 ofindebtedness being replaced, 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, (Ciii) 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 guarantees incurred in compliance with this Section 7.1 by the hedging strategy Company of indebtedness of wholly-owned Subsidiaries 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 practiceCompany;
(vx) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) except as set forth in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 budgets set forth in Section 5.01(b)(v7.1(a)(x) of the Company Disclosure Letter;
(vi) with respect to the Retained BusinessSchedule and consistent therewith, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon make or otherwise dispose of authorize any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not expenditure in excess of $50,000,000 individually if the transaction is not 1,000,000 in the ordinary course or $100,000,000 individually in aggregate during any event or (B) transactions among the Company and the Retained Subsidiaries12-month period;
(viiixi) except enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xii) make any changes with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, accounting policies or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such sharesprocedures, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement as required by changes in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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)applicable generally accepted accounting principles;
(ixxiii) with respect to the Retained Businessamend, 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 modify or video game productionterminate any Material Contract or Intellectual Property Contract, which is subject to Section 5.01(b)(x)or cancel, spend modify or commit to spend waive any debts or claims held by it or waive any rights in excess of (A) $25,000,000 if the transaction is not 250,000 in the ordinary course and aggregate;
(xiv) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of the amount of any reserve on the balance sheet as of March 2, 2007 as set forth on Section 7.1(a)(xiv) of the Company Disclosure Schedule plus $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 150,000 in the aggregate in or any year, in each case to acquire any business, whether by merger, consolidation, purchase of property obligation or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as liability of the date Company in excess of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactionsamount;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 2 contracts
Sources: Merger Agreement (Stride Rite Corp), Merger Agreement (Payless Shoesource Inc /De/)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries thatotherwise (i) expressly permitted or required by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1ii) required by applicable Law, (2iii) expressly required approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or as contemplated by the Final Step Planconditioned) or (3iv) otherwise expressly disclosed set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, from the date of this Agreement until the Effective Time, the Company shallwill, and shall will cause each of its Subsidiaries to, to conduct their businesses in the ordinary course of business consistent with past practice and use its and their reasonable best efforts to conduct maintain and preserve intact the Retained Business 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, and will cause its Subsidiaries not to:
(i) (x) adopt or propose any change in the Charter or bylaws of the Company or (y) adopt any change in the comparable organizational document of any Subsidiary of the Company;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other 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 Subsidiaries that would be adverse to Parent or any of its Affiliates;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material assets, securities, properties, rights, interests or businesses (other than purchases of supplies, equipment, managed services, cloud services, software or 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, and in an amount greater than $500,000 individually or $2,000,000 in the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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.aggregate;
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cviii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (otherwise, with respect to any Group Securities or consent to any combination thereof) in respect dividend or distribution of any shares of its capital stock each Joint Venture Entity (except for (1) any dividends or other distributions paid by a direct or indirect wholly any wholly-owned Subsidiary of the Company to another direct the Company or indirect wholly to any other wholly-owned Subsidiary of the Company or to the Company pro rata dividends or (2distributions by Joint Venture Entities) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stockGroup Securities or Joint Venture Entity Securities;
(ix) reclassify, split, combine or (E) purchase, repurchase, redeem or otherwise acquire subdivide any shares of its the capital stock of the Company;
(x) create, incur or assume any securities convertible or exchangeable into or exercisable material indebtedness for any shares of its capital stock borrowed money (other than trade payables (1including, for avoidance of doubt, indebtedness associated with the purchase of products or services of the Company) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitsand company credit cards, 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase practice) or guarantee, endorse or otherwise become responsible (whether directly, contingently or otherwise) for any such indebtedness;
(xi) other than facilities or technology capital expenditures in the cost ordinary course of such Company Plan business consistent with past practice, make or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses commit to any directorcapital expenditure or expenditures in an amount greater than $500,000 individually or $2,000,000 in the aggregate;
(xii) enter into any agreement, officer, employee arrangement or other service provider of commitment that materially limits or otherwise restricts the Company or its Subsidiaries from engaging or competing in any line of business or in any geographic area or otherwise enter into any agreements, arrangements or commitments imposing material changes or restrictions on its Subsidiariesassets, (C) increase the compensation, bonus operations or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiariesbusiness, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariespractices;
(ivxiii) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) enter into any Contract that, if in effect on the date hereof, would have been a Material Contract (other than 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 Indebtednesspractices), (B) except with terminate or amend or modify in any material respect to the Bridge Facilityany Material Contract or any Contract that, if in replacement of, or to refinance, existing Indebtedness effect 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 hereof, would have been a Material 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 other than terminations or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into amendments in the ordinary course of business consistent with past practice), (EC) commercial paper issued waive in any material 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 practice practices;
(xiv) materially change the Company’s methods of accounting, except as required by concurrent changes in a principal 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 not to exceed in excess of $250,000,000 500,000 individually or $2,000,000 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 $9,000,000,000aggregate; provided, furtherhowever, that neither the Separation Agreement Company nor any of its Subsidiaries shall provide that SpinCo shall assume settle any Action (regardless of the obligations 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 with respect to such Indebtedness is organized, (and Parent and its SubsidiariesD) file any amended income Tax Return or other material amended Tax Return, including(E) adopt or change any annual Tax accounting period or material accounting method for Taxes, following the Distribution, the Retained Subsidiaries, shall not have (F) settle or compromise any obligations in respect thereof)material Tax claim, (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and surrender any material claim for a refund 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)Taxes, (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings enter into any closing agreement relating to Taxes 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) file any amendment, refinancing income Tax Return or renewal 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 existing revolving and term loan facilities conditions set forth in Article VII (Conditions) not to be satisfied or prevent or materially impede the consummation of the YES Facility and transactions contemplated by this Agreement, except as permitted under Section 6.2;
(xviii) announce, implement or effect any refinancing thereofmaterial reduction in labor force, in each caselay-off, so long as early retirement program, severance program or other program or effort concerning the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy termination of employment of employees of the Company (including any “plant closing” or “mass layoff” as of the date of this Agreement those terms are defined in the ordinary course of business consistent with past practice WARN Act or in connection with any similar action under 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) abovesimilar Law), (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 other than routine employee terminations in the ordinary course of business consistent with past practice;
(vxix) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(xx) except as required by applicable Law or pursuant to the terms of any Benefit Plan as in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule, (A) terminate, adopt, establish, enter into, amend or renew (or communicate any intention to take such action) any 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, (C) 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 awards, or amend or modify the Retained Businessterms of any outstanding awards, under any Benefit Plan, (F) take any action to accelerate the payment, or to fund or secure the payment, of any amounts under any Benefit Plan, (G) forgive any loans or issue any loans (other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) routine travel advances issued in the ordinary course of business consistent business) to any Company employee, (H) hire any employee or consultant who is a natural person with past practice a target total annual cash compensation (e.g., base pay or base rate and in the aggregate not short-term cash incentive target amounts) opportunity in excess of 120% $200,000, (I) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (J) terminate without cause the employment of any executive officer of the amounts reflected in Company; or
(xxi) agree, authorize or commit to do any of the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(vforegoing.
(c) Prior to making any broad-based written or oral communications to the officers or employees of the Company Disclosure Letter;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 (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.
(vid) with respect Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon right to control or otherwise dispose direct the operations of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) with respect Subsidiaries prior to the Retained BusinessEffective Time. Prior to the Effective Time, 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company shall exercise, consistent with the terms 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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date conditions of this Agreement in accordance with the existing terms of such awards Agreement, complete control and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) supervision over its 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinSubsidiaries’ respective operations.
Appears in 2 contracts
Sources: Merger Agreement (Pcm, Inc.), Merger Agreement (Insight Enterprises Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed)), and except as (1) required by applicable Law, (2) otherwise 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 disclosed this Agreement, as set forth in Section 5.01(a) 6.1 of the Company Disclosure Letter)Letter or as required by applicable Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents this Agreement, (including B) as Parent may approve in connection with the Separation and the Distributionwriting (such approval not to be unreasonably withheld or delayed), (C) or (3) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter)Letter or (D) as required by applicable Laws, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate articles of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 by-laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) any operations 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in excess of $1 million in the aggregate, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) except as expressly required by any for the issuance of Shares upon the exercise of Company Plan Options outstanding on the date of this Agreement or in accordance with the terms of the 401(k) Plans as in effect on the date hereof: of this Agreement, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (A) establishother than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary), adoptor securities convertible or exchangeable into or exercisable for any shares of such capital stock, amend or terminate any material Company Plan options, warrants or amend the terms other rights of any outstanding equity-based awards kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other than the exclusion set forth in clauses (a) and (d) of the definition of Encumbrance) on any assets of the Company or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) other than regular quarterly cash dividends on Shares of $0.18 per Share and the Special Dividend, 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 the Company or to any other direct or indirect wholly owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viii) 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;
(ix) incur any indebtedness for borrowed money or guarantee such action taken 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 purposes indebtedness for borrowed money incurred in the ordinary course of replacingbusiness consistent with past practices;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Letter and consistent therewith, renewing make or extending authorize any capital expenditure in excess of $2 million in the aggregate;
(xi) enter into any Contract that would have been a broadly applicable material Company Plan Material Contract had it been entered into prior to this Agreement, except for customer Contracts entered into in the ordinary course of business consistent with past practice that does do not materially increase contain any of the cost provisions referred to in Section 5.1(j)(i)(F);
(xii) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles, the rules or policies of the Public Company Accounting Oversight Board or applicable Law;
(xiii) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $500,000 or any claim against the Company in excess of such amount;
(xiv) (i) amend or modify any Material Contract in any material respect or in manner adverse to the Company Plan or benefits its Subsidiaries, (ii) terminate any Material Contract, or (iii) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $500,000;
(xv) make any material Tax election, settle any material Tax claim or change any material method of Tax accounting;
(xvi) transfer, sell, lease, license, mortgage, pledge, suffer a Lien, divest, 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, except in the ordinary course of business or sales of obsolete assets;
(xvii) except as provided under such Company Plan based on the cost on in Section 6.9(g), as required pursuant to existing agreements in effect prior to the date hereofof this Agreement and set forth in Section 5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (Bi) grant or provide any transaction severance or retention bonuses termination payments or benefits to any director, officer, officer or employee or other service provider of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice as disclosed to the Parent prior to the date hereof, (Cii) increase the compensation, bonus or pension, welfare welfare, severance or other benefits of 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 for increases in base salary or bonus in the ordinary course of business consistent with past practice with respect to (1) for employees below the 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 changewho are not officers, (Diii) increase establish, adopt, amend or terminate any Benefit Plan or amend the severance or termination payments or benefits payable to terms of any director, officer, employee or other service provider of the Company or any of its Subsidiariesoutstanding equity-based awards, (Eiv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Benefit Plan, (Fv) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company U.S. Benefit Plan or Non-U.S. Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP, or (Gvi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries.
(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;
(ivxix) incur perform any Indebtedness services or issue provide any warrants products to any Person that would expand in any material respect the scope of services or other rights products subject to acquire any Indebtednessnon-compete provision to which the Company or any of its Subsidiaries is subject; or (xx) agree, except authorize or commit to do any of the foregoing.
(Ab) in the ordinary course of business consistent with past practice in a principal amount not Prior to exceed $400,000,000 in the aggregate at making any time outstanding on prevailing market terms written or on terms substantially consistent with or more beneficial broad-based oral communications to the Company and its Subsidiariesdirectors, 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, officers 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations employees of the Company or any of its Subsidiaries pertaining to the effect upon employment, compensation or benefit matters that will result as a consequence of the transactions contemplated by this Agreement, the Company shall provide Parent with respect a copy of the intended communication, Parent shall have a reasonable period of time to such Indebtedness (review and comment on the communication, and Parent and its 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 cooperate in providing any such mutually agreeable communication.
(G), (Hc) 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 From 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such sharesuntil Effective Time, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of as otherwise expressly required by this Agreement in accordance with the existing terms of such awards and the Company Stock PlansAgreement, (B) Investment Preferred Stock as the Company may approve in writing (as defined in the Bridge Facility) such approval not to be unreasonably withheld or delayed), (C) as set forth in Section 6.1(c) of the Parent Disclosure Letter or (D) as required by wholly owned applicable Laws, Parent will not and will not permit its Subsidiaries to the Company take any action or omit to take any other wholly owned Subsidiary action that is reasonably likely to result in any 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);
(ix) with respect conditions to the Retained Business, other than capital expenditures made Closing set forth 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 spend in excess of (A) $25,000,000 if the transaction is Article VII 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinbeing satisfied.
Appears in 2 contracts
Sources: Merger Agreement (Banta Corp), Merger Agreement (Banta Corp)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries thatotherwise expressly (A) required by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1B) required by applicable Law, (2C) expressly required approved in writing by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) Parent or (3D) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed)), the business of it and which determination its Subsidiaries shall take into account be conducted in the Company Overview Presentationordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, SROs, customers, clearing brokers, suppliers, licensors, licensees, distributors, creditors, lessors, employees, independent contractors and business associates and keep available the services of its and its Subsidiaries’ present officers, employees, independent contractors and agents, except as required by applicable Laws. Without limiting the generality of and in furtherance of the foregoing, after the date of this Agreement and prior to the Effective Time, except as otherwise expressly (1A) required by this Agreement, (B) required by applicable Law, (2C) expressly required approved in writing (such approval not to be unreasonably withheld, conditioned or delayed) by the Transaction Documents (including in connection with the Separation and the Distribution) Parent or (3D) otherwise expressly disclosed in set forth on Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) adopt or propose any change in its articles of incorporation or bylaws or comparable governing documents;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person in any transaction or series of related transactions, other than (A) acquisitions pursuant to and in accordance with the terms of Contracts in effect as of the date of this Agreement, true, correct and complete copies of which have been provided or otherwise made available to Parent prior to the date of this Agreement or (B) underwritten transactions and/or transactions effected pursuant to Rule 144A of the Securities Act which are not in excess of $20,000,000 in the aggregate;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or that of any of its Subsidiaries (other than in the case of clause (A)), (A) amend the Company Voting Agreements or (B) the issuance of shares (i) by its certificate wholly owned Subsidiary to it or another of incorporation its wholly owned Subsidiaries, (ii) in respect of Company Equity Awards outstanding as of the date of this Agreement or bylaws permitted to be granted under this Section 6.1(a) following the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plan as in effect on the date of this Agreement, or (iii) pursuant to the Investor Option), or comparable governing documentssecurities 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 on any of its assets or any of its Subsidiaries assets except in the ordinary course of business;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than amendments to the governing documents of any Subsidiary of or from the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify and any of its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary Subsidiaries) except in connection with securities lending in the ordinary course of business or capital markets transactions in the Company which remains a wholly owned Subsidiary after consummation ordinary course of such transaction), business and not in excess of $2,500,000;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1i) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of to the Company or to another any other direct or indirect wholly owned Subsidiary of the Company or to the Company or (2ii) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(iPre-Closing Dividend);
(viii) of the Company Disclosure Letter)reclassify, (D) enter into any agreement with respect to the voting of its capital stocksplit, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock;
(ix) incur any Indebtedness (including the issuance of any debt securities, warrants or other than rights to acquire any debt security) except in connection with securities lending in the ordinary course of business or capital markets transactions in the ordinary course of business and not in excess of $2,500,000;
(1x) pursuant except to the forfeiture extent specifically provided by, and consistent with the line items set forth in, the Company’s capital budget set forth in Section 6.1(a)(x) of the Company Disclosure Letter, make or authorize any payment of, or withholding accrual or commitment for, capital expenditures;
(xi) other than in the ordinary course of Taxes business consistent with respect topast practice, enter into any Contract that would have been a Company Restricted Stock UnitsMaterial Contract had it been entered into prior to this Agreement or amend, Company Deferred Stock Units modify, supplement, waive, terminate, assign, convey, encumber or Company Performance Stock Unitsotherwise transfer, in each case whole or in accordance with past practice and with part, rights or interest pursuant to or in any Company Material Contract, other than expirations of any such Contract in the terms ordinary course of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement business in accordance with the terms of such Contract, or cancel, modify or waive any debts or claims held by it or waive any rights except in the ordinary course of business; provided that for the purpose of this AgreementSection 6.1(a)(xi) the thresholds in Section 4.16(a)(vi) shall be deemed to refer to $200,000 and $400,000, respectively;
(xii) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings (except in the ordinary course of business or for money damages not to exceed $500,000 in the aggregate) or (2) purchases, repurchases, redemptions or other acquisitions of securities on a basis that would result in the imposition of any wholly owned Subsidiary writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity or SRO that would restrict the Company by future activity or conduct of the Company or any other wholly owned Subsidiary of its Subsidiaries or a finding or admission of a violation of Law or violation of the Company)rights of any Person or that is brought by any current, former or purported holders of any capital stock or debt securities of the Company or any of its Subsidiaries relating to the Merger or the other transactions contemplated by this Agreement;
(iixiii) merge make any changes with respect to accounting policies or consolidate procedures, except as required by changes in GAAP;
(xiv) take any action that would result in a material diminution for the net capital of a Broker-Dealer Subsidiary not in the ordinary course of business consistent with past practice or a failure to comply with the net capital requirements of the SEC, FINRA and any SRO applicable to any Broker-Dealer Subsidiary, except, for the avoidance of doubt, the payment of the Pre-Closing Dividend;
(xv) fail to duly and timely file all material reports and other material documents required to be filed with FINRA, the SEC or any other PersonGovernmental Entity or SRO, subject to extensions permitted by Law or restructureapplicable rules and regulations;
(xvi) fail to maintain in full force and effect all Insurance Policies covering the Company and its Subsidiaries and their respective properties, reorganize assets and businesses in a form and amount consistent with past practice;
(xvii) make, change or completely revoke any material Tax election, change an annual Tax accounting period, adopt or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) 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 Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations dispute, surrender any right to claim a refund of a Subsidiary material amount of Taxes, 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 which such Subsidiary is respect of any taxable period (or portion thereof) ending after the surviving entity Closing Date, the Tax liability of Parent or its Affiliates;
(xviii) transfer, sell, lease, assign, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Encumbrance upon, any assets, product lines or businesses material to it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with an acquisition not otherwise prohibited by services provided in the ordinary course of business and sales of obsolete assets, other than pursuant to Company Material Contracts as in effect prior to the date of this Agreement true, correct and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries complete copies of the Company that would not prevent, materially delay or materially impair the Transactions)which have been made available to Parent;
(iiixix) sell, assign or otherwise transfer any Intellectual Property Rights to any Person, (B) grant any license, covenant not to ▇▇▇, release, waiver or other right under any Intellectual Property Rights to any Person, except for non-exclusive licenses granted in the ordinary course of business consistent with past practice, or (C) cancel, abandon or allow to lapse or expire any material Intellectual Property Rights;
(xx) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend applicable Law or terminate any material Company Plan or amend pursuant to the terms of any outstanding equity-based awards other than any such action taken Plan in effect as of the date hereof, (A) increase the cash compensation or benefits payable or to become payable to its directors, officers, employees or individual independent contractors, except, for employees who are not executive officers for purposes of replacingSection 16 of the Exchange Act, renewing increases in annual salary or extending a broadly applicable material Company Plan wage rate in the ordinary course of business consistent with past practice that does do not materially increase exceed 6% individually or 3% in the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofaggregate, (B) grant any rights to severance or provide termination pay to, or enter into any transaction employment or retention bonuses to severance agreement with, any director, officerofficer or other employee of the Company or any Company Subsidiary, (C) take any action to amend or waive any vesting criteria or accelerate vesting, exercisability or funding under any Plan or award granted thereunder, (D) become a party to, establish, adopt, materially amend, commence participation in or terminate any Plan or any arrangement that would have been a Plan had it been entered into prior to this Agreement, (E) grant any new awards, or amend or modify the terms of any outstanding awards, under any Plan, (F) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any Company Employee, (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 individually or $1,000,000 in the aggregate or (H) terminate the employment of any executive officer other service provider than for cause;
(xxi) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xxii) change in any material respect the cash management practices, policies or procedures of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice Subsidiaries with respect to (1) employees below the level collection of Executive Vice President and (2) employees at or above the level accounts receivable, establishment of Executive Vice President in respect reserves for uncollectible accounts receivable, accrual of increases of less than 7.5% of compensation relative to their compensationaccounts receivable, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation accounts payable, purchases, prepayment of expenses or benefits under any Company Plan (including any equity-based awards)deferral of revenue, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change from the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 Company’s and its Subsidiaries’ practices, taken as a whole, than existing Indebtedness, policies and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except procedures 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 thereto in the ordinary course of business consistent with past practice, including (Ei) commercial paper issued taking (or omitting to take) any action that would have the effect of accelerating revenues, accelerating cash receipts or accelerating the collection of accounts receivable to pre-Closing periods that would otherwise be expected to take place or be incurred in post-Closing periods, or (ii) taking (or omitting to take) any action that would have the ordinary course effect of business consistent with past practice delaying or postponing the payment of any accounts payable to post-Closing periods that would otherwise be expected to be paid in a principal amount not pre-Closing periods;
(xxiii) take any action or omit to exceed $250,000,000 take any action that is intended to or would reasonably be likely to result 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 conditions to the Merger set forth in Article VII not being satisfied; or
(and fees and expenses in connection therewithxxiv) agree, authorize or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at commit to do any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiariesthat, 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 after the date of this Agreement in and prior to the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that Effective Time (unless the Company shall consult with Parent prior otherwise approve in writing (such approval not to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) be unreasonably withheld, conditioned 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;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ixdelayed)), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than except as otherwise expressly (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered required by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual PropertyAgreement, (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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed required by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) applicable Law or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary set forth on Section 6.1(b) of the Company; provided thatParent Disclosure Letter, for the avoidance of doubtParent will not, 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 and will 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);permit its Subsidiaries to:
(ixi) with respect to the Retained Business, other than capital expenditures made adopt or propose any change in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming Parent’s certificate of incorporation or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 bylaws in any event manner that would prohibit the Merger 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 consummation of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, other transactions contemplated by this Agreement or would reasonably be expected toto have a material and adverse impact on the value of the Parent Common Stock that disproportionately affects the holders of Company Common Stock;
(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 or for quarterly dividends on Parent Common Stock not in excess of 25% of Parent’s adjusted EBITDA as to any given quarter calculated in a manner consistent with Parent’s historical practices);
(iii) to the extent such action would prevent, materially delay or materially impair the consummation ability of Parent to consummate the TransactionsMerger, make any repurchase or other acquisition of any outstanding shares of Parent Common Stock (other than repurchases or other acquisitions of Parent Common Stock in open market transactions at market prices or in connection with an accelerated share repurchase transaction or similar transaction on customary terms);
(xiv) 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 than securities in respect of, in lieu of or in substitution for, any shares of its capital expenditures made stock in accordance any manner that would reasonably be expected to have a material and adverse impact on the value of the Parent Common Stock;
(v) take any action or omit to take any action that is intended to or would reasonably be likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(vi) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent or the Company, directly or indirectly, the right to control or direct the other party’s operations prior to the Effective Time. Prior to the Effective Time, 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 to the contrary set forth in this Agreement, no consent of Parent or the Company shall be required with respect to any matter set forth in this Section 5.01(b)(v) and other than purchases and licenses 6.1 or elsewhere in this Agreement to the extent that the requirement of film and television and production programming (includinsuch consent would, upon the advice of legal counsel, violate applicable Antitrust Laws. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, will be interpreted in such a way as to require compliance by any party hereto if such compliance would result in the violation of any rule, regulation or policy of any Governmental Antitrust Entity or applicable Law.
Appears in 2 contracts
Sources: Merger Agreement (FBR & Co.), Merger Agreement (B. Riley Financial, Inc.)
Interim Operations. Each of Grace and Fresenius AG (afor itself and on behalf of Fresenius AG) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries subsidiaries that, from and after the date of hereof until the 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 prior 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 First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) pendency of the Company Disclosure Letter)Reorganization, the Company shall business of it and its subsidiaries will be conducted only in the ordinary and usual course consistent with past practice and existing business plans previously disclosed to the other parties and, to the extent consistent therewith, it and its subsidiaries will use all reasonable efforts to preserve their business organization intact and maintain their existing relations with customers, suppliers, employees and business associates.
(b) It will not and shall not permit (i) sell or pledge or agree to sell or pledge any stock owned by it in any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than subsidiaries or, in the case of clause Fresenius AG, any FWD Business Subsidiary; (A)), (Aii) amend its certificate Certificate of incorporation Incorporation or bylaws By-laws (or comparable governing documents) similar organizational document); (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (Biii) split, combine, subdivide combine or reclassify its any outstanding shares of capital stock stock; or (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Civ) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting any of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);.
(iic) merge or consolidate with any other PersonNeither Grace, or restructureFresenius USA, 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 nor any of its Subsidiariestheir respective subsidiaries or, (C) increase the compensationFresenius AG, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations solely with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directorsFWD Business Subsidiary, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 respect to the Retained Business, transfer, lease, licenseissue, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 or propose the issuance, delivery, sale, grantpledge, transfer disposition or encumbrance of, any shares of, or securities convertible or exchangeable for, or options, puts, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock or of any securities convertible or exchangeable into or exercisable for, or any class other than common shares issuable pursuant to options, warrants or and other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units convertible securities outstanding on the date of this Agreement hereof and disclosed in accordance with its Disclosure Letter, and employee stock options granted after the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined date hereof in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary ordinary course 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);business.
(ixd) None of Grace, Fresenius USA or Fresenius AG, with respect to the Retained 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 made in accordance with Section 5.01(b)(vexpenditures; (iii) and make any acquisition of, or investment in, assets, stock or other securities of any other person or entity other than with respect its wholly owned subsidiaries or (iv) make any divestiture.
(e) Except as required by agreements or arrangements disclosed in 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 film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not other employees in the ordinary course and $50,000,000 in any event a manner consistent with past practice, which would bind Newco (or its subsidiary) after the Reorganization.
(Bf) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case Except as may be required 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 satisfy contractual obligations existing as of the date hereof (and disclosed to the other parties hereto) and the requirements of applicable law, and except in the agreement for such acquisition); provided that ordinary course of business, neither the Company it nor any of its Retained Subsidiaries shall subsidiaries or, in the case of Fresenius AG, any FWD Business Subsidiary, will establish, adopt, enter into, make, amend or make any elections under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, employee stock ownership, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees which would affect Newco (or its subsidiary), except in a manner consistent with past practice.
(g) It will not implement any change in its accounting principles, practices or methods, other than as may be required by German GAAP, in the case of Fresenius AG, or US GAAP, in the case of Grace and Fresenius USA, other than as may be necessary or advisable in connection with the Distribution.
(h) Neither it nor any of its subsidiaries will authorize or enter into an agreement to take any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
actions referred to in paragraphs (xa) other than capital expenditures made in accordance with Section 5.01(b)(vthrough (g) and other than purchases and licenses of film and television and production programming (includinabove.
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) The Company Each of FMCTI and Technip covenants and agrees as to itself and its respective Subsidiaries that, from and after the execution date of the MOU and until the earlier of the FMCTI Effective Time or the termination of this Agreement and prior in accordance with its terms, unless FMCTI (in the case of any action proposed to be taken by Technip or any Subsidiary of Technip) or Technip (in the First Effective Time (unless Parent case of any action proposed to be taken by FMCTI or any Subsidiary of FMCTI) shall otherwise approve in writingwriting (which approval, which approval other than with respect to Section 5.1(b)(iii) and Section 5.1(b)(v), shall not be unreasonably withheld, conditioned or delayeddelayed by the party from whom it is requested), and except as (1) required by applicable Law, (2) Self-Regulatory Organization, or as expressly required contemplated by the Transaction Documents this Agreement (including with respect to the Preliminary Transactions and actions that are incidental thereto) or, in connection with the Separation and the Distribution or case of Technip, as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a) 5.1 of the Company Technip Disclosure Letter or, in the case of FMCTI, as otherwise set forth in Section 5.1 of the FMCTI Disclosure Letter), :
(a) the Company shall, business of it and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary and usual course of business consistent with past practice, practice and the Company shall, it and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, shall use their respective commercially reasonable efforts to preserve the Retained Business’ intact its business organization intact and maintain the Retained Business’ its existing relations and goodwill with all Governmental EntitiesEntities (including applicable Regulatory Authorities) and Self-Regulatory Organizations, clients, customers, suppliers, distributors, licensors, creditors, lessors, employees employees, stockholders and other Persons with which it or its Subsidiaries has significant business associates and others having material business dealings with the Retained Business (including material content providersrelations, 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.as applicable;
(bi) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit neither it nor any of its Subsidiaries to:
shall amend or propose to amend, modify, waive, rescind or otherwise change any provisions of its Organizational Documents, whether by merger or otherwise); (iii) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A))neither FMCTI nor Technip, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not preventas applicable, delay or impair the Initial Merger or the other Transactions), (B) shall split, combine, subdivide combine or reclassify its outstanding shares of capital stock or other equity interests; (except for iii) neither it nor any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) its Subsidiaries shall declare, set aside or pay any type of dividend or distribution other distribution, whether payable in cash, stock stock, property or property (or any a combination thereof) , in respect of any capital stock or other equity interests, as appropriate, other than dividends payable by its direct or indirect wholly owned Subsidiaries to it or another of its direct or indirect wholly owned Subsidiaries in the ordinary and usual course of business and consistent with past practice; (iv) it shall not adopt a plan of merger, consolidation or complete or partial liquidation or resolutions providing for a merger, consolidation or complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; or (v) except (x) for the acquisition by such party of shares of its capital stock (except for (1) any dividends or distributions paid other equity interests in connection with the surrender of such shares by a direct holders of FMCTI Stock Awards or indirect wholly owned Subsidiary Technip Stock Awards, as applicable, in order to pay the exercise price of such Stock Awards in accordance with the Company to another direct or indirect wholly owned Subsidiary terms of the Company or to the Company such Stock Awards or (2y) normal semiannual cash dividends on for the Common Stock as described in Section 5.01(b)(i) withholding or disposition of the Company Disclosure Letter), (D) enter into any agreement shares of capital stock or other equity interests to satisfy withholding Tax obligations with respect to FMCTI Stock Awards or Technip Stock Awards, as applicable, granted pursuant to the voting FMCTI Stock Plan and the Technip Stock Plans, as applicable, in accordance with the terms of such Stock Awards, neither it nor any of its capital stock, or (E) purchase, Subsidiaries shall repurchase, redeem or otherwise acquire any shares of its or their capital stock or other equity interests, as applicable, or any securities convertible into or exchangeable into or exercisable for any shares of its or their capital stock or other equity interests, as applicable;
(other than c) neither it nor any of its Subsidiaries shall (1i) pursuant to the forfeiture issue, sell, pledge, dispose of or encumber any shares of, or withholding securities convertible into or exchangeable or exercisable for, or options, warrants, calls, profits interests, conversion rights, stock appreciation rights, stock-based units (performance based or otherwise), redemption rights, repurchase rights, commitments or rights of Taxes any kind to acquire or other rights that relate to or are derivative of any of its or their capital stock, voting securities or other equity interests, or any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with respect toits stockholders on any matter, Company Restricted other than FMCTI Shares or Technip Shares (as applicable) issuable or transferable pursuant to (A) Technip OCÉANEs outstanding prior to the date of the MOU or (B) FMCTI Stock UnitsAwards or Technip Stock Awards outstanding on or awarded prior to the date of the MOU or made by FMCTI or Technip, Company Deferred Stock Units or Company Performance Stock Unitsas applicable, after the date of the MOU in accordance with Section 5.1(d), except, in each case case, in accordance connection with internal reorganizations entered into in the ordinary and usual course of business solely among such party’s wholly owned Subsidiaries which will not adversely affect the Technip Intended French Tax Treatment or otherwise be reasonably expected to have a material adverse Tax consequence on the Topco Group after the Closing, (ii) incur any indebtedness for borrowed money (including any guarantee of indebtedness) or issue any debt securities, except (x) in connection with refinancings of existing indebtedness for borrowed money upon market terms and conditions or (y) for drawdowns of credit facilities outstanding as of the date of the MOU (or refinancings of such credit facilities permitted under clause (x)) in the ordinary and usual course of business and consistent with past practice practice; or (iii) make or authorize or commit to any capital expenditures, other than in the ordinary and usual course of business and consistent with past practice;
(d) except as required by applicable Law or the terms of the Company Stock Plans as any Benefit Plan or Labor Agreement existing and in effect on the date of this Agreement the MOU, neither it nor any of its Subsidiaries shall (i) terminate, establish, adopt, enter into, or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchasesmaterially amend any Benefit Plan, repurchasesTechnip Stock Award, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company FMCTI Stock Award or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 arrangement that would not prevent, materially delay be a FMCTI Benefit Plan or materially impair the Transactions);
(iii) except as expressly required by any Company a Technip Benefit Plan as if in effect on the date hereof: of the MOU, (Aii) establishincrease the salary, adoptwage, amend bonus, pension, severance, fringe benefits or terminate other compensation payable to any material Company Plan current or amend former Service Provider or enter into any contract, agreement, commitment or arrangement to do any of the terms of any outstanding equity-based awards foregoing, other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary and usual course of business and consistent with past practice that does and in a manner which will not materially increase adversely impact the cost ability of such Company Plan or benefits provided under such Company Plan based on either of the cost on counsel listed in Section 7.2(e) to render the date hereofopinion described in Section 7.2(e) at the expected Merger Effective Date, (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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Eiii) take any action to accelerate the vesting vesting, payment or payment funding of (A) any compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company current or former Service Provider under 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 or (GB) forgive any loans to directorsstock option, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants restricted stock, restricted stock unit or other rights to acquire any Indebtednessequity-related award, in each case, except (Ax) if such accelerated vesting, payment or funding is a result of a termination of employment or service without cause upon or following the consummation of the transactions contemplated by this Agreement or (y) in the ordinary and usual course of business and consistent with past practice and in a principal amount manner which will not to exceed $400,000,000 in adversely impact 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 ability of either of the Contract evidencing such Indebtednesscounsel listed in Section 7.2(e) to render the opinion described in Section 7.2(e) at the expected Merger Effective Date, or (Biv) grant any stock option, restricted stock, restricted stock unit, performance stock unit or other equity-based award;
(e) neither it nor any of its Subsidiaries shall establish, adopt, enter into, materially amend or terminate any Labor Agreement;
(f) except with respect to the Bridge FacilityIntellectual Property, 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or neither it nor any of its Subsidiaries with respect to such Indebtedness shall lease, license, transfer, exchange or swap, mortgage (and Parent and including securitizations), pledge, abandon or otherwise dispose of (whether by way of merger, consolidation, sale of stock or assets, or otherwise) any material portion of its assets, including the capital stock or other equity interests of its Subsidiaries, including, following except for (i) dispositions of assets (including the Distribution, amount of indebtedness assigned in such dispositions) that individually or in the Retained Subsidiaries, shall not aggregate with all other such dispositions have any obligations in respect thereof)fair market value of less than $50,000,000, (Gii) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, transactions between it and any refinancings of its direct or replacements indirect Subsidiaries or transactions between such Subsidiaries or (iii) the sale 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 goods 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 usual course of business consistent with past practice;
(vg) with respect to the Retained Businessneither it nor any of its Subsidiaries shall, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) except in the ordinary and usual course of business and consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017practices, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfersell, lease, license, selltransfer, assignexchange or swap, let lapsemortgage (including securitizations) pledge, abandon, cancel, mortgage, pledge, place a Lien upon allow to lapse or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Material Intellectual Property where the aggregate payments under owned by 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 party or $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viiih) 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, neither it nor any shares of its capital stock Subsidiaries shall acquire or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 agree to acquire any business, (whether by merger, consolidation, purchase of property or otherwise) any Person, division or assets, licenses except for acquisitions (x) entered into on an arm’s length basis, (y) the expected gross expenditures and commitments (including the amount of any indebtedness assumed) of which do not exceed $50,000,000 individually or otherwise in the aggregate with all other such acquisitions and (valuing z) which are not reasonably likely, individually or in the aggregate, to prevent or materially delay the satisfaction of the conditions set forth in Section 6.1(d);
(i) except for litigation or arbitration addressed in Section 5.7, neither it nor any of its Subsidiaries shall settle or compromise, or offer to settle or compromise (other than any litigation or arbitration brought by FMCTI against Technip or brought by Technip against FMCTI arising out of or relating to this Agreement) any litigation or arbitration if such settlement or compromise (x) would involve individually the payment of money by such party or its Subsidiaries in excess of $10,000,000 or together with all such other settlements or compromises the payment of money by such party or its Subsidiaries in excess of $20,000,000 or (y) would involve any admission of material wrongdoing or include any other material non-cash consideration at monetary remedy, including any material conduct requirement or restriction by such party or its fair market value as Subsidiaries, except, in the case of each clause (x) and clause (y), in the ordinary and usual course of business consistent with past practice;
(j) neither it nor any of its Subsidiaries shall (x) renew, amend in any material respect or terminate any of its Material Contracts, (y) waive, release or assign any material rights or claims thereunder or (z) enter into or subsequently amend in any material respect any Contract that, if existing on the date of the agreement for such acquisitionMOU, would be a Material Contract, except, in each case, as permitted pursuant to Section 5.1(c)(ii) or Section 5.1(d) and, in the case of clause (x); provided that , in the ordinary and usual course of business consistent with past practice;
(k) neither the Company it nor any of its Retained Subsidiaries shall make or change any material Tax election, adopt or change any material method of Tax accounting, file any material amended Tax Return or enter into a closing agreement or advance pricing agreement in respect of a material amount of Taxes or settle or compromise any material audit, assessment, notice, Tax claim or proceeding relating to Taxes, or agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes (except in the ordinary course of business), or enter into any closing agreement within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. law) with respect to a material amount of Taxes, surrender any material right to claim a refund or offset of any Taxes, or change the classification of FMCTI or Technip, as applicable, or any of their Subsidiaries for United States Tax purposes, except, in each case, to the extent otherwise required by Law, required as part of the completion of the Preliminary Transactions or in the ordinary and usual course of business consistent with past practice;
(l) neither it nor any of its Subsidiaries shall make a request for a Tax ruling (other than the French Tax Ruling or any additional ruling request from the French Ministry of Budget having the purpose of obtaining the Technip Intended French Tax Treatment and the transfer to Topco of French Tax losses of the Technip Tax consolidated group, any confirmation requested from Her Majesty’s Revenue and Customs (“HMRC”) as referred to in Section 5.9 or Section 5.11, any additional ruling request from any other Governmental Entity the parties agree is desirable as part of the consummation of the Preliminary Transactions or except as otherwise provided in this Agreement or any schedule to this Agreement);
(m) neither it nor any of its Subsidiaries shall permit any change in its financial accounting principles, policies or practices, except to the extent that any such changes in financial accounting principles, policies or practices shall be required by changes in GAAP or SEC rules and regulations or Regulation S-X of the Exchange Act and, in each case, authoritative interpretations thereof (in the case of FMCTI) or IFRS and authoritative interpretations thereof (in the case of Technip);
(n) neither it nor any of its Subsidiaries shall enter into any such transaction Contract that wouldgrants “most favored nation” status to any counterparty or any “non-compete” or similar Contract that, in any case, would (or would purport to) materially restrict the business of the Topco Group following the FMCTI Effective Time with respect to engaging or competing in any line of business or in any geographic area;
(o) neither it nor any of its Subsidiaries shall make any loans, advances or capital contributions to, or investments in, any other Person (other than any wholly owned Subsidiary), other than (x) any routine travel, relocation and business advances to employees of it or its Subsidiaries and (y) trade credit to customers, in either case, made in the ordinary and usual course of business consistent with past practice;
(p) neither it nor any of its Subsidiaries shall enter into any material new line of business outside of its existing business segments;
(q) it shall not convene any regular or special meeting (or any adjournment or postponement thereof) of its stockholders other than a (i) stockholder meeting to adopt this Agreement, including the FMCTI Stockholders’ Meeting and the Technip Stockholders’ Meetings, and approve the Mergers and (ii) a regular annual meeting to address matters arising in the ordinary course consistent with past practice other than this Agreement and the Mergers;
(r) neither it nor any of its Subsidiaries shall implement or announce any material plant closing, material reduction in labor force or other material layoff of employees or service providers other than routine employee terminations for cause or following performance reviews in the ordinary and usual course of business and consistent with past practice;
(s) neither it nor any of its Subsidiaries shall enter into, renew, amend or terminate any Contract that, if existing on the date of the MOU, would reasonably need to be expected todisclosed on Section 4.21 of the FMCTI Disclosure Letter or Technip Disclosure Letter, preventas applicable; and
(t) neither it nor any of its Subsidiaries shall authorize or enter into an agreement, materially delay arrangement or materially impair understanding to do any of the foregoing set forth in Section 5.1(a) through (s) if FMCTI or Technip, as applicable, would be prohibited by the terms of Section 5.1(a) through (s) from doing the foregoing. Nothing contained in this Agreement shall give (x) Technip, directly or indirectly, the right to control or direct the operations of FMCTI or Topco, or (y) FMCTI or Topco, directly or indirectly, the right to control or direct the operations of Technip, prior to consummation of the Transactions;
Technip Merger and FMCTI Merger, respectively. Prior thereto, each of Technip and its Subsidiaries, on the one hand, and FMCTI and its Subsidiaries (x) including Topco), on the other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinhand, sh
Appears in 2 contracts
Sources: Business Combination Agreement (FMC Technologies Inc), Business Combination Agreement (FMC Technologies Inc)
Interim Operations. (a) The Each of the Company and EFIH covenants and agrees as to itself and each of its Subsidiaries (other than the Oncor Entities and other than with respect to any entities, assets or liabilities to be contributed to Reorganized TCEH in the Reorganized TCEH Contributions or pursuant to the Plan of Reorganization) that, from and after except (i) as otherwise specifically permitted or required by the execution provisions of this Agreement and prior the Plan of Reorganization, and any action reasonably necessary to effectuate the First Effective Time Reorganized TCEH Spin-Off, the Reorganized TCEH Contributions, the Preferred Stock Sale and the Reorganized TCEH Conversion, (unless ii) as Parent shall otherwise may approve in writingwriting (such approval, which approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned), and except (iii) as (1) is required by any applicable LawLaw or any Governmental Entity; provided that, to the extent legally permissible, the Company or EFIH shall provide prompt written notice to Parent of any such requirement; (2iv) 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 disclosed set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter, or (v) as required by the Bankruptcy Court in the Chapter 11 Cases without any of the Debtors having requested or applied (or having requested that any of their respective Affiliates make such request or application) for the Bankruptcy Court to impose such requirement (and with the Company and EFIH, to the extent requested by Parent prior to such imposition, having used commercially reasonable efforts to challenge such imposition before the Bankruptcy Court), in each case after the date hereof and prior to the earlier of the Termination Date (as defined below) and the Effective Time, each of the Company and EFIH shall, and shall cause each of its their respective Subsidiaries (other than the Oncor Entities and other than with respect to any entities, assets or liabilities to be contributed to Reorganized TCEH in the Reorganized TCEH Contributions or the Plan of Reorganization) to, conduct its business and the Chapter 11 Cases in accordance with the Bankruptcy Code and the orders of the Bankruptcy Court and use its reasonable best efforts to conduct the Retained Business in the ordinary course of preserve its business consistent with past practiceorganizations intact, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, associates. Notwithstanding the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement until the earlier of the Termination Date and prior the Effective Time, except (A) as otherwise specifically permitted or required by the provisions of this Agreement and the Plan of Reorganization, and any action reasonably necessary to effectuate the First Effective Time Reorganized TCEH Spin-Off, the Reorganized TCEH Contributions, the Preferred Stock Sale and the Reorganized TCEH Conversion, (unless B) as Parent shall otherwise may approve in writingwriting (such approval, which approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) is required by any applicable LawLaw or any Governmental Entity, (2D) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed as set forth in Section 5.01(b6.1(a) of the Company Disclosure LetterLetter or (E) as required by the Bankruptcy Court in the Chapter 11 Cases without any of the Debtors having requested or applied (or having requested that any of their respective Affiliates make such request or application) for the Bankruptcy Court to impose such requirement (and with the Company and EFIH, to the extent requested by Parent prior to such imposition, having used commercially reasonable efforts to challenge such imposition before the Bankruptcy Court), each of the Company shall and EFIH will not and shall will not permit any of its respective Subsidiaries (other than the Oncor Entities and other than with respect to any asset, liability or entity to be contributed to Reorganized TCEH in the Reorganized TCEH Contributions or pursuant to the Plan of Reorganization) to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation incorporation, bylaws, limited liability company agreement or bylaws other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate with any other Person;
(iii) (adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization other than amendments to the governing documents Plan of Reorganization;
(iv) make any acquisition of any Subsidiary assets or Person for a purchase price individually or in the aggregate in excess of $10,000,000;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber or authorize the Company that would not preventissuance, delay sale, pledge, disposition, grant, transfer, lease, license, guarantee or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect encumbrance of any shares of its capital stock or other equity interests (except for other than (1A) any dividends or distributions paid the issuance of shares of EFH Common Stock upon the settlement of awards under the Company Stock Plans (and dividend equivalents thereon, if applicable), (B) the issuance of equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, or (C) pursuant to the modification, replacement, refunding, renewal, extension or refinancing of EFIH’s first lien debtor-in-possession financing facility or the modification, replacement, refunding, renewal, extension or refinancing thereof (provided that any modification, replacement, refunding, renewal, extension or refinancing shall not be for an amount greater than the then current outstanding principal amount thereof except by an amount equal to the unpaid accrued interest and premium thereon plus the reasonable amounts paid in respect of fees and expenses incurred in connection with such modification, replacement, refunding, renewal, extension or refinancing), or, securities convertible or exchangeable into or exercisable for any shares of such capital stock or other equity interests, or any 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;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than in or to the Company or any direct or indirect wholly owned Subsidiary of the Company) individually or in the aggregate in excess of $10,000,000;
(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 capital stock or other equity interests (except for dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to another any other direct or indirect wholly owned Subsidiary of the Company Company) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stockstock or other equity interests or take any action that would result in the Company or any of its Subsidiaries becoming subject to any restriction not in existence on the date hereof with respect to the payment of distributions or dividends;
(viii) reclassify, split, combine or (E) purchasesubdivide, repurchasedirectly or indirectly, redeem or otherwise acquire any shares of its capital stock stock, equity interests or any securities convertible or exchangeable into or exercisable for any shares of its capital stock or equity interests;
(other than (1ix) pursuant to the forfeiture ofrepurchase, redeem or otherwise acquire, or withholding offer to repurchase, redeem or otherwise acquire, any of Taxes with respect toits capital stock or equity interests or any securities of convertible into or exchangeable or exercisable for capital stock or equity interests, Company Restricted Stock Unitsor any warrants, Company Deferred Stock Units or Company Performance Stock Unitscalls, 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 options or other acquisitions rights to acquire any such capital stock, securities or interests;
(x) repurchase, redeem, defease, cancel, prepay, forgive, issue, sell, incur or otherwise acquire any indebtedness for borrowed money or any debt securities or rights to acquire debt securities, of securities of any wholly owned Subsidiary of the Company by the Company or any of its Subsidiaries other than pursuant to the Plan of Reorganization, 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) incurred or repaid under EFIH’s first lien debtor-in-possession financing facility or the modification, replacement, refunding, renewal, extension, repayment or refinancing (subject to clause (v) above) thereof, in each case, to the extent approved by the Bankruptcy Court in the Chapter 11 Cases, or (B) incurred by drawing under outstanding letters of credit;
(iixi) merge (A) grant to any Employee or consolidate with any member of the board of directors (or similar governing body) or consultant any increase in compensation or benefits other Personthan increases in the ordinary course of business, (B) grant to any Employee or any member of the board of directors (or similar governing body) or consultant any increase in change in control, severance or termination pay, (C) amend in any material respect or terminate any Assumed Plan or the EFH Retirement Plan or related agreement thereunder or establish, adopt, enter into any plan or related agreement that would be a Benefit Plan if in existence on the date hereof and, in the case of a Contributed Plan, other than in the ordinary course of business, or restructurewith respect to any actions taken to terminate and wind-down any Discharged Plan or as otherwise required under the terms of this Agreement, reorganize (D) take any action to accelerate the time of vesting, funding or completely payment of any compensation or partially liquidate benefits under any Assumed Plan or EFH Retirement Plan or related agreement thereunder (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 any plan or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with 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 related agreement that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company be an Assumed Plan as if in effect existence on the date hereof: ); provided that with respect to the EFH Retirement Plan, such actions may be taken between the date hereof and the effective date of the Split Participant Agreement that are consistent with that certain Separation Agreement between TXU Corporation and Oncor Holdings dated October 10, 2007, and provided further that with respect to the Discharged Plans, such actions may be taken that are in furtherance of the confirmation of a plan of reorganization or the termination and wind-down of such Discharged Plans, (E) grant any new awards, or any outstanding awards, under any Assumed Plan or related agreement thereunder (or any plan or related agreement that would be an Assumed Plan if in existence on the date hereof), 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) establish, adopt, amend or terminate any material Company Plan or amend through (F) for actions required pursuant to the terms of any outstanding equity-based awards other than Benefit Plan, or in accordance with the terms and conditions of this Agreement or applicable Law; provided, however, that following the date of this Agreement, the Company and EFIH may, and may permit any of their respective Subsidiaries to, hire any individual or engage any individual, as an interim employee through a third party staffing agency or as an independent contractor or consultant, with such action taken engagements to end in all instances prior to the Closing Date, to the extent reasonably necessary for purposes the Company’s operations between the TCEH Effective Date and the Closing, and may, notwithstanding anything contained in this Agreement to the contrary, provide compensation and benefits that, for all such persons as a group, (i) does not exceed $15,000,000 in the aggregate in any annual period and (ii) does not impose any liability on the reorganized Company and its Subsidiaries following the Closing;
(xii) make or authorize any capital expenditure in an amount in excess of replacing$1,000,000, renewing in the aggregate, during any 12 month period;
(xiii) make any material changes with respect to its financial accounting methods, principles, policies, practices or extending a broadly applicable material Company Plan procedures, except as required by Law or by changes in GAAP;
(xiv) make (excluding any elections made (a) in the ordinary course of business consistent with past practice that does not materially increase or (b) under Section 168(k) of the cost Code) or change any material Tax election, change any material method of such Company Plan Tax accounting, settle or benefits provided under such Company Plan based on compromise any material Tax liability, claim or assessment or agree to an extension or waiver of the cost on the date hereof, (B) grant or provide any transaction or retention bonuses limitation period to any directormaterial Tax claim or assessment, officergrant any power of attorney with respect to material Taxes, employee enter into any closing agreement with respect to any material Tax or other service provider refund, amend any material Tax Return, or surrender any right to claim a material Tax Refund of the Company or any of its Subsidiaries, (C) increase the compensationin each case, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or such actions agreed to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive connection with any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants audit 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 Tax proceedings disclosed in Section 5.01 6.1(a)(xiv) of the Company Disclosure Letter; provided, furtherhowever, that the Company full details of any such actions shall consult with be disclosed to Parent if such actions would result in the inclusion of any material item of income in, or the exclusion of any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date which taxable income was realized (and reflects economic income arising) prior to incurring Indebtedness under this clause the Closing Date;
(G)xv) waive, release, assign, settle or compromise any pending or threatened claim, action, suit or proceeding against the Company or any of its Subsidiaries other than settlements or compromises (HA) Indebtedness assumed that would result 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 payment by the Company and its SubsidiariesSubsidiaries of less than $10,000,000 in the aggregate, taken as a whole, than and (B) that do not entail the Indebtedness being replaced acceptance or refinanced; provided, further, that imposition of any material restrictions on the business or operations of the Company shall consult with Parent prior or its Subsidiaries;
(xvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to incurring Indebtedness under this clause (H)lapse or expire or otherwise dispose of any assets, (I) any amendment, refinancing product lines or renewal businesses of the existing revolving and term loan facilities Company or its Subsidiaries with a fair market value in excess of $10,000,000 in the YES Facility and any refinancing thereofaggregate for all such actions, other than (A) sales of obsolete goods or equipment, or (B) cancellation of, abandonment of, allowing to lapse or expire, or the licensing or sublicensing of, material Intellectual Property, in each caseof (A) and (B) , 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 accordance with a Sky Acquisition and not for speculative purposesthe Bankruptcy Code or the orders of the Bankruptcy Court; provided provided, however, that in no event shall the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness or any of the type described in clauses its Subsidiaries (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;
(v) with respect to the Retained Business, other than with respect to acquisitions of businessesthe Oncor Entities) transfer, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 respect to the Retained Business, transfersell, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses capital stock or ordinary course security other equity interests of any of their respective Subsidiaries other than in connection with the production modification, replacement, refunding, renewal, extension or refinancing (subject to clause (v) above) of EFIH’s first lien debtor-in-possession financing of film and television programming or video game productionfacility;
(xvii) except as permitted by clause (v)(C) above, letting lapseenter into, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event terminate (other than at the end of a term), renew or materially extend or amend any Company Material Contract or Contract (other than the Interim TSA (as such is defined in the Separation Agreement) that, if in effect on the date hereof, would be a Company Material Contract; or waive any material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries or liability or obligation owing to the Company or any of its Subsidiaries, under any Company Material Contract or Contract (other than the Interim TSA)) that, if in effect on the date hereof, would be a Company Material Contract, other than pursuant to the Plan of Reorganization;
(xviii) 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 transactions among contemplated by this Agreement that would not otherwise be due;
(xix) fail to maintain in full force and effect material insurance policies covering the Company and its wholly owned Retained Subsidiaries)Subsidiaries (other than the Oncor Entities) and their respective properties, (D) licenses, sales, letting lapse, abandonment assets and cancellations of Intellectual Property that is used or held for use exclusively businesses in the SpinCo Business a form and (E) Affiliation Agreements;amount consistent with past practice; or
(viixx) with respect agree, authorize or commit to do any of the foregoing.
(b) Notwithstanding anything in Section 6.1(a) to the Retained Businesscontrary, transferthe Company and its Subsidiaries may take commercially reasonable actions consistent with prudent industry practices that would otherwise be prohibited pursuant to Section 6.1(a) in order to prevent the occurrence of, leaseor mitigate the existence of, licensean emergency situation involving endangerment of life, sellhuman health, assignsafety or the Environment or the protection of equipment or other assets; provided, let lapsehowever, abandon, cancel, mortgage, pledge, place a Lien upon that the Company shall provide Parent with notice of such emergency situation and any such action taken by the Company or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(vthe Oncor Entities) 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinsoon as rea
Appears in 2 contracts
Sources: Merger Agreement (Nextera Energy Inc), Merger Agreement (Energy Future Intermediate Holding CO LLC)
Interim Operations. (a) The Company covenants Versum and agrees Entegris each covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent Versum or Entegris, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1otherwise expressly contemplated by this Agreement or as set forth in Section 7.1(a) required by applicable Lawof such Party’s Disclosure Letter, (2i) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practice, Ordinary Course and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees Employees and business 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 its and its Subsidiaries’ present employees officers, Employees and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the generality of, of and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatof Section 7.1(a), from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless Parent shall otherwise approve w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) as approved in writing, writing by the other Party (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company such Party’s Disclosure Letter), the Company each Party, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to 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 materially impair the ability of such Party to consummate the Transactions, the Organizational Documents of any of such Party’s Subsidiaries;
(ii) other than in the Ordinary Course, except for any such transactions among its direct or indirect wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with any other Person, or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets outside of the Ordinary Course from any other Person (A) with a fair market value or purchase price in excess of $75 million in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), 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 such Party to consummate the Transactions, in each case, other than acquisitions of inventory or other goods in the Ordinary Course and transactions among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly-owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case issuance of clause (A)), shares (A) amend by its certificate direct or indirect wholly owned Subsidiary to it or another of incorporation its direct or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)indirect wholly owned Subsidiaries, (B) splitin respect of equity-based awards outstanding as of the date of this Agreement, combineor (C) granted in accordance with Section 7.1(b)(xvi) or pursuant to the Entegris ESPP, subdivide 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 reclassify its outstanding 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 Course on any of its assets or any of its Subsidiaries, except for Encumbrances (A) that are required by or automatically effected by Contracts in place as of the day hereof, (B) that do not materially detract from the value of such assets or (C) that do not materially impair the operations of such Party or any such transaction by a of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from Versum and any of its direct or indirect wholly owned subsidiary Subsidiaries or to or from Entegris and any of the Company which remains a its direct or indirect wholly owned Subsidiary after consummation Subsidiaries, as applicable, or in accordance with Section 7.1(b)(xvi)) in excess of such transaction), $10 million in the aggregate;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary Subsidiary) or modify in any material respect its dividend policy; provided, that (A) Entegris may make, declare and pay one regular quarterly cash dividend in each fiscal quarter in an amount per share of up to $0.07 per quarter with a record date consistent with the Company or record date for each quarterly period and (B) Versum may make, declare and pay one regular quarterly cash dividend in each fiscal quarter in an amount per share of up to $0.08 per quarter and with a record date consistent with the record date for each quarterly period, in each case, solely to the Company or extent (2I) normal semiannual cash dividends on such Party has given the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect other Party sufficient notice prior to the voting of its capital stockdeclaration date to enable the Parties to coordinate dividend payments in accordance with to Section 7.16 and (II) such payment is coordinated pursuant to, and permitted by, Section 7.16;
(viii) reclassify, split, combine, subdivide or redeem, purchase (Ethrough such Party’s share repurchase program or otherwise) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock, 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 shares of Versum Common Stock or Entegris Common Stock, as applicable, tendered by Employees in connection with a cashless exercise of Versum Options or Entegris Options, as applicable, outstanding as of the date hereof or in order to pay Taxes in connection with the exercise or vesting of Versum equity awards or Entegris equity awards, as applicable, outstanding as of the date hereof or granted in accordance with Section 7.1(b)(xvi), pursuant to the terms of the Versum Stock Plan or Entegris Stock Plan, as applicable, and the applicable award agreement, in the Ordinary Course;
(ix) 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 in excess of $25 million in the aggregate during any consecutive twelve (12) month period (other than capital expenditures within the thresholds set forth in Section 7.1(b)(ix) of such Party’s Disclosure Letter), (1B) pursuant expenditures not in excess of $10 million (net of insurance proceeds) in the aggregate that such Party reasonably determines are necessary to avoid a material business interruption or maintain the forfeiture of, safety and integrity of any asset or withholding property or (C) paid by any direct or indirect wholly owned Subsidiary to such Party or to any other direct or indirect wholly owned Subsidiary of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitssuch Party, in each case in accordance with past practice 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 terms other Party prior to making or agreeing to any such capital expenditure);
(x) other than in the Ordinary Course, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, adversely amend, modify, supplement or waive, terminate, assign, convey, 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 Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofContract, (B) grant or provide any transaction or retention bonuses non-exclusive licenses, covenants not to any director▇▇▇, officerreleases, employee waivers or other service provider of the Company non-exclusive rights under Intellectual Property owned by Versum and its Subsidiaries or Entegris or any of its Subsidiaries, as applicable, in each case, granted in the Ordinary Course, or (C) increase the compensation, bonus any agreement among such Party and its direct or pension, welfare indirect wholly owned Subsidiaries or other benefits of any director, officer among such Party’s direct or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its indirect wholly owned Subsidiaries;
(ivxi) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than in the ordinary course of business consistent Ordinary Course or with past practice in a principal amount respect to amounts that are not material 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 such Party and its Subsidiaries, taken as a whole, than existing Indebtednesscancel, 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 a maturity date the parameters set forth in Section 7.1(b)(xii) of such Party’s Disclosure Letter; provided that no more than 10 years 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, or, after the date of Effective Time, the Contract evidencing such IndebtednessCombined Company;
(xiii) materially amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(Bxiv) except enter into any material closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute materially in excess of the Bridge Facilityamount reserved therefore, in replacement 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 refinanceexist the creation of any Encumbrance upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for 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 any properties or assets (excluding capital stock of the Retained Subsidiariesnot including services) with a fair market value not in excess of $50,000,000 individually if the transaction is not 15 million in the ordinary course or $100,000,000 individually aggregate other than pursuant to Material Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on 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 existing terms of any Benefit Plan as in effect on the date hereof, as permitted under this Agreement or as required by applicable Law, increase or change the compensation or benefits payable to any Employee other than in the Ordinary Course; provided that, notwithstanding the foregoing, except as expressly disclosed in Section 7.1(b)(xvi) of such Party’s Disclosure Letter or required pursuant to a Versum Benefit Plan or Entegris Benefit Plan, as applicable, in effect as of the date of this Agreement, the Parties shall not: (A) grant any new long-term incentive or equity-based awards and or amend or modify the Company Stock Plansterms of any such outstanding awards under any Versum Benefit Plan or Entegris Benefit Plan, as applicable, (B) Investment Preferred Stock (as defined in the Bridge Facility) grant any retention or transaction bonuses, (C) increase or change the compensation or benefits payable to any executive officer (other than (x) changes in health and welfare benefits that are generally applicable to all salaried Employees in the Ordinary Course or (y) increases in the base salaries and benefits of any executive officer in the Ordinary Course), (D) terminate, enter into, amend or renew (or communicate any intention to take such action) 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 wholly owned Subsidiaries 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 Employee, (F) increase or change the severance terms applicable to any Employee, (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 used to calculate 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 Company or 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 individual;
(xvii) recognize any other wholly owned Subsidiary Labor Organization as the representative of any of the Company; provided thatemployees of the Party or its Subsidiaries, or become a party to, establish, adopt, amend, commence negotiations for or terminate any collective bargaining agreement or other similar written agreement with a Labor Organization, in each case, other than in the avoidance of doubt, granting customary profit participation rights Ordinary Course 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 as required by applicable Law;
(xviii) incur any Indebtedness (including the issuance of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any optionsdebt securities, warrants or other rights to acquire, acquire any debt security) or guarantee any such shares Indebtedness, except for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, 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 spend in excess of (A) $25,000,000 if the transaction is not Indebtedness for borrowed money incurred in the ordinary course Ordinary Course under Versum’s or Entegris’s, as applicable, revolving credit facilities 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 other lines of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value credit existing as of the date of this Agreement, (B) guarantees by Versum or any direct or indirect wholly owned Subsidiary of Versum of Indebtedness of Versum or any other direct or indirect wholly owned Subsidiary of Versum, (C) guarantees by Entegris or any direct or indirect wholly owned Subsidiary of Entegris of Indebtedness of Entegris or any other direct or indirect wholly owned Subsidiary of Entegris, (D) Indebtedness incurred in 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 in 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 (G) Indebtedness incurred by mutual agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made Parties in accordance with Section 5.01(b)(v7.7 or (H) and other than purchases and licenses of film and television and production programming (includinIndebtedness in
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Versum Materials, Inc.), Merger Agreement (Entegris Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after Between the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingClosing Date or the earlier termination of this Agreement, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) 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, (2) expressly required by the Transaction Documents (including in connection with Acquired Companies will, and TAT and Sellers will cause the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter)Acquired Companies to, the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 conduct their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 operations in the ordinary course of business consistent with past practice, (Eii) commercial paper issued 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 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 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 other assets to its equity holder(s) 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 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinpractices.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Transatlantic Petroleum Ltd.), Stock Purchase Agreement (Transatlantic Petroleum Ltd.)
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries thatexpressly contemplated, from and after the execution of required or permitted by this Agreement and prior to the First Effective Time Agreement, (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or conditioned), (iv) as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in set forth on Section 5.01(a) 6.1 of the Company Disclosure LetterSchedule, 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, that, with respect to actions taken or omitted to be taken in reliance on this clause (v), to the extent permitted under applicable Law and practicable under the circumstances, the Company shallshall provide prior notice to and consult in good faith with Parent prior to taking such action), 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 shall will cause each of its Subsidiaries to, use its and their commercially reasonable best efforts to (A) conduct their businesses in the Retained Business ordinary course of business and (B) 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, (v) as required by applicable Law, (w) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), (x) as set forth on Section 6.1 of the Company Disclosure Schedule, 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, and will cause its Subsidiaries not to:
(i) (x) adopt any change in the certificate of incorporation or bylaws of the Company or (y) adopt any change in the comparable organizational document of any of the Company’s Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, 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) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock 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 (A) any such transaction among the Company and its Subsidiaries or among the Company’s wholly owned Subsidiaries, (B) any issuance of Shares pursuant to exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms, or (C) incurrence of any Permitted Liens;
(iv) make 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 and (B) operating leases and extensions of credit terms to customers in each case in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cv) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise with respect to any combination thereof) in respect of any shares of its capital stock (stock, except for (1) any dividends or other distributions paid by a direct or indirect any wholly owned Subsidiary of the Company to another direct the Company or indirect to any other wholly owned Subsidiary of the Company Company;
(vi) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the 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 wholly owned Subsidiary of the Company such transaction by the Company or any other a wholly owned Subsidiary of the Company, (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Equity 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);
(iivii) merge create, incur, assume or consolidate with guarantee any Indebtedness for borrowed money or issue any debt securities or guarantees of the same or any other PersonIndebtedness, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: for (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowings in the ordinary course of business consistent with past practice 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 materially increase and is not reasonably expected to cause the cost of such Company Plan Payment Condition (as defined in the ABL Credit Agreement) to fail to be satisfied on, or benefits provided under such Company Plan based on as of, the cost on the date hereofClosing Date, (B) grant guarantees or provide credit support provided by the Company or any transaction or retention bonuses to any director, officer, employee or other service provider of its Subsidiaries of the obligations of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except Subsidiaries in the ordinary course of business consistent to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except clause (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 Indebtednessthis Section 6.1(b)(vii), 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 any Indebtedness solely among the Company and its wholly wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(viii) other than in accordance with the Company’s 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 the aggregate or capital expenditures as required on an emergency basis or for the safety of individuals or the environment;
(Dix) (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 other than in the ordinary course of business consistent with past practice, (EA) commercial paper issued 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 ordinary course prior written consent of business consistent with past practice Parent, or (B) amend, modify or waive in any material respect or terminate any Material Contract in a principal 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 not to exceed in excess of $250,000,000 1 million individually or $5 million in the aggregate at other than (A) any time outstandingsettlement 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 (For the notes thereto) Indebtednessof 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 proceeds settlement or compromise of which will be used to finance all such Action does not (x) impose any non-de minimis restriction on the business 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations operations of the Company or any of its Subsidiaries with respect to such Indebtedness (or Parent or any of its Subsidiaries after the Closing) and Parent and its Subsidiaries(y) include any non-de minimis non-monetary or injunctive relief, includingor the admission of wrongdoing, 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 by 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 any of its Subsidiaries or on terms substantially consistent with any of their respective officers 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 practicedirectors;
(vxii) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 respect to the Retained Business, transfersell, lease, license, sell, assign, let lapseencumber (other than Permitted Liens), abandon, cancelpermit to lapse, mortgage, pledge, place a Lien upon or otherwise dispose of any material assets or property (including any material Intellectual Property; provided that this clause (viProperty Rights) shall not restrict except (A) ordinary course non-exclusive licenses pursuant to existing contracts or ordinary course security interests in connection with the production commitments (or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Propertyrefinancings thereof), (B) as may be required by a Governmental Authority to permit or facilitate the granting consummation of the Merger or any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per licenseother transactions contemplated in this Agreement solely to the extent required pursuant to Section 6.5, (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 $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries or among the Company’s wholly owned Subsidiaries, or (D) 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) licenses, sales, letting lapse, abandonment and cancellations impair the ability of Intellectual Property that is used the Merger to be consummated in compliance with any “merger” or held for use exclusively “fundamental changes” covenant in the SpinCo Business and Existing Credit Documents or (E) Affiliation Agreementsamend 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;
(viixvi) with respect to implement or announce any permanent plant closings or permanent facility shutdown that would implicate 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 WARN Act;
(including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (Axvii) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not than in the ordinary course of business or $100,000,000 individually in consistent with past practice (A) change or revoke any event or material Tax election; (B) transactions among change any annual Tax accounting period or material method of Tax accounting, (C) file any material amended Tax Return, (D) settle or compromise any material claim related to Taxes for an amount materially in excess of amounts reserved, (E) enter into any material closing agreement or (F) surrender any right to claim a material Tax refund, offset or other reduction in liability for an amount materially in excess of amounts reserved (it being agreed and understood that, notwithstanding any other provision, neither Section 6.1(b)(xi) nor Section 6.1(b)(xviii) (insofar as it relates to Section 6.1(b)(xi)) shall apply to Tax compliance matters); or
(xviii) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Parent or 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 Retained 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.
(viiid) except with respect Subject to SpinCo the terms of this Agreement, including Section 6.5 and the SpinCo SubsidiariesSection 6.13, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on from the date of this Agreement in accordance with until the existing terms Effective Time, none of Parent, Merger Sub or their respective Subsidiaries shall (i) knowingly take any action that would prevent, materially delay or materially 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 awards and the Company Stock Plansa Specified Acquisition, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided thatapplicable, 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, 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;
transactions contemplated by this Agreement, including the Merger; or (xiii) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses take any action that would reasonably be expected to prevent, materially impair or materially delay the consummation of film and television and production programming (includinthe Merger or the satisfaction of any of the closing conditions thereto.
Appears in 2 contracts
Sources: Merger Agreement (CD&R Associates VIII, Ltd.), Merger Agreement (Cornerstone Building Brands, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing (which such approval shall not be unreasonably withheld, conditioned or delayed), and except (i) as otherwise expressly contemplated by this Agreement), (1ii) as required by applicable Law, Laws and (2iii) 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 disclosed set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter), the business of the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct taken as a whole (the Retained Business “Business”) shall be conducted in the ordinary and usual course of business consistent with past practicepractice in all material respects and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their collective business organizations intact, maintain their material Licenses that are integral to the Retained Business, subject operation of the Business as currently conducted and keep available the services of its and its Subsidiaries’ present employees and agents who are integral to compliance with the specific matters set forth below, operation of the Businesses as currently conducted and use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ maintain, in all material respects, existing relations and goodwill with Governmental Entities, customers, suppliers, distributorsdistributors and employees whom, licensorsin the reasonable discretion of the Company, creditors, lessors, employees and business associates and others having material business dealings are currently engaged in relationships with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available Company and/or its Subsidiaries that are integral to the services operation of the Business as currently conducted; provided, however, that any action which the Company and and/or its Subsidiaries’ present employees and agentsSubsidiaries is permitted to take pursuant to Section 6.1(b) in accordance with the terms thereof shall not be deemed to be a breach of this Section 6.1(a).
(b) Without limiting In furtherance of the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatforegoing Section 6.1(a), from and after the date of hereof until the Effective Time, except (A) as otherwise expressly contemplated by this Agreement and prior to the First Effective Time Agreement, (unless B) as required by applicable Law, (C) as Parent shall otherwise may approve in writing, writing (which such approval shall not be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b6.1(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (by-laws or comparable governing documents) (similar organizational documents other than amendments any administrative or ministerial changes made to the governing any certificate of incorporation or by-laws or similar organizational documents of any Subsidiary of the Company that which is not otherwise restricted under any other clause of this Section 6.1(b);
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or liquidate all or a material part of its assets;
(iii) acquire assets outside of the ordinary course of business from any other Person, other than (i) acquisitions pursuant to Contracts in effect as of the date hereof and related to matters described in Section 6.1(a)(iii) of the Company Disclosure Letter and (ii) acquisitions pursuant to which the total value or purchase price paid or payable by the Company and its Subsidiaries would not preventexceed $2,000,000, delay individually or impair in the Initial Merger aggregate;
(iv) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, or authorize the other Transactions)issuance, (B) splitdelivery, combinesale, subdivide pledge, disposition, grant, transfer, or reclassify its outstanding encumbrance of, any shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains or any of its Subsidiaries (other than the issuance of shares by a wholly wholly-owned Subsidiary after consummation of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such transactioncapital 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 in respect of Company Options, Company RSUs and/or the Company Warrant 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;
(v) make any loans or advances to any Person (other than advances made in the ordinary course of business consistent with past practice to employees of the Company and its Subsidiaries for reimbursement of expenses, including relocation expenses, in amounts not to exceed $250,000 individually or $2,000,000 in the aggregate for all such advances) or any capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company), ;
(Cvi) (A) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary), (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 split, combination or reclassification of capital stock of any wholly-owned Subsidiary of the Company, or any issuance of any securities of a wholly-owned Subsidiary of the Company to the Company or another direct or indirect wholly wholly-owned Subsidiary of the Company Company, (ii) purchases, redemptions or to other acquisitions of capital stock or other securities (y) permitted by the terms of the Stock Plans or (z) permitted 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 compliance with this Section 6.1) between the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) any of its Subsidiaries and any director or employee of the Company Disclosure Letter)or any of its Subsidiaries, or (Diii) the issuance of Shares in respect of Company Options, Company RSUs and/or the Company Warrant 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, or (C) enter into any agreement with respect to the voting of its capital stock;
(vii) incur any indebtedness for borrowed money, assume, guarantee, endorse or otherwise become responsible for any indebtedness of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, enter into any “keep well” or other Contract to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing that, individually or in the aggregate, exceeds $5,000,000;
(viii) make or authorize any payment of, or accrual or commitment for, any capital expenditure in excess of $4,000,000 in the aggregate;
(Eix) purchase, repurchase, redeem or otherwise acquire enter into (A) any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock Contract that would have been a Material Contract (other than any Contract described in clause (1D) pursuant of Section 5.1(l)(i)) had it been entered into prior to the 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 (2B) purchasesany Company Intellectual Property Agreement, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions (in the case of the type contemplated by Section 5.01(b)(viiclause (B) or Section 5.01(b)(ixonly) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase practice;
(x) make any changes with respect to accounting policies or procedures, except to the cost extent required by GAAP or SEC rules and regulations;
(xi) settle or compromise, or offer or propose to settle or compromise, any actions, suits, claims, hearings, arbitrations, litigations, investigations or other proceedings before a Governmental Entity (each a “Proceeding”) if the foregoing would (A) require the payment of monetary damages by the Company or any of its Subsidiaries after the date hereof of any amount in excess of $1,000,000 per Proceeding or $5,000,000, in the aggregate, for all such Proceedings, net of applicable reserves as set forth in the consolidated balance sheet of the Company Plan as of September 30, 2012 and any applicable insurance coverage, or benefits provided under such Company Plan based (B) involve any injunctive or other non-monetary relief which, in either case, imposes material restrictions on the cost on business operations of the date hereofCompany and its Subsidiaries, taken as a whole;
(xii) (A) make, change or rescind any material Tax election, (B) grant or provide file any transaction or retention bonuses to any director, officer, employee or other service provider material amended Tax Return of the Company or any of its the Subsidiaries, (C) increase adopt or change any material method or period of Tax accounting, (D) settle or compromise any material Tax claim, (E) surrender any material 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, or (H) consent to any extension or waiver of the compensationlimitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business);
(xiii) transfer, bonus sell, lease, assign, license, mortgage, subject to Liens (other than Permitted Liens), pledge, surrender, encumber, divest, cancel, abandon or pensionallow to lapse or expire or otherwise dispose of any assets (including Intellectual Property), welfare licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries that would, individually or in the aggregate, exceed $1,000,000, other than in the ordinary course of business consistent with past practice;
(xiv) except as required pursuant to existing written, binding agreements in effect prior to the date hereof and set forth in Section 5.1(j) of the Company Disclosure Letter, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits of to any director, officer or employee of the Company or any of its Subsidiaries, except (B) increase in any manner the ordinary course of business consistent with past practice with respect to (1) employees below the 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 bonus, pension, welfare welfare, fringe, severance or other benefits prior to such changeof, (D) increase the severance pay any bonus to, or termination payments or benefits payable make any new equity awards to any current or former director, officer, employee or other service provider consultant of the Company or any of its Subsidiaries, (EC) become a party to, establish, adopt, commence participation in, amend or terminate any stock option plan or other stock-based compensation plan, or any compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any current or former directors, officers, employees or consultants of the Company or its Subsidiaries (or newly hired employees) or amend the terms of any outstanding equity-based awards, (D) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan Benefit Plan, to the extent not already provided in any such Benefit Plan, (including E) enter into any equity-based awards)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 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 or determined, except as may be required by GAAP, (G) terminate without cause the employment of any executive officer of the Company, or (H) forgive any loans or issue any loans to directors, officers or employees of the Company or any of its Subsidiaries;
Subsidiaries (iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than travel and relocation expense advances in immaterial amounts made 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 employees of the Company and its Subsidiaries);
(xv) implement or announce any plant closing, taken as a wholematerial reduction in labor force or other layoffs of employees that would be expected to incur liability under the WARN Act (or any similar state, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (Blocal or foreign Law) except with respect to the Bridge FacilityCompany or any of its Subsidiaries;
(xvi) enter into any joint venture through a general partnership, in replacement oflimited partnership, limited liability company or to refinancesimilar strategic alliance vehicle or other similar arrangement, existing Indebtedness on then prevailing market terms with any Person (for purposes of clarity, the foregoing does not include any advertising, content, affiliate, marketing or on terms substantially consistent with or more beneficial to supplier agreements entered into by 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 business, whether or not referred to colloquially as partnerships, strategic relationships or otherwise described with past practice, similar phrases);
(Exvii) commercial paper issued in enter into any Contract or transaction between 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 Company or any portion of its Subsidiaries, on the Dividend one hand, and any (and fees and expenses in connection therewithi) officer 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations director of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (Gii) Indebtedness under the Bridge Facility, refinancings Affiliate or replacements thereof and of commitments thereunder, and any refinancings or replacements family member of any such refinancing officer or replacement Indebtedness; provided that director or (iii) record or beneficial owner of five percent (5%) or more of the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 voting securities of the Company Disclosure Letter; providedor any Affiliate or family member of such record or beneficial owner, further, that on 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 thereofother hand, in each case, so long as case of a type that would be required to be disclosed under Item 404 of Regulation S-K under the aggregate principal amount thereof does not exceed $2,500,000,000, Securities Act (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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) grants of Company Options made to new hires in connection a manner and amount generally consistent with the repair or replacement of facilitiespast practice, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or and (B) in the ordinary course grants of business consistent with past practice and in the aggregate not in excess Company RSUs made to members of 120% of the amounts reflected in the Company’s capital expenditure budget for each board of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;directors on their respective appointment anniversary dates); or
(vixviii) with respect to the Retained Businessagree, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (KAYAK Software Corp), Merger Agreement (Priceline Com Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date hereof and until the earlier of the termination of this Agreement and pursuant to its terms or the Effective Time, except as otherwise expressly contemplated by this Agreement or as required by applicable Laws, without the prior to the First Effective Time written consent of Parent (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed), and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) business of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use commercially their respective reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior until the earlier of the termination of this Agreement pursuant to its terms or the First Effective Time Time, except (unless A) as otherwise expressly required by this Agreement or required by Law, (B) as Parent shall otherwise may approve in writing, writing (which approval shall not be unreasonably withheld, conditioned withheld or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation incorporation, by-laws or bylaws (or comparable other applicable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), instruments; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends stock; or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture ofrepurchases or redemptions of restricted stock or other equity awards upon termination of employment, 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Companysuch awards);
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly-owned Subsidiaries, or 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 otherwise enter into any agreements or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongarrangements imposing material changes or restrictions on its assets, operations or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not spend in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 6,500,000 individually or $200,000,000 10,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses assets 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 its Retained Subsidiaries shall enter into make any such transaction acquisition that would, or would reasonably be expected to, likely to prevent, materially delay or materially impair the consummation Company’s ability to consummate the transactions contemplated by this Agreement; and provided, further, that the Company must also comply with the requirements set forth in Section 6.1(a)(iii) of the TransactionsCompany Disclosure Letter. For purposes of this clause (iii), the amount spent with respect to any acquisition shall be deemed to include the aggregate amount of capital expenditures that the Company or any of its Subsidiaries is obligated to make at any time or plans to make as a result of such acquisition within two (2) years after the date of acquisition;
(iv) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any of its debt securities or of any of its Subsidiaries, except for (A) drawings under and refinancings or replacements of the Company’s or any of its Subsidiaries’ current credit agreements in an amount not to exceed $25,000,000 in the aggregate at any one time outstanding, provided that the terms of any such replacement must satisfy the requirements set forth in Section 6.1(a)(iv) of the Company Disclosure Letter, (B) other indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed $10,000,000 in the aggregate or (C) interest rate or currency swaps on customary commercial terms consistent with past practice and in compliance with its risk management policies in effect on the date of this Agreement and not to exceed $5,000,000 of notional debt in the aggregate;
(v) make or commit to any capital expenditures other than in the ordinary course of business and in any event not in excess of the aggregate amount reflected in the Company’s capital expenditure budget for the year in which such capital expenditures are made, a copy of which capital expenditure budget for 2010 and 2011 has been furnished to Parent;
(vi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets, except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $10,000,000 in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement;
(vii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any its Subsidiaries (other than the issuance of shares by a 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, other than (A) the issuance of Company Shares pursuant to existing Company Options, Company Warrants, and other Company Awards, and (B) the issuance of Company Options and Company Awards in amounts and at times consistent with the Company’s historic hiring and compensation practices and not in excess of the amount set forth on Section 6.1(a)(vii) of the Company Disclosure Letter;
(viii) make any change with respect to accounting policies or procedures, except as required by changes in GAAP or by Law;
(ix) except as required by Law, (A) make any material Tax election or take any position on any Tax Return filed on or after the date of this Agreement or adopt any method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (B) settle or resolve any material Tax controversy, claim or assessment, (C) enter into any material closing agreement, (D) waive or extend any statute of limitations with respect to Taxes, or (E) surrender any right to claim a refund for Taxes;
(x) make any loans, advances or capital contributions to or investments in any Person (other than capital expenditures the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $1,000,000 individually or $2,000,000 in the aggregate;
(xi) enter into (A) any non-competition Contract or other Contract that (x) purports to limit in any material respect either the type of business in which the Company or its Subsidiaries (or, after the Effective Time, Parent or its Affiliates) may engage or the manner or locations in which any of them may so engage in any business or (y) could require the disposition of any material assets or line of business of the Company or its Subsidiaries or, after the Effective Time, Parent or its Affiliates, (B) any other Contract that would have been a Material Contract had it been entered into prior to the date hereof;
(xii) except as required pursuant to Contracts in effect as of the date of this Agreement and set forth in Section 6.1(a)(xii) of the Company Disclosure Letter, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any of its directors, officers or employees, (B) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its directors, officers or employees, except, in each case, for increases or awards made in accordance the ordinary course of business and at times and in amounts consistent with the Company’s historic hiring and compensation practices as described in Section 5.01(b)(v6.1(a)(xii) of the Company Disclosure Letter, (C) establish, adopt, amend or terminate any Company Compensation and Benefit Plan or amend the terms of any outstanding equity-based awards, (D) except as provided in Section 4.4(f), 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 Company Compensation and Benefit Plans, to the extent not already provided in any such Company Compensation and Benefit Plan, (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Compensation and Benefit Plan or 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 (F) forgive any loans to any of its or of any of its Subsidiaries’ directors, officers or employees;
(xiii) amend, modify or terminate any Material Contract (excluding customer or supplier contracts entered into in the ordinary course of business), or cancel, modify or waive any debts or claims held by it or waive any rights other than purchases in the ordinary course of business having a value in excess of $1,000,000 in the aggregate;
(xiv) 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, including the acquisition of any business or assets reasonably likely to have such an effect;
(xv) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity if such settlements would exceed $1,000,000 in the aggregate; or
(xvi) agree, authorize or commit to do any of the foregoing.
(b) After the date hereof and licenses until the earlier of film the termination of this Agreement pursuant to its terms or the Effective Time, Parent will not and television will not permit its Subsidiaries knowingly to 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, including the acquisition of any business or assets reasonably likely to have such an effect. Notwithstanding the foregoing and production programming for the avoidance of doubt, the foregoing shall not apply to any pending or planned (includini) strategic engagement or investment, (ii) joint venture, (iii) acquisition or (iv) other similar transactions, that in the case of any transaction described in any of clauses (i) through (iv) of this Section 6.1(b), has been publicly announced prior to the execution of this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (Verifone Systems, Inc.), Merger Agreement (Hypercom Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use 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 otherwise expressly required by this Agreement or as required by a Governmental Entity or applicable Law, conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business and, to the extent consistent with past practicetherewith, shall use and the Company shall, and shall cause each of its Subsidiaries 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 efforts to preserve the Retained Businessmaintain its and its Subsidiaries’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customersclients, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business 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, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatforegoing sentence, from and after the date hereof until the earlier of the Closing and the termination of this Agreement, except as 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 (correct and prior complete copies of which have been made available to Purchaser) or entered into following the First Effective Time date of this Agreement in accordance with the terms of this Section 3.1, as approved in writing by Purchaser (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed set forth in Section 5.01(b3.1(b) of the Company Disclosure Letter)Schedule, the Company shall not and shall cause its Subsidiaries not permit to:
(1) adopt or propose any change in its Organizational Documents (other than to correct scrivener’s errors or immaterial or ministerial amendments);
(2) merge or consolidate with any other 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 Subsidiaries to: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;
(i4) except issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or otherwise enter into any contract or other agreement, understanding or arrangement (whether oral or written) with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A))voting of, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except of the Company or capital stock or other equity interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such transaction 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 (A) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (I) by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to the Company or another direct or indirect wholly owned Subsidiary of the Company 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 to consultant benefit plan or program of or assumed by the Company or (2) normal semiannual cash dividends 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 Common Stock as described 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 any acquisition contract in effect prior to the date of this Agreement or entered into following the date of this Agreement in accordance with the terms of this Section 5.01(b)(i3.1 or (B) proxies or voting agreements solicited by or on behalf of the Company Disclosure Letterin connection with the 20% Approval);
(5) reclassify, (D) enter into split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any agreement with respect to the voting of its capital stock, other equity interests or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (or other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitsequity interests, in each case except in accordance connection 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary tax withholding obligations of the Company);
(ii6) merge or consolidate with incur any other Personindebtedness for borrowed money in excess of $10,000,000 in the aggregate, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: for (A) establish, adopt, amend or terminate any material Company Plan or amend the terms indebtedness in replacement of any outstanding equity-based awards other than any such action taken existing indebtedness for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 borrowed money on terms substantially consistent with or more beneficial favorable 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 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinreplaced,
Appears in 2 contracts
Sources: Investment Agreement (AlTi Global, Inc.), Investment Agreement (AlTi Global, Inc.)
Interim Operations. (a) The From the date of this Agreement until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company covenants and agrees as to itself and each of its Subsidiaries thatthat it will use its commercially reasonable efforts, from and after the execution date of this Agreement and prior to until the First Effective Time (Time, unless Parent shall otherwise approve in writing, which approval to cause the business of it and its Subsidiaries to be conducted, in all material respects, in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall not be unreasonably withhelduse their respective commercially reasonable efforts to (a) preserve their business organizations, conditioned or delayed, assets and except as (1) required by applicable Lawlines of business intact, (2b) expressly required 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 the Company and its Subsidiaries, taken as a whole, used by the Transaction Documents (including in connection with the Separation Company and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts and necessary to conduct the Retained Business its business in the ordinary course of business consistent with past practicepractice (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 the Company shall, (d) maintain in all material respects its and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ their existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement in accordance with its terms, except (unless A) as otherwise expressly required by this Agreement, (B) as Parent shall otherwise approve may consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable LawLaws or definitive interpretations thereof or by any Governmental Entity, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b) 4.1 of the Company Disclosure Letter), the Company shall not will not, and shall will not permit any of its Subsidiaries Subsidiaries, to:
(i) except with respect adopt any amendments to SpinCo and the SpinCo Subsidiaries (other than its charter or bylaws or, in the case of clause any Subsidiary that is not a corporation, similar applicable organizational documents;
(A)), ii) (A) amend its certificate adopt a plan of incorporation complete or bylaws (partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or comparable governing documents) other reorganization (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactionsthis Agreement), (B) splitacquire by merging or consolidating with, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary purchasing an equity interest in or portion of the Company which remains a wholly owned Subsidiary after consummation assets of such transaction(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) declaretake or omit to take any action that would cause any rights under Material Intellectual Property, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement including with respect to the voting of its capital stockany registrations or applications for registration, to lapse, be abandoned or cancelled, or (E) purchasefall into the public domain, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, actions 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan omissions in the ordinary course of business consistent with past practice that does and not materially increase the cost otherwise in violation of such Company Plan this Section 4.1, or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance enter into a joint venture or termination payments partnership or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equitysimilar third-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesparty business enterprise;
(iviii) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtednessassets or capital stock from any other Person, except (A) in the ordinary course other than acquisitions 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 assets in the ordinary course of business consistent with past practice;
(viv) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 respect to the Retained Business, transfer, lease, licenseissue, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sellof, grant, transfer, or encumber, or authorize the issuance, deliverysale, salepledge, disposition, grant, transfer or encumbrance of, any shares of its capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options and the settlement of RSU Awards and PSU Awards (and dividend equivalents thereon, if applicable) outstanding on the date of this Agreement or (B) the issuance of shares of capital stock 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 forfor any shares of such capital stock, or any options, warrants or other rights of any kind to acquireacquire 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, make any such sharesloans, except advances or capital contributions to or investments in any Person;
(vi) (A) declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or other property, with respect to its capital stock, except for dividends by any wholly owned direct or indirect Subsidiary of the Company to the Company or any other wholly owned direct or indirect Subsidiary of the Company, (B) split, combine or reclassify the Shares issued pursuant or any other outstanding capital stock of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution therefor, (C) redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of the Company, except for acquisitions, or deemed acquisitions, of Shares or other equity securities of the Company in connection with (1) the satisfaction of Tax withholding obligations with respect to Company Restricted Stock UnitsOptions, RSU Awards or PSU Awards outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Performance Stock Units and Company Deferred Stock Units Options outstanding on the date of this Agreement with Shares (including in accordance connection with “net exercises”) and (3) forfeitures of Company Options, RSU Awards or PSU Awards outstanding on the existing 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 such awards and any Indebtedness, other than Indebtedness incurred under existing revolving credit facilities of the Company Stock Plansfor working capital purposes in the ordinary course of business in an amount not to exceed $150,000,000 in the aggregate (provided that Parent’s prior written consent shall be required in respect of any incremental incurrence of Indebtedness thereunder in excess of $5,000,000). “Indebtedness” of any Person means (A) all indebtedness for borrowed money, (B) Investment Preferred Stock (as defined in the Bridge Facility) any other indebtedness which is evidenced by a note, bond, indenture, debenture or similar Contract, (C) by wholly owned Subsidiaries all capitalized lease obligations of such Person or obligations of such Person to pay the Company or to any other wholly owned Subsidiary deferred and unpaid purchase price 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);
(ix) with respect to the Retained Businessproperty and equipment, 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 spend in excess of (A) $25,000,000 if the transaction is not trade payables incurred 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 of business, whether by merger(D) all obligations of such Person pursuant to securitization or factoring programs or arrangements, consolidation(E) all guarantees and arrangements having the economic effect of a guarantee of such Person of any other Indebtedness of any other Person, purchase (F) net cash payment obligations of property such Person under swaps, options, derivatives and other hedging agreements or assets, licenses or otherwise arrangements that will be payable upon termination thereof (valuing any non-cash consideration at its fair market value as of assuming they were terminated on the date of the agreement for determination), and (G) reimbursement obligations under (i) letters of credit, bank guarantees and other similar contractual obligations entered into by or on behalf of such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldPerson or (ii) surety, customs, reclamation or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) performance bonds other than capital expenditures made those entered into in accordance the ordinary course of business consistent with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinpast practice;
Appears in 2 contracts
Sources: Merger Agreement (QXO, Inc.), Merger Agreement (QXO, Inc.)
Interim Operations. (a) The Company Debtor covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time Closing, except (unless i) as otherwise expressly required or contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and except (iii) as (1) otherwise required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) Laws or (3iv) otherwise expressly disclosed as set forth in Section 5.01(a) 4.1 of the Company Debtor Disclosure Letter), the Company shall, and Business shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business be conducted in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to consistent therewith, the Retained Business, subject to compliance with the specific matters set forth below, Debtor and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization intact their business organizations intact, preserve governmental licenses, permits, consents, approvals, authorizations and qualifications and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providersassociates, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Closing, except (unless i) as otherwise expressly required or contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) otherwise required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Laws or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 4.1 of the Company Debtor Disclosure Letter), the Company shall Debtor will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 by-laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Debtor or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate the Debtor or any of its Subsidiaries or otherwise enter into any agreements providing for the sale of their respective material assets, operations or business (other than transactions the sale or disposition of obsolete or worn-out assets in 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 ordinary course of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactionsbusiness);
(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;
(iv) acquire any corporation, partnership or other business organization or division thereof or collection of assets constituting all or substantially all of a business or business unit, whether by merger or consolidation, purchase of substantial assets or equity interest or any other manner, from any other Person;
(v) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Debtor or any of its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Debtor to the Debtor or another wholly-owned 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;
(vi) 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 any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Debtor or any direct or indirect wholly-owned Subsidiary of the Debtor);
(viii) 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 as expressly required for dividends paid by any Company Plan as in effect on direct or indirect wholly-owned Subsidiary to the date hereof: Debtor or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than the Restructuring Support Agreement);
(ix) 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;
(x) incur any 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 action taken indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Debtor or any of its Subsidiaries, except for purposes of replacing, renewing or extending a broadly applicable material Company Plan indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice that does (A) not materially increase to exceed $2,000,000 in the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofaggregate, (B) grant guarantees incurred in compliance with this Section 4.1 by the Debtor of indebtedness of wholly-owned Subsidiaries of the Debtor or provide (C) indebtedness owed to the Debtor or another wholly-owned Subsidiary of the Debtor;
(xi) 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 any transaction capital expenditure in excess of $2,000,000 in the aggregate, excluding any capital expenditure required by any Contract set forth on Section 4.1(a)(xi) of the Debtor Disclosure Letter or retention bonuses capital expenditure determined in good faith by the Debtor Board to be required for (A) the protection of, or to avoid injury to, any Person, (B) the care or safety of any patient under the care of any facility operated by the Debtor or any of its Subsidiaries or (C) compliance with Law;
(xii) 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 material accounting policies or procedures, except as required by changes in applicable Law or GAAP;
(xiv) settle any litigation or other Proceeding brought against the Debtor or its Subsidiaries by a Governmental Entity (A) for an amount in excess of $100,000 individually or $1,000,000 in the aggregate for all such Proceedings (other than any resolution of claims processing for government reimbursement in the ordinary course of business, 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 in excess of $500,000 individually or $8,000,000 in the aggregate for all such Proceedings in any one-calendar-month period (in each case, with respect to Proceedings in the state of Pennsylvania, net of applicable insurance proceeds) 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;
(xvi) 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);
(xviii) transfer, sell, lease, license, mortgage, pledge, divest or otherwise dispose of any material tangible or intangible assets (including Intellectual Property Rights), licenses, operations, rights, product lines, businesses or interests therein of the Debtor or its Subsidiaries, including the capital stock of any of its Subsidiaries, except in connection with services provided in the ordinary course of business 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) increase or accelerate the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any director, officer, officer or employee or other service provider of the Company Debtor or any of its Subsidiaries, (C) increase grant any new awards, or amend or modify the compensation, bonus or pension, welfare or other benefits terms of any directoroutstanding awards, officer under any Company Plan (other than grants of any new awards to any individual whose hiring is not restricted by, or employee of the Company or any of its Subsidiarieswho is otherwise hired in accordance with, except in the ordinary course of business consistent with past practice with respect to clause (1H) employees below the 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 changebelow), (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) 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 benefits under any Company Plan (including any equity-based awards)Plan, (FE) change any actuarial or other assumptions used to calculate funding obligations with respect to any 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 determined, except as may be required by the terms of any existing Company Plan set forth on Section 2.1(h)(i) of the Debtor Disclosure Letter or GAAP, (GF) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to directorsany director, officers officer or employees employee of the Company Debtor or any of its Subsidiaries;
, (ivG) incur terminate the employment of any Indebtedness officer of the Debtor or issue its Subsidiaries other than for “cause”, (H) hire (x) any warrants 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 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 (x) 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 Plans, nondiscretionary severance payments under existing Company Plans, and nondiscretionary payments of nonqualified deferred compensation (other rights than as set forth on Section 4.1(a)(xix)(I) of the Debtor Disclosure Letter) or as otherwise required by applicable Law; provided that payment in respect of any severance or nonqualified deferred compensation amount in excess of $200,000 shall be subject to acquire any Indebtednessprior notice and consultation with Parent and, except with respect to clauses (A) through (H) above,
(1) amendments to welfare plans in the ordinary course of business, consistent with past practices that do not materially increase the costs of such welfare plans, (2) with respect to any hourly employees and salaried facility-level employees of the Debtor or its Subsidiaries, and any other employees of the 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 otherwise as reasonably determined by the CRO, in consultation with the QCP Consultants, to be necessary to respond to market demand, (3) with respect to each other employee of the Debtor or its Subsidiaries whose annual base salary exceeds $150,000 (other than any Eligible Employee), increases in compensation in the ordinary course of business consistent with past practice in a principal amount that do not to exceed $400,000,000 in 1.5% of the aggregate at annual base salaries of such other employees or 7.5% of the annual base salary for any time outstanding on prevailing market terms individual and (4) as required pursuant to existing Company Plans, or on terms as otherwise required by applicable Law;
(xx) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, 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 use or otherwise exploit any material Intellectual Property Rights;
(xxii) fail to use commercially reasonable efforts to keep in full force the material Insurance Policies under substantially consistent with or more beneficial to the Company same levels of coverage as the current policies of the Debtor and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date ;
(xxiii) change in any material respect any of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, Debtor’s 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 ’ material policies or refinanced, and in each case with a maturity date no more than 10 years after the date procedures for or timing of the Contract evidencing such Indebtednesscollection of accounts receivable (or any other trade receivables), payment of accounts payable (C) intercompany Indebtedness among the Company or any other trade payables), billing of its customers, pricing and its wholly owned Subsidiariespayment terms, (D) (1) to the extent not drawn upon and cash collections, cash 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 programsterms with suppliers, in each case issuedcase, made other than changes required by suppliers, vendors and service providers;
(xxiv) dismiss the QCP Consultants other than in accordance with Section 5.1(b);
(xxv) modify or entered into amend 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 any respect any Contract pursuant 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company HCR III or any of its Subsidiaries with respect currently subleases real property to such Indebtedness (and Parent and its 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 other Subsidiary of the Company Disclosure LetterDebtor; 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;or
(vxxvi) with respect to the Retained Businessagree, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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;foregoing.
(vib) 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 material Intellectual Property; provided that this clause (vi) Parent shall not restrict (A) ordinary course non-exclusive licenses knowingly take or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 permit any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or take any action that is reasonably likely to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay prevent or materially impair impede the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 2 contracts
Sources: Plan Sponsor Agreement, Plan Sponsor Agreement (Quality Care Properties, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, that from and after the execution date of this Agreement and prior to until the First Effective Time (Time, unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and except as (1) otherwise expressly contemplated by this Agreement or as required by applicable LawLaw or Contracts existing as of the date of this Agreement, (2) 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 disclosed in Section 5.01(a) business of the Company Disclosure Letter)and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business efforts, when in the ordinary course best interests of business consistent with past practice, and the Company shalland its Subsidiaries, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ their existing relations and goodwill with Governmental EntitiesEntities with jurisdiction over health-care related matters, customers, manufacturers (which shall not include the payment of additional money or concessions other than pursuant to existing contractual terms), suppliers, distributors, licensors, creditors, lessors, lessors and employees and business 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 present employees and agents of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless i) as otherwise expressly contemplated by this Agreement or as required by Contracts existing as of the date of this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3iii) otherwise expressly disclosed as set forth in Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws by laws or other applicable governing instruments or amend any term of the Shares, other than in furtherance of this Agreement;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company that are not obligors or guarantors of third-party indebtedness, or adopt a plan of liquidation;
(iii) except as set forth in Section 6.1(a)(xi), acquire assets outside of the ordinary course of business from any other Person with an aggregate value or purchase price in excess of $750,000, other than capital expenditures within the Company’s capital expenditure budget as set forth in Section 6.1(a)(xi) of the Company Disclosure Letter;
(iv) enter into any material line of business other than the line of business in which the Company and its Subsidiaries is currently engaged as of the date of this Agreement or, except for the products set forth in Section 6.1(a)(iv) of the Company Disclosure Letter, distribute products other than the products that the Company and its Subsidiaries are currently distributing as of the date of this Agreement;
(v) other than the issuance of Shares (i) pursuant to the ESPP as contemplated by Section 4.5 or (ii) pursuant to Company Options granted prior to the date of this Agreement or as contemplated by Section 6.1(a)(xix), issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments to the governing documents issuance of any shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair another wholly owned Subsidiary of the Initial Merger or the other TransactionsCompany), (B) split, combine, subdivide or reclassify its outstanding securities convertible or exchangeable into or exercisable for any shares of such capital stock stock, or any Rights;
(except for vi) other than in the ordinary course of business, create or incur any such transaction by a wholly owned subsidiary Lien (other than Permitted Liens) material to the Company or any of its Subsidiaries on any assets used in the businesses of the Company which remains or any of its Subsidiaries having a value in excess of $500,000;
(vii) make any loans, advances or capital contributions to, or investments in, any Person (other than the Company or any direct or indirect wholly owned Subsidiary after consummation of such transaction), the Company) in excess of $500,000 in the aggregate;
(Cviii) declare, set aside or pay any dividend or distribution payable (whether in cash, stock or property (or any combination thereof) in with respect of to any shares of its capital stock (of any Subsidiary, except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary Subsidiaries of the Company and pro rata dividends or distributions payable to another direct or indirect holders of interests in non-wholly owned Subsidiary Subsidiaries;
(ix) reclassify, split (including a reverse split), recapitalize, subdivide or repurchase, redeem or otherwise acquire, directly or indirectly, any of its capital stock or Rights;
(x) incur any indebtedness for borrowed money 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) in the ordinary course of business not to exceed $500,000 in the aggregate or indebtedness for borrowed money incurred under existing credit facilities, (B) refinancings on commercially reasonable terms or (C) guarantees by the Company of indebtedness of wholly owned Subsidiaries of the Company or guarantees by Subsidiaries of indebtedness of the Company;
(2xi) normal semiannual cash dividends on the Common Stock except as described set forth in Section 5.01(b)(i6.1(a)(xi) of the Company Disclosure Letter, make or authorize any capital expenditure in excess of $750,000;
(xii) other than in the ordinary course of business, 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 as permitted elsewhere in this Section 6.1(a));
(xiii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or except as the Company, based upon the advice of its independent auditors after consultation with Parent, determines in good faith is advisable to conform to best accounting practices;
(xiv) except as set forth in Section 6.1(a)(xiv) of the Company Disclosure Letter, provide an indemnity in respect of any pending or threatened civil, criminal or administrative actions, suits, claims, litigations, arbitrations, investigations or other proceedings for an amount to be paid by the Company or any of its Subsidiaries in excess of, or that would reasonably be expected to be in excess of, $250,000 or which would be reasonably likely to have any adverse impact on the operations of the Company or any of its Subsidiaries, or indemnify any Person other than pursuant to a contractual obligation to do so;
(xv) enter into any consent decree, enter a guilty or nolo contendre plea, settle any civil, criminal or administration actions, suits, claims, litigations, arbitrations, investigations or other proceedings for an amount in excess of $1,000,000 or enter into any settlement that would reasonably be expected to change in any material respect the Company’s or any of its Subsidiaries’ current methods of operations;
(xvi) other than in the ordinary course of business, (A) amend or modify in any material respect, or terminate or waive any material right or benefit under, any Material Contract (other than as permitted elsewhere in this Section 6.1(a)) or (B) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $500,000;
(xvii) 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 method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods or settle or compromise any material tax liability;
(xviii) sell, lease, license or otherwise dispose of any material assets of the Company or its Subsidiaries except in the ordinary course of business or obsolete assets;
(xix) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify any Company Benefit Plans, except new hire grants committed to in writing prior to the date of this Agreement in the ordinary and usual course of business; or
(xx) increase the salary, wage, bonus or other compensation payable or to become payable to the directors, officers or employees of the Company or any of its Subsidiaries, except in the ordinary and usual course of business; or
(xxi) agree or commit to do any of the foregoing. Notwithstanding anything to the contrary contained in this Section 6.1(a), to the extent they relate to the Partnerships, the Company’s obligations in this Section 6.1(a) shall be limited to taking such steps, such as the exercise of any veto rights, that are within the control of the Company and its Subsidiaries (Dother than the Partnerships).
(b) From the date of this Agreement until the Effective Time, except (i) as otherwise expressly required by this Agreement or other Contract existing on the date of this Agreement, (ii) as the Company may approve in writing (such approval not to be unreasonably withheld or delayed) or (iii) as set forth in Section 6.1(b) of the Parent Disclosure Letter, Parent will not, and will not permit its Subsidiaries to:
(i) adopt or propose any material change in Parent’s certificate of incorporation or by laws or amend any term of the shares of Parent Common Stock;
(ii) enter into any agreement with respect to, or consummate, any acquisition by Parent or its Subsidiaries of any Person or assets, the consummation of which would require the filing of a current report on Form 8-K pursuant to Item 2.01 thereof with the voting SEC and which would reasonably be expected to materially hinder or delay the transactions contemplated by this Agreement;
(iii) other than the issuance of shares of Parent Common Stock issued for fair value in arm’s length transactions and other than the issuance of shares in the ordinary course of business consistent with past practices pursuant to Parent employee benefit plans, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of Parent or any its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of Parent to Parent or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate Parent or any of its Subsidiaries to issue or sell any shares of such capital stock or such convertible or exchangeable securities;
(Eiv) purchasedeclare, set aside or pay any dividend or distribution (whether in cash, stock or property or any combination thereof) on any shares of Parent Common Stock or on any shares of capital stock of any Subsidiary, other than (A) by wholly owned Subsidiaries and pro rata dividends or distributions payable to holders of interests in non-wholly owned Subsidiaries and (B) Parent’s regular quarterly dividend, including any increases thereof, at record and payment dates consistent with past practices;
(v) reclassify, split (including a reverse split), recapitalize, subdivide or repurchase, redeem or otherwise acquire at prices above fair market value, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 purposesstock; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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;or
(vi) 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 agree or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Accredo Health Inc), Merger Agreement (Medco Health Solutions Inc)
Interim Operations. (a) The Company covenants and EchoStar agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the date of termination of this Agreement, except (1) to the First Effective Time (unless Parent extent DISH shall otherwise approve give its prior consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) as set forth in Section 4.1(a) of the EchoStar 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 the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)this Agreement, the Company EchoStar shall, and shall cause each of its the EchoStar Subsidiaries to, use conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business in all material respects and in a manner consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable best efforts to maintain and preserve intact its business organization, keep available the Retained Business’ organization intact and services of key employees, maintain the Retained Business’ existing relations and goodwill satisfactory relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees distributors and business associates other commercial counterparties and others having maintain its material business dealings with the Retained Business assets and properties in their current condition (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers normal wear and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) tear excepted). Without limiting the generality of, and in furtherance of, the foregoing, during the Company covenants and agrees as to itself and its Subsidiaries that, period from and after the date of this Agreement and prior through the earlier of the Closing or the date of termination of this Agreement, except (1) to the First Effective Time (unless Parent extent DISH shall otherwise approve give its prior consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law), (2) as set forth in Section 4.1(a) of the EchoStar Disclosure Letter, (3) as required by applicable Legal Requirements or (4) as expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter)this Agreement, the Company EchoStar shall not (and shall not permit any of its Subsidiaries EchoStar Subsidiary to:):
(i) amend EchoStar’s Organizational Documents or the Organizational Documents of any EchoStar Subsidiary (except for immaterial amendments to the Organizational Documents of any EchoStar Subsidiary which would not reasonably be expected to materially delay or prevent the consummation of the Closing or would reasonably be expected to adversely impact DISH and the DISH Subsidiaries);
(ii) split, combine, subdivide, amend the terms of or reclassify any shares of EchoStar’s capital stock or the capital stock of any EchoStar Subsidiary (other than any wholly owned EchoStar Subsidiary) (or any securities convertible into any of the foregoing);
(iii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) with respect to SpinCo and any shares of EchoStar’s capital stock or the SpinCo Subsidiaries capital stock of any EchoStar Subsidiary, except for dividends or other distributions paid by any wholly owned EchoStar Subsidiary to EchoStar or another wholly owned EchoStar Subsidiary;
(iv) (A) form any Subsidiary that would constitute an EchoStar Subsidiary, (B) make any capital contributions to, or investments in, any other Person (including any officer, director, Affiliate, agent or consultant of EchoStar or any EchoStar Subsidiary) other than to wholly owned EchoStar 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 (A)C), (A) amend its certificate of incorporation in one or bylaws (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 comparable governing documents) (other than amendments to prevent the governing documents of any Subsidiary consummation of the Company that would not preventClosing;
(v) issue, delay sell, grant or impair the Initial Merger otherwise permit to become outstanding any additional shares of, or the other Transactions)securities convertible or exchangeable for, (B) splitor options, combinewarrants or rights to acquire, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock or the capital stock of any EchoStar Subsidiary, other than: (except for (1A) any dividends or distributions paid by shares of capital stock of a direct or indirect wholly owned Subsidiary of the Company EchoStar issued to either EchoStar or another direct or indirect wholly owned Subsidiary of EchoStar; (B) shares of EchoStar Common Stock issuable upon exercise of EchoStar Options or the Company or vesting of EchoStar RSU Awards outstanding on the date of this Agreement; (C) pursuant to the Company or EchoStar ESPP in accordance with the terms of this Agreement; and (2D) normal semiannual cash dividends on the shares of EchoStar Class A Common Stock issuable upon conversion from other classes of EchoStar Common Stock in accordance with the EchoStar Articles.
(vi) except in a transaction solely between EchoStar and any wholly owned Subsidiary of EchoStar or solely among any wholly owned Subsidiaries of EchoStar, sell, assign, transfer, lease or license to any third party, or encumber (other than EchoStar Permitted Encumbrances), or otherwise dispose of, any EchoStar IP or any material assets of EchoStar, 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 described in of the date of this Agreement and set forth on Section 5.01(b)(i4.1(a)(vi) of the Company EchoStar Disclosure Letter), ; (C) non-exclusive licenses of EchoStar IP granted in the ordinary course of business; or (D) enter into disposals of any agreement with respect immaterial EchoStar Registered IP resulting from a cancellation, abandonment or failure to renew any immaterial EchoStar Registered IP in the voting ordinary course of its capital stock, business;
(vii) directly or (E) purchase, indirectly repurchase, redeem or otherwise acquire any shares of its EchoStar’s capital stock stock, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable into or exercisable for any shares of its EchoStar’s capital stock stock, except: (other than (1A) shares of EchoStar Common Stock repurchased from employees or consultants or former employees or consultants of EchoStar pursuant to the forfeiture ofexercise of repurchase rights binding on EchoStar and existing prior to the date of this Agreement; or (B) shares of EchoStar Common Stock accepted as payment for the exercise price of EchoStar Options outstanding on the date of this Agreement pursuant to the applicable EchoStar Equity Plan or for withholding Taxes incurred in connection with the exercise, vesting or withholding settlement of Taxes with respect toEchoStar Options and EchoStar RSU Awards outstanding on the date of this Agreement, Company Restricted Stock Unitsas applicable, 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable award;
(iiviii) merge (A) incur any indebtedness for borrowed money, guarantee any such indebtedness, issue or consolidate with sell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances to any other Personperson; (B) incur any Lien on any of its material property or assets, except for EchoStar Permitted Encumbrances; or restructure, reorganize (C) enter into any transactions that amend or completely or partially liquidate (other than transactions otherwise alter available capacity under Section 4.7 of either 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 Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, Unsecured Indenture or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)Secured Indenture;
(iiiix) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, terminate or materially amend or terminate any material Company EchoStar Plan or amend any collective bargaining or other labor agreement, (B) increase, or accelerate the terms vesting or payment of, the compensation or benefits of any outstanding equity-based awards director, independent contractor or employee of EchoStar or any EchoStar Subsidiary, other than than, (1) in the event the Closing has not occurred by April 2, 2024, increases in base salary to any such action taken for purposes individuals who are not directors or officers of replacing, renewing EchoStar or extending a broadly applicable material Company Plan any EchoStar Subsidiary in the ordinary course of business consistent with past practice that does do not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except exceed 5% in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President aggregate and (2) employees at or above the level of Executive Vice President increases 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, connection with promotions permitted under clause (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, (C) grant any rights to severance, retention, change in control or termination pay to any director, independent contractor or employee of EchoStar or any EchoStar Subsidiary, (D) hire or promote any employee to a position with EchoStar or any EchoStar Subsidiary with an annual rate of base salary in excess of $300,000 or a title of Senior Vice President or higher, or (E) commercial paper issued terminate the employment of any employee of EchoStar or any EchoStar 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 EchoStar Plans determined by EchoStar in good faith to be required to comply with applicable Legal Requirements; and (2) increases required pursuant to any EchoStar Plan as in effect on the date of this Agreement;
(x) other than in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at (A) amend, supplement or otherwise modify or terminate any time outstandingMaterial Contracts or waive, release or assign any material rights under any Material Contracts (Fexcept for (1) 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 terminations pursuant 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 expiration 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, Material Contract and (L2) purchase money indebtedness and lease financing extensions at the option of EchoStar or any EchoStar Subsidiary under the terms thereof exercised in the ordinary course of business consistent with past practice), or (B) enter into any Contract that, if in effect on the date of this Agreement, would constitute a Material Contract;
(vxi) change any of its methods of financial accounting or accounting practices in any material respect other than 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 EchoStar 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 EchoStar Disclosure Letter (a “EchoStar Non-Budgeted Capital Expenditure”), except that EchoStar or any Subsidiary of EchoStar may make any EchoStar Non-Budgeted Capital Expenditure that, when added to all other EchoStar Non-Budgeted Capital Expenditures made by EchoStar and the EchoStar 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 EchoStar’s stockholders;
(xv) enter into any agreement, understanding or arrangement with respect to the Retained Businesssale 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 EchoStar or the EchoStar Subsidiaries, have a value not in excess of $5,000,000 in the aggregate, (B) do not impose any material restriction on EchoStar’s business or the business of the EchoStar Subsidiaries, (C) do not relate to any litigation, claim, suit, action, proceeding or other Legal Proceeding by EchoStar’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 EchoStar or any EchoStar 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 EchoStar Permits in a manner that adversely impacts EchoStar’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 EchoStar Registered IP or otherwise abandon, cancel, or permit to lapse any material EchoStar IP or agreements pursuant to which EchoStar or any EchoStar Subsidiary licenses or obtains the right to use any Intellectual Property, other than with respect to acquisitions any abandonment of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties any EchoStar Registered IP at the end of the applicable statutory term or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) otherwise in the ordinary course of business consistent with past practice and practice, or (B) disclose to any third party any Trade Secret included in the aggregate not EchoStar IP, other than pursuant to a non-disclosure agreement restricting the disclosure and use of such Trade Secret, or in excess connection with any regulatory filing or any publication of 120% any patent application;
(xxi) except in the ordinary course of business, enter into any Contract under which EchoStar or any EchoStar 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 DISH and the DISH 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 amounts reflected Code; or
(xxiv) authorize, enter into any Contract or make any commitment to do any of the foregoing.
(b) DISH 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 EchoStar shall otherwise give its prior consent in the Company’s capital expenditure budget for each of 2017writing (such consent not to be unreasonably withheld, 2018 and 2019 conditioned or delayed), (2) as set forth in Section 5.01(b)(v4.1(b) of the Company DISH Disclosure Letter;
, (vi3) with respect to the Retained Businessas required by applicable Legal Requirements (including any applicable Covid-19 Measures that are Legal Requirements) or (4) as expressly required by this Agreement, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonmentDISH shall, and cancellationsshall cause the DISH Subsidiaries to, and Liens that are ordinary course non-exclusive licenses, in each case, 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 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 $75,000,000 individually the date of termination of this Agreement, except (1) to the extent EchoStar shall otherwise give its prior consent in any event writing (other than transactions among the Company and its wholly owned Retained Subsidiariessuch consent not to be unreasonably withheld, conditioned or delayed), (D2) licensesas set forth in Section 4.1(b) of the DISH Disclosure Letter, sales(3) as required by applicable Legal Requirements or (4) as expressly required by this Agreement, letting lapse, abandonment DISH shall not (and cancellations shall not permit any DISH Subsidiary to):
(i) amend DISH’s Organizational Documents in any manner which would reasonably be expected to materially delay or prevent the consummation of Intellectual Property that is used the Closing or held for use exclusively would be adverse in any material respect to the SpinCo Business and (E) Affiliation Agreementsholders of EchoStar Class A Common Stock relative to holders of DISH Class A Common Stock;
(viiii) with respect to split, combine, subdivide, amend the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon terms of or otherwise dispose reclassify any shares of any properties the DISH’s capital stock or assets (including the capital stock of any of its Retained Subsidiaries but not including DISH Subsidiary (other than any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for wholly owned DISH Subsidiary) (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible into or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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)(viiiforegoing);
(ixiii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) with respect to any shares of DISH’s capital stock or the Retained Businesscapital stock of any DISH Subsidiary, except for dividends or other than capital expenditures made in accordance with Section 5.01(b)(vdistributions paid by any wholly owned DISH Subsidiary to DISH or another wholly owned DISH Subsidiary;
(iv) and other than with respect to film and television production and programming directly or video game productionindirectly repurchase, which is subject to Section 5.01(b)(xredeem or otherwise acquire any shares of DISH Common Stock (excluding, for clarity, securities convertible into shares of DISH Common Stock), spend or commit to spend in excess of except: (A) $25,000,000 if shares of DISH Common Stock repurchased from employees or consultants or former employees or consultants of DISH pursuant to the transaction is not in the ordinary course exercise of repurchase rights binding on DISH 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 existing prior 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includint
Appears in 2 contracts
Sources: Agreement and Plan of Merger (EchoStar CORP), Agreement and Plan of Merger (DISH Network CORP)
Interim Operations. (a) The Company Debtor covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time Closing, except (unless Parent shall 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, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and except (iii) as (1) otherwise required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) Laws or (3iv) otherwise expressly disclosed as set forth in Section 5.01(a) 4.1 of the Company Debtor Disclosure Letter), the Company shall, and Business shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business be conducted in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to consistent therewith, the Retained Business, subject to compliance with the specific matters set forth below, Debtor and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization intact their business organizations intact, preserve governmental licenses, permits, consents, approvals, authorizations and qualifications and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providersassociates, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after 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 prior to the First Effective Time (unless Parent shall otherwise ProMedica may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) otherwise required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Laws or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 4.1 of the Company Debtor Disclosure Letter), the Company shall Debtor will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 by-laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Debtor or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate the Debtor or any of its Subsidiaries or otherwise enter into any agreements providing for the sale of their respective material assets, operations or business (other than transactions (A) the sale or disposition of obsolete or worn-out assets in the type ordinary course of business and (B) sales and dispositions of such facilities and related assets as are 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 SNF/AL Remarketing Process (as defined in which such Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the TransactionsOriginal 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;
(iv) acquire any corporation, partnership or other business organization or division thereof or collection of assets constituting all or substantially all of a business or business unit, whether by merger or consolidation, purchase of substantial assets or equity interest or any other manner, from any other Person;
(v) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Debtor or any of its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Debtor to the Debtor or another wholly-owned 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 SNF/AL Remarketing Process;
(vi) 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 any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Debtor or any direct or indirect wholly-owned Subsidiary of the Debtor);
(viii) 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 as expressly required for dividends paid by any Company Plan as in effect on direct or indirect wholly-owned Subsidiary to the date hereof: Debtor or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than the Original Restructuring Support Agreement and the Alternative Restructuring Support Agreement);
(ix) 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;
(x) incur any 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 action taken indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Debtor or any of its Subsidiaries, except for purposes of replacing, renewing or extending a broadly applicable material Company Plan indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice that does (A) not materially increase to exceed $2,000,000 in the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofaggregate, (B) grant guarantees incurred in compliance with this Section 4.1 by the Debtor of indebtedness of wholly-owned Subsidiaries of the Debtor or provide (C) indebtedness owed to the Debtor or another wholly-owned Subsidiary of the Debtor;
(xi) 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 any transaction capital expenditure in excess of $2,000,000 in the aggregate, excluding any capital expenditure required by any Contract set forth on Section 4.1(a)(xi) of the Debtor Disclosure Letter or retention bonuses capital expenditure determined in good faith by the Debtor Board to be required for (A) the protection of, or to avoid injury to, any Person, (B) the care or safety of any patient under the care of any facility operated by the Debtor or any of its Subsidiaries or (C) compliance with Law;
(xii) 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 material accounting policies or procedures, except as required by changes in applicable Law or GAAP;
(xiv) settle any litigation or other Proceeding brought against the Debtor or its Subsidiaries by a Governmental Entity (A) for an amount in excess of $100,000 individually or $1,000,000 in the aggregate for all such Proceedings (other than any resolution of claims processing for government reimbursement in the ordinary course of business, 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 in excess of $500,000 individually or $8,000,000 in the aggregate for all such Proceedings in any one-calendar-month period (in each case, with respect to Proceedings in the state of Pennsylvania, net of applicable insurance proceeds) 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;
(xvi) 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);
(xviii) transfer, sell, lease, license, mortgage, pledge, divest or otherwise dispose of any material tangible or intangible assets (including Intellectual Property Rights), licenses, operations, rights, product lines, businesses or interests therein of the Debtor or its Subsidiaries, including the capital stock of any of its Subsidiaries, except (A) in connection with services provided in the ordinary course of business 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 a fair market value not in excess of $500,000 in the aggregate, (C) pursuant to Contracts in effect prior to the date of this Agreement and (D) such sales, leases, 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 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) increase or accelerate the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any director, officer, officer or employee or other service provider of the Company Debtor or any of its Subsidiaries, (C) increase grant any new awards, or amend or modify the compensation, bonus or pension, welfare or other benefits terms of any directoroutstanding awards, officer under any Company Plan (other than grants of any new awards to any individual whose hiring is not restricted by, or employee of the Company or any of its Subsidiarieswho is otherwise hired in accordance with, except in the ordinary course of business consistent with past practice with respect to clause (1H) employees below the 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 changebelow), (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) 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 benefits under any Company Plan (including any equity-based awards)Plan, (FE) change any actuarial or other assumptions used to calculate funding obligations with respect to any 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 determined, except as may be required by the terms of any existing Company Plan set forth on Section 2.1(h)(i) of the Debtor Disclosure Letter or GAAP, (GF) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to directorsany director, officers officer or employees employee of the Company Debtor or any of its Subsidiaries;
, (ivG) incur terminate the employment of any Indebtedness officer of the Debtor or issue its Subsidiaries other than for “cause”, (H) hire (x) any warrants 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 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 (x) 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 Plans, nondiscretionary severance payments under existing Company Plans, and nondiscretionary payments of nonqualified deferred compensation (other rights than as set forth on Section 4.1(a)(xix)(I) of the Debtor Disclosure Letter) or as otherwise required by applicable Law; provided that payment in respect of any severance or nonqualified deferred compensation amount in excess of $200,000 shall be subject to acquire any Indebtednessprior notice and consultation with ProMedica and QCP and, except with respect to clauses (A) through (H) above, (1) amendments to welfare plans in the ordinary course of business, consistent with past practices that do not materially increase the costs of such welfare plans, (2) with respect to any hourly employees and salaried facility-level employees of the Debtor or its Subsidiaries, and any other employees of the 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 otherwise as reasonably determined by the CRO, in consultation with ProMedica and QCP, to be necessary to respond to market demand, (3) with respect to each other employee of the Debtor or its Subsidiaries whose annual base salary exceeds $150,000 (other than any Eligible Employee), increases in compensation in the ordinary course of business consistent with past practice in a principal amount that do not to exceed $400,000,000 in 1.5% of the aggregate at annual base salaries of such other employees or 7.5% of the annual base salary for any time outstanding on prevailing market terms individual and (4) as required pursuant to existing Company Plans, or on terms as otherwise required by applicable Law;
(xx) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, 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 use or otherwise exploit any material Intellectual Property Rights;
(xxii) fail to use commercially reasonable efforts to keep in full force the material Insurance Policies under substantially consistent with or more beneficial to the Company same levels of coverage as the current policies of the Debtor and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date ;
(xxiii) change in any material respect any of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, Debtor’s 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 ’ material policies or refinanced, and in each case with a maturity date no more than 10 years after the date procedures for or timing of the Contract evidencing such Indebtednesscollection of accounts receivable (or any other trade receivables), payment of accounts payable (C) intercompany Indebtedness among the Company or any other trade payables), billing of its customers, pricing and its wholly owned Subsidiariespayment terms, (D) (1) to the extent not drawn upon and cash collections, cash 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 programsterms with suppliers, in each case issuedcase, made other than changes required by suppliers, vendors and service providers;
(xxiv) dismiss the QCP Consultants other than in accordance with Section 5.1(b);
(xxv) modify or entered into amend 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 any respect any Contract pursuant 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company HCR III or any of its Subsidiaries with respect currently subleases real property to such Indebtedness (and Parent and its 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 other Subsidiary of the Company Disclosure LetterDebtor; 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;or
(vxxvi) with respect to the Retained Businessagree, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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;foregoing.
(vib) 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 material Intellectual Property; provided that this clause (vi) ProMedica shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinknowingly take
Appears in 2 contracts
Sources: Alternative Plan Sponsor Agreement, Alternative Plan Sponsor Agreement (Quality Care Properties, Inc.)
Interim Operations. (a) The Company covenants Crown and agrees King each covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent Crown or King, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1otherwise expressly contemplated by this Agreement or as set forth in Section 7.1(a) required by applicable Lawof such Party’s Disclosure Letter, (2i) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practice, Ordinary Course and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorslicensors, licensorslicensees, creditors, lessors, employees Service Providers and business 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 its and its Subsidiaries’ present employees Service Providers and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the generality of, of and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatof Section 7.1(a), from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless Parent shall otherwise approve w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) as approved in writing, writing by the other Party (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company such Party’s Disclosure Letter), the Company each Party, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to 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 materially impair the ability of such Party to consummate the Transactions, the Organizational Documents of any of such Party’s Subsidiaries, including, in the case of King, King Sub’s Organizational Documents;
(ii) except for any such transactions among its direct or indirect wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with any other Person, or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets outside of the Ordinary Course from any other Person (A) 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), 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 such Party to consummate the Transactions, in each case, other than acquisitions of inventory or other goods in the Ordinary Course and transactions among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case issuance of clause (A)), shares (A) amend by its certificate direct or indirect wholly owned Subsidiary to it or another of incorporation its direct or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)indirect wholly owned Subsidiaries, (B) split, combine, subdivide or reclassify its in respect of equity-based awards outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary as of the Company which remains a wholly owned Subsidiary after consummation date of such transaction)this Agreement, or (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 Course on any of its assets or any of its Subsidiaries, except for Encumbrances (A) that are required by or automatically effected by Contracts in place as of the day hereof, (B) that do not materially detract from the value of such assets or (C) that do not materially impair the operations of such Party or any of its Subsidiaries;
(vi) make any loans, 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 Subsidiaries or to or from King and any of 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 aggregate;
(vii) except to the extent expressly provided by, and consistent with, Section 7.1(b)(vii) of such Party’s Disclosure Letter, declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company modify in any material respect its dividend policy;
(viii) reclassify, split, combine, subdivide or redeem, purchase (2through such Party’s share repurchase program or otherwise) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock, 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 shares of Crown Common Stock or King Common Stock, as applicable, tendered by Service Providers in connection with a cashless exercise of Crown Options or King Options, as applicable, outstanding as of the date of this Agreement or in order to pay Taxes in connection with the exercise or vesting of Crown equity awards or King equity awards, as applicable, outstanding as of the 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;
(ix) 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 in excess of $180 million in the aggregate during any consecutive twelve (12) month period (other than capital expenditures within the thresholds set forth in Section 7.1(b)(ix) of such Party’s Disclosure Letter), (1B) pursuant expenditures not in excess of $50 million (net of insurance proceeds) in the aggregate that such Party reasonably determines are necessary to avoid a material business interruption or maintain the forfeiture of, safety and integrity of any asset or withholding property or (C) paid by any direct or indirect wholly owned Subsidiary to such Party or to any other direct or indirect wholly owned Subsidiary of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitssuch Party, in each case in accordance with past practice 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 terms other Party prior to making or agreeing to any such capital expenditure);
(x) other than in the Ordinary Course or in connection with any transaction or potential transaction described on Section 7.1(a) of such Party’s Disclosure Letter, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, adversely amend, modify, supplement or waive, terminate, assign, convey, 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 Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofContract, (B) grant non-exclusive licenses under Intellectual Property owned by Crown and its Subsidiaries or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company King or any of its Subsidiaries, as applicable, in each case, granted in the Ordinary Course, or (C) increase the compensation, bonus any agreement among such Party and its direct or pension, welfare indirect wholly owned Subsidiaries or other benefits of any director, officer among such Party’s direct or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its indirect wholly owned Subsidiaries;
(ivxi) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than in the ordinary course of business consistent Ordinary Course or with past practice in a principal amount respect to amounts that are not material 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 such Party and its Subsidiaries, taken as a whole, than existing Indebtednesscancel, 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 a maturity date the parameters set forth in Section 7.1(b)(xii) of such Party’s Disclosure Letter; provided, that no more than 10 years after 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 date business operations of the Contract evidencing such IndebtednessParty and its Subsidiaries or Affiliates;
(xiii) amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(Bxiv) except make, change or revoke any material election with respect to the Bridge FacilityTaxes, in replacement 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 refinanceexist the creation of any Encumbrance upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for 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 any properties or assets (excluding capital stock not including services or sales of inventory in the Retained Subsidiariesordinary course of business) with a fair market value not in excess of $50,000,000 individually if the transaction is not 150 million in the ordinary course or $100,000,000 individually aggregate other than pursuant to Material Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on 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 existing terms of any Benefit Plan as in effect on the date of this Agreement, as permitted under this Agreement or as required by applicable Law, increase or change the compensation or benefits payable to any Service Provider other than in the Ordinary Course; provided, that, notwithstanding the foregoing, except as expressly disclosed in Section 7.1(b)(xvi) of such Party’s Disclosure Letter or required pursuant to a Crown Benefit Plan or King Benefit Plan, as applicable, in effect as of the date of this Agreement, the Parties shall not: (A) grant any new long-term incentive or equity-based awards and or amend or modify the Company Stock Plansterms of any such outstanding awards under any Crown Benefit Plan or King Benefit Plan, as applicable, (B) Investment Preferred Stock (as defined in the Bridge Facility) 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 wholly owned Subsidiaries 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 Company 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 individual;
(xvii) recognize any labor union, works council, or to other labor organization or employee representative as the representative of any other wholly owned Subsidiary of the Company; provided thatemployees of the Party or its Subsidiaries, or become a party to, establish, adopt, amend, commence negotiations for or terminate any collective bargaining agreement or other labor-related Contract with a labor union, works council, or other labor organization or employee representative, in each case, other than as required by applicable Law;
(xviii) incur any Indebtedness (including 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 issuance of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any optionsdebt securities, warrants or other rights to acquire, acquire any debt security) or guarantee any such shares Indebtedness, except for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, 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 spend in excess of (A) $25,000,000 if the transaction is not Indebtedness for borrowed money incurred in the ordinary course Ordinary Course under Crown’s or King’s, as applicable, revolving credit facilities 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 other lines of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value 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 connection with a refinancing or replacement of existing Indebtedness (but in all cases which refinancing or replacement shall not increase the agreement aggregate amount of Indebtedness permitted to be outstanding thereunder and in 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 such acquisition); provided that neither speculative purposes and (2) entered into in the Company nor any Ordinary Course and in compliance with its risk management and hedging policies or practices in effect on the date of its Retained Subsidiaries shall enter into any such transaction that wouldthis Agreement, or would reasonably be expected to, prevent, materially delay (G) Indebtedness incurred among such Party and its direct or materially impair the consummation of the Transactionsindirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xxix) convene any special meeting (or any adjournment or postponement thereof) of each Party’s respective stockholders other than capital expenditures made the Crown Stockholders Meeting or King Stockholders Meeting, as applicable; or
(xx) agree or commit to do any of the foregoing.
(c) Nothing contained in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinthis Agreement s
Appears in 2 contracts
Sources: Merger Agreement (C&J Energy Services, Inc.), Merger Agreement (Keane Group, Inc.)
Interim Operations. (a) The Except as required by applicable Law or expressly contemplated by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Time, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve in writingTime, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1A) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3B) otherwise expressly disclosed contemplated by this Agreement or as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter, or (C) Parent may approve in writing (such approval not to be unreasonably withheld), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) adopt or propose any change in its articles of incorporation or by-laws or other similar governing documents;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with respect a value or purchase price in the aggregate in excess of $25 million in any transaction or series of related transactions, other than acquisitions pursuant to SpinCo and Contracts in effect as of the SpinCo date of this Agreement;
(iv) except for the issuance of Shares upon the exercise of Company Options or upon the vesting or settlement of Company Units, Deferred Shares or Company Awards, in all cases outstanding on the date of this Agreement, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than in the case issuance of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding 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 v) create or incur any such transaction by a wholly owned subsidiary Lien material to the Company or any of its Subsidiaries on any assets of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its Subsidiaries having a value in excess of $5 million;
(vi) make any loans, advances, guarantees or capital stock contributions to or investments in any Person (except for (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $25 million in the aggregate;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to the Company any other direct or (2indirect wholly owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement Contract with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock;
(other than (1ix) pursuant to the forfeiture ofincur, or withholding of Taxes enter into, amend, modify or terminate any Contract with respect to, any indebtedness for borrowed money or guarantee, or enter into, amend, modify or terminate any guarantee of, such indebtedness of another Person, or issue, sell, enter into, amend, modify or terminate any debt securities or warrants or other rights to acquire any debt security of the Company Restricted Stock Unitsor any of its Subsidiaries, except for (i) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed $25 million in the aggregate, (ii) indebtedness for borrowed money incurred 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 Deferred Stock Units of indebtedness of wholly owned Subsidiaries of the Company or (iv) interest rate swaps that the Company Performance Stock Units, in each case in accordance or any of its Subsidiaries enters into on customary commercial terms consistent with past practice and with not to exceed $20 million in notional amount in the terms aggregate;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Stock Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $5 million in the aggregate during any 12 month period;
(xi) other than in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract (under clause (A), (B), (C), (D), (E) or (F) of the definition of such term) or an IP Contract had it been entered into prior to this Agreement;
(xii) make any changes with respect to financial accounting policies or procedures, except as required by changes in GAAP or the rules or policies of the Public Company Accounting Oversight Board;
(xiii) settle any litigation or other proceedings before a Governmental Entity (A) for an amount in excess of $1.25 million or any obligation or liability of the Company in excess of such amount, (B) on a basis that would result in (I) the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that would restrict the future activity or conduct of the Company or any of its Subsidiaries or (II) a finding or admission of a violation of Law or violation of the rights of any Person by the Company or any of its Subsidiaries, or (C) that is brought by any current, former or purported holders of any capital stock or debt securities of the Company or any of its Subsidiaries relating to the transactions contemplated by this Agreement;
(xiv) other than in the ordinary course of business consistent with past practice, amend, modify or terminate any Material Contract (under clause (A), (B), (C), (D), (E) or (F) of the definition of such term) or IP 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 $500,000 or in the aggregate a value in excess of $5 million;
(xv) make any material Tax election or material change in any Tax election, change or consent to change the Company’s or any of its Subsidiaries’ method of accounting for Tax purposes, file any material amended Tax Return or enter into any settlement or compromise of any material Tax liability of the Company or any of its Subsidiaries;
(xvi) transfer, sell, assign, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of (A) the i2 government software assets or business, (B) the marketing services business, (C) capital stock of any of its Subsidiaries or (D) any other material assets, product lines, operation rights or businesses of the Company or its Subsidiaries, except in the case of subclause (D), (x) in connection with services provided in the ordinary course of business and sales of obsolete assets, (y) except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $10 million in the aggregate and (z) other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvii) except as required pursuant to Company Benefit Plans set forth in Sections 5.1(h)(i) and 5.1(h)(viii) of the Company Disclosure Letter as in effect on the date of this Agreement (Agreement, or as modified after the date otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any of this Agreement in accordance with the terms of this Agreement) its Subsidiaries, directors, officers or (2) purchasesemployees, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge increase the compensation, bonus or consolidate with pension, welfare, severance or other benefits of, pay any other Personbonus to, or restructuremake any new equity awards to any of its or its Subsidiaries’ directors, reorganize officers 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 Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongemployees, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Benefit Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofawards, (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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Eiv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any of the Company Plan (including any equity-based awards)Benefit Plans, (Fv) 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 determined, except as may be required by GAAP, or (Gvi) forgive any loans to any of its or of any of its Subsidiaries’ directors, officers or employees;
(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; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any written material broad-based communications to the directors, officers or employees of the Company or any of its Subsidiaries;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.
(ivc) 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) Parent shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company knowingly take or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have take 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which action that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 respect reasonably likely to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair prevent the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinMerger.
Appears in 2 contracts
Sources: Merger Agreement (Choicepoint Inc), Merger Agreement (Reed Elsevier PLC)
Interim Operations. (a) The Each of the Company and Parent covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent or the Company, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) 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, (2) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary course of business consistent with past practiceOrdinary Course and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business 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) associates. Without limiting the generality of, of and in furtherance of, of the foregoing, from the Company covenants and agrees date of this Agreement until the Effective Time, except as to itself and its Subsidiaries thatotherwise expressly: (i) contemplated by this Agreement; (ii) contemplated by any Contract entered into prior to, from and concurrently with or after the date of this Agreement and prior by Parent with respect to the First Effective Time Other Parent Transactions (unless Parent shall as such Contract may be amended, supplemented or otherwise approve modified from time to time); (iii) required by applicable Law or the terms of any Contract in writingeffect on the date of this Agreement, (iv) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) other Party; or (3v) otherwise expressly disclosed set forth in the corresponding subsection of Section 5.01(b) 7.1 of the 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 any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments make any material change to the governing documents nature of its business and operations;
(ii) make any Subsidiary 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 Company that would not preventconditions to, delay or impair the Initial 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) splitadopt a plan or agreement of complete or partial liquidation, combinedissolution, subdivide restructuring, recapitalization or reclassify its outstanding shares of capital stock (other reorganization, in each case, except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends such transactions solely between or distributions paid by a direct among, or indirect solely involving, such Party and one or more of its wholly owned Subsidiaries, or a Subsidiary of the Company to another direct such Party and one or indirect more wholly owned Subsidiary Subsidiaries of the Company or to the Company or such Subsidiary, (2) normal semiannual cash dividends on 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 Common Stock as described in Section 5.01(b)(i) 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 Disclosure Letter)Agreement, (D) issue, sell, grant, transfer or authorize the issuance, sale or grant, or otherwise enter into any agreement Contract with respect to the voting of, any of its capital stockpartnership interests, or (E) purchaselimited liability company interests, repurchase, redeem or otherwise acquire any shares of its capital stock or any 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 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 partnership interests, limited liability company interests, shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable forequity interests, as applicable, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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 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;
(v) 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 stock or equity interests, as applicable, or securities convertible or exchangeable into or exercisable forfor 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 Material Adverse Effect or Parent Material Adverse Effect, as applicable;
(vii) other than in the 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 optionsright to claim a refund of a material amount of Taxes;
(viii) make any material changes with respect to accounting policies, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)except as required by changes in GAAP;
(ix) with respect make or declare any dividends or distributions to the Retained Businessholders of Common Units or Parent Common Stock, in each case, 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 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)Ordinary Course; provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;or
(x) other than capital expenditures made agree, authorize or commit to do any of the foregoing.
(b) Notwithstanding anything to the contrary in accordance this Agreement, a Party’s obligations under Section 7.1(a) to take an action or not to take an action, or to cause its Subsidiaries to take an action or not to take an action, shall, with Section 5.01(b)(vrespect to any Persons (and their respective Subsidiaries) controlled by such Party, or in which such Party otherwise has a voting interest, but that are not wholly owned Subsidiaries of such Party or have public equity holders, only apply (i) to the extent permitted by the organizational documents and other than purchases governance arrangements of such entity and licenses its subsidiaries, (ii) to the extent a Party is authorized and empowered to bind such 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 of film and television and production programming (includinits equity holders.
Appears in 2 contracts
Sources: Merger Agreement (Enbridge Energy Management L L C), Merger Agreement (Enbridge Inc)
Interim Operations. Except as set forth in the ▇▇▇▇▇▇▇ Disclosure Letter, in the case of ▇▇▇▇▇▇▇, the Cardiac Disclosure Letter, in the case of Cardiac, or as otherwise expressly contemplated hereby, without the prior consent of the other party (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval consent shall not be unreasonably withheld, conditioned withheld or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), from the Company date hereof until the Effective Time, ▇▇▇▇▇▇▇ and Cardiac shall, and shall cause each of its their respective Subsidiaries to, use its reasonable best efforts to conduct the Retained Business their business in all material respects in the ordinary course of business consistent with past practice, and the Company shall, practice and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to (i) preserve intact its present business organization, (ii) maintain in effect all material licenses, approvals and authorizations, including, without limitation, all material licenses and permits that are required by applicable Laws for the Retained Business’ organization intact operation of its business and maintain the Retained Business’ (iii) preserve existing relations relationships with its key employees, its key agents, and goodwill with Governmental Entities, its material customers, supplierslenders, distributors, licensors, creditors, lessors, employees and business associates suppliers and others having material business dealings relationships 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) it. Without limiting the generality of, and in furtherance of, of the foregoing, except as set forth in the Company covenants and agrees ▇▇▇▇▇▇▇ Disclosure Letter, in the case of ▇▇▇▇▇▇▇, or the Cardiac Disclosure Letter, in the case of Cardiac, or as to itself and its Subsidiaries thatotherwise expressly contemplated by this Agreement, from and after the date of this Agreement and hereof until the Effective Time, without the prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) consent of the Company Disclosure Letter)other party, the Company neither ▇▇▇▇▇▇▇ nor Cardiac shall, nor shall not and shall not either permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (Aa) amend its certificate of incorporation or bylaws (or comparable similar governing documents);
(b) (other than amendments take any action that would prevent or materially impair the ability of it to consummate the transactions contemplated by this Agreement, including actions that would be reasonably likely to prevent or materially impair its ability to obtain any consent, registration, approval, permit or authorization required to be obtained from any Governmental Entity prior to the governing documents Effective Time in connection with the execution and delivery of any Subsidiary this Agreement and the consummation of the Company that would not prevent, delay or impair the Initial Merger or Mergers and the other Transactions), transactions contemplated by this Agreement;
(Bc) split, combine, subdivide combine or reclassify its outstanding any shares of its capital stock (except for or any such transaction by a wholly of its Subsidiaries which are not wholly-owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) or declare, set aside or pay any dividend or other distribution payable (whether in cash, stock or property (or any combination thereof) in respect of its capital stock or any securities of any of its Subsidiaries which are not wholly-owned, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of any of its Subsidiaries which are not wholly-owned;
(d) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of its capital stock (except for (1) of any dividends class or distributions paid by a direct any securities convertible into or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stockexercisable for, or (E) purchaseany rights, repurchasewarrants or options to acquire, redeem or otherwise acquire any shares of its such capital stock or any securities such convertible or exchangeable into or exercisable for any shares of its capital stock (securities, other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishthe issuance of ▇▇▇▇▇▇▇ Common Shares or Cardiac Common Shares, adoptas the case may be, amend or terminate any material Company Plan or amend upon the terms exercise of any stock options outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the issuance of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except stock options in the ordinary course of business consistent to purchase up to 75,000 ▇▇▇▇▇▇▇ Common Shares or 350,000 Cardiac Common Shares, as the case may be, pursuant to the ▇▇▇▇▇▇▇ Stock Plans or Cardiac Stock Plan, as the case may be, in accordance with past practice with respect their present terms except that no such stock options shall be issued to (1) employees below the level any executive officer of Executive Vice President ▇▇▇▇▇▇▇ or Cardiac; and (2C) employees at or above the level issuance of Executive Vice President in respect of increases of less than 7.5% of compensation relative ▇▇▇▇▇▇▇ Common Shares pursuant to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries▇▇▇▇▇▇▇ ESPP;
(ive) other than expenses incurred in connection with this transaction such as reasonable legal and accounting expenses, and investment banking expenses, incur any Indebtedness capital expenditures or issue any warrants obligations or other rights to acquire any Indebtednessliabilities in respect thereof, except for those (Ai) contemplated by its capital expenditure budget, (ii) incurred 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 ofbusiness, 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 (iii) not otherwise described in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, clauses (Ci) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, and/or (Dii) (1) to the extent not drawn upon and payments which are not triggered therebyin excess of an aggregate of $100,000;
(f) acquire (whether pursuant to merger, letters stock or asset purchase or otherwise) in one transaction or series of creditrelated transactions any assets of or equity interests in any Person;
(g) sell, bank guaranteeslease, security license, encumber or performance bonds or similar credit support instruments and otherwise dispose of any assets (2including, without limitation, intellectual property rights), other than (i) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (Eii) commercial paper issued equipment and property no longer used in the operation of its business, and (iii) sales or other dispositions of assets related to discontinued operations;
(h) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or warrants or rights to acquire any debt securities or guarantee any debt securities of others or request any advances in respect of, or make any drawdowns on, any existing indebtedness which advance or drawdown (together with other advances or drawdowns made after the date of this Agreement) exceeds $100,000 in the aggregate;
(i) enter into, amend, modify or terminate any material contract, agreement or arrangement or otherwise waive, release or assign any material rights, claims or benefits thereunder, except 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, business;
(Fi) 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 except in the ordinary course of business consistent with past practice, or as required by Law or by an agreement existing on the date hereof, increase the amount of compensation of any director or executive officer or make any increase in or commitment to increase any employee benefits, (ii) except as required by Law or by an agreement existing on the date hereof, adopt any severance program or grant any material severance or termination pay to any director, officer or employee, (iii) adopt or implement any employee retention program or other incentive arrangement not in existence on the date hereof or amend in any material respect such program or arrangement, (iv) adopt any additional employee benefit plan or, except in the ordinary course of business, make any material contribution to any existing plan (other than as required by Law or such plan), or (v) except as may be required by Law or pursuant to any agreement existing on the date hereof, amend in any material respect any ▇▇▇▇▇▇▇ Employee Plan or Cardiac Employee Plan, as the case may be;
(vk) with respect to change its (x) methods of accounting in effect at December 31, 2004, except as required by changes in GAAP or by Regulation S-X of the Retained BusinessExchange Act, as concurred in by its independent public accountants or (y) fiscal year;
(l) other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and practice, make any Tax election or enter into any settlement or compromise of any Tax liability that in the aggregate not in excess of 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 Lettereither case is material to its business;
(vim) with respect to the Retained Businesspay, transferdischarge, leasesettle or satisfy any claim, licenseliability or obligation (absolute, sellaccrued, assignasserted or unasserted, let lapsecontingent or otherwise) other than (y) for an amount of $100,000 or less, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (Az) ordinary course non-exclusive licenses repayment of indebtedness or ordinary course security interests in connection with the production or financing payment of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreementscontractual obligations when due;
(viin) commence any Action other than in accordance with respect past practice, or settle or propose to the Retained Businesssettle, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien any Action for material money damages or restrictions upon or otherwise dispose of its operations;
(o) take any properties or assets (including capital stock of action that would cause any of its Retained Subsidiaries but not including representations and warranties herein to become untrue in any Intellectual Propertymaterial respect; and
(p) agree, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses resolve or other dispositions of otherwise commit to do any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Cardiac Science Inc), Merger Agreement (Quinton Cardiology Systems Inc)
Interim Operations. (a) The Company Each of the Partnership and Parent covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent or the Partnership, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) 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, (2) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary course of business consistent with past practiceOrdinary Course and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business 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) associates. Without limiting the generality of, of and in furtherance of, of the foregoing, from the Company covenants and agrees date of this Agreement until the Effective Time, except as to itself and its Subsidiaries thatotherwise expressly: (i) contemplated by this Agreement; (ii) contemplated by any Contract entered into prior to, from and concurrently with or after the date of this Agreement and prior by Parent with respect to the First Effective Time Other Parent Transactions (unless Parent shall as such Contract may be amended, supplemented or otherwise approve modified from time to time); (iii) required by applicable Law or the terms of any Contract in writingeffect on the date of this Agreement, (iv) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) other Party; or (3v) otherwise expressly disclosed set forth in the corresponding subsection of Section 5.01(b) 8.1 of the Company Partnership Disclosure Letter), as it relates to the Company 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 shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments make any material change to the governing documents nature of its business and operations;
(ii) make any Subsidiary 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 Company that would not preventconditions to, delay or impair the Initial 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) splitadopt a plan or agreement of complete or partial liquidation, combinedissolution, subdivide restructuring, recapitalization or reclassify its outstanding shares of capital stock (other reorganization, in each case, except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends such transactions solely between or distributions paid by a direct among, or indirect solely involving, such Party and one or more of its wholly owned Subsidiaries, or a Subsidiary of the Company to another direct such Party and one or indirect more wholly owned Subsidiary Subsidiaries of the Company or to the Company or such Subsidiary, (2) normal semiannual cash dividends on 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 Common Stock as described in Section 5.01(b)(i) ability of such Party to satisfy any of the Company Disclosure Letter)conditions to, or the consummation of, the Merger or the other Transactions;
(Div) issue, sell, grant, transfer or authorize the issuance, sale or grant, or otherwise enter into any agreement Contract with respect to the voting of, any of its capital stockpartnership interests, or (E) purchaselimited liability company interests, repurchase, redeem or otherwise acquire any shares of its capital stock or any 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 its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable forequity interests, as applicable, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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 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;
(v) 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 stock or equity interests, as applicable, or securities convertible or exchangeable into or exercisable forfor 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 Partnership Material Adverse Effect or Parent Material Adverse Effect, as applicable;
(vii) other than in the 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 optionsright to claim a refund of a material amount of Taxes;
(viii) make any material changes with respect to accounting policies, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)except as required by changes in GAAP;
(ix) with respect make or declare any dividends or distributions to the Retained Businessholders of Common Units or Parent Common Stock, in each case, 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 productionthe Ordinary Course, which is subject to Section 5.01(b)(x), spend or commit to 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)8.12; provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;or
(x) other than capital expenditures made agree, authorize or commit to do any of the foregoing.
(b) Notwithstanding anything to the contrary in accordance this Agreement, a Party’s obligations under Section 8.1(a) to take an action or not to take an action, or to cause its Subsidiaries to take an action or not to take an action, shall, with Section 5.01(b)(vrespect to any Persons (and their respective Subsidiaries) controlled by such Party, or in which such Party otherwise has a voting interest, but that are not wholly owned Subsidiaries of such Party or have public equity holders, only apply (i) to the extent permitted by the organizational documents and other than purchases governance arrangements of such entity and licenses its subsidiaries, (ii) to the extent a Party is authorized and empowered to bind such 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 of film and television and production programming (includinits equity holders.
Appears in 2 contracts
Sources: Merger Agreement (Enbridge Inc), Merger Agreement (Enbridge Energy Partners Lp)
Interim Operations. (a) The From the date of this Agreement until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company covenants and agrees as to itself and its Subsidiaries thatthat it will use its commercially reasonable efforts, from and after the execution date of this Agreement and prior to until the First Effective Time (Time, unless Parent shall otherwise approve in writing, which approval to cause the business of it and its Subsidiaries to be conducted, in all material respects, in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall not be unreasonably withhelduse their respective commercially reasonable efforts to (a) preserve their business organizations, conditioned or delayed, assets and except as (1) required by applicable Lawlines of business intact, (2b) expressly required 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 the Company and its Subsidiaries, taken as a whole, used by the Transaction Documents (including in connection with the Separation Company and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts and necessary to conduct the Retained Business its business in the ordinary course of business consistent with past practicepractice (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 the Company shall, (d) maintain in all material respects its and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ their existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement in accordance with its terms, except (unless A) as otherwise expressly required by this Agreement, (B) as Parent shall otherwise may approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable LawLaws or definitive interpretations thereof or by any Governmental Entity, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b4.1(a) of the Company Disclosure Letter), the Company shall not will not, and shall will not permit any of its Subsidiaries Subsidiaries, to:
(i) except with respect adopt any amendments to SpinCo and the SpinCo Subsidiaries (other than its charter or bylaws or, in the case of clause any Subsidiary that is not a corporation, similar applicable organizational documents;
(A)), ii) (A) amend its certificate adopt a plan of incorporation complete or bylaws (partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or comparable governing documents) other reorganization (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactionsthis Agreement), (B) splitacquire by merging or consolidating with, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary purchasing an equity interest in or portion of the Company which remains a wholly owned Subsidiary after consummation assets of such transaction(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) declaretake or omit to take any action that would cause any rights under Material Intellectual Property, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement including with respect to the voting of its capital stockany registrations or applications for registration, to lapse, be abandoned or canceled, or (E) purchasefall into the public domain, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, actions 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan omissions in the ordinary course of business consistent with past practice that does and not materially increase the cost otherwise in violation of such Company Plan this Section 4.1, or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance enter into a joint venture or termination payments partnership or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equitysimilar third-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesparty business enterprise;
(iviii) incur acquire assets or capital stock from any Indebtedness or issue any warrants or other rights to acquire any IndebtednessPerson, except 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 transaction or series of related transactions;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options or SARs and the settlement of Restricted Stock Awards, RSUs and PSPUs (and dividend equivalents thereon, if applicable) outstanding on the date of this Agreement or (B) the issuance of shares of capital stock by a principal amount Subsidiary of the Company to the Company or another 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 exceed 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, make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect Subsidiary of the Company) in excess of $400,000,000 1,000,000 in the aggregate at any time outstanding on prevailing market terms time;
(vi) (A) declare, set aside or on terms substantially consistent pay any dividend or other distribution, whether payable in cash, stock or other property, with respect to its capital stock, except for dividends by any wholly owned direct or more beneficial indirect Subsidiary of the Company 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 or any other wholly owned direct or indirect Subsidiary of the Contract evidencing such IndebtednessCompany; 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) except with split, combine or reclassify the Shares or any other outstanding capital stock of the Company or issue or authorize the issuance of any other securities in respect to the Bridge Facilityof, in replacement of, lieu 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 Indebtednesssubstitution therefor, (C) intercompany Indebtedness among redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of the Company, except for acquisitions, or deemed acquisitions, of Shares or other equity securities of the Company in connection with (1) the satisfaction of Tax withholding obligations with respect to 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;
(1vii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify the terms of any Indebtedness, including any Indebtedness under the existing revolving credit facilities of the 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 Person means (A) all indebtedness for borrowed money, (B) any other indebtedness which is evidenced by a note, bond, indenture, debenture or similar Contract, (C) all capitalized lease obligations of such Person or obligations of such Person to pay the deferred and unpaid purchase price of property and equipment, other than trade payables incurred in the ordinary course of business, (D) 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 other Indebtedness of 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 thereof in respect of Indebtedness of the Company or any Subsidiary thereof, to the extent not drawn (i) such Indebtedness is in existence on the date hereof or is permitted hereby and (ii) the terms of such Indebtedness require such obligation or undertaking), (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 payments are not triggered thereby, (H) reimbursement obligations under (i) letters of credit, bank guaranteesguarantees and other similar contractual obligations entered into by or on behalf of such Person or (ii) surety, security customs, reclamation or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programsother than, in each the case issued, made or of this clause (ii) those 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 2 contracts
Sources: Merger Agreement (XPO Logistics, Inc.), Merger Agreement (Con-Way Inc.)
Interim Operations. Except (ai) The as required by this Agreement, (ii) as set forth in Section 6.1 of the Company covenants and agrees Disclosure Schedule, (iii) as required by applicable Law, or (iv) as consented to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingwriting by Parent, which approval shall consent will not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Lawthe Company covenants that, (2) expressly required by from the Transaction Documents (including date of this Agreement until the earlier of the termination of this Agreement in connection accordance with the Separation its terms and the Distribution or as contemplated by the Final Step PlanEffective Time:
(a) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to will (i) conduct the Retained Business business only in the ordinary course of business consistent with past practice, Ordinary Course and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Business, subject to compliance with the specific matters set forth belowconsistent therewith, use commercially reasonable efforts to (A) preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entitiesits current business organization, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersB) and keep available the services of key employees and (C) maintain its existing relationships with its customers and suppliers; provided that no action or failure to take action by the Company or any of its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) through (s) will constitute a breach under this Section 6.1(a) unless such action or failure to take action would constitute a breach of such provision of Section 6.1(b) through (s), as applicable;
(b) the Company will not amend its Certificate of Incorporation or Bylaws, the Company will not permit any of its Subsidiaries to amend any of the organizational documents of any of its Subsidiaries, and none of the Company or any of its Subsidiaries will otherwise take any action to exempt any Person from any provision of its Certificate of Incorporation or Bylaws or any of the organizational documents of any of its Subsidiaries;
(c) the Company will not, and will not permit any of its Subsidiaries to, authorize or pay any dividends on or make any distribution with respect to its outstanding Shares or other securities (whether in cash, assets, stock or other securities of the Company or its Subsidiaries), except dividends and distributions made by a direct or indirect wholly owned Subsidiary of the Company to its parent, or directly or indirectly redeem, purchase or otherwise acquire any Shares or other securities;
(d) except for (i) transactions exclusively among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries’ present employees and agents.
, (bii) Without limiting issuances of Shares in respect of any exercise of Company Stock Options or settlement of Company Units or Company Stock-Based Awards outstanding on the generality ofdate of this Agreement, in each case in accordance with the terms of the applicable award agreement as in effect as of the date of this Agreement, and in furtherance of, (iii) issuance of the foregoingCommitted Shares, the Company covenants will not, and agrees as to itself and will not permit any of its Subsidiaries thatto, from and after issue, sell, pledge, dispose of or encumber (other than Permitted Liens), or authorize the issuance, sale, pledge, disposition or encumbrance (other than Permitted Liens) of, any Shares or any securities convertible into or exchangeable for Shares, or any rights, warrants or options to acquire or with respect to Shares or convertible or exchangeable securities, or split, combine or reclassify the Shares or any outstanding capital stock of any of the Company’s Subsidiaries;
(e) except to the extent required by Contracts in existence as of the date of this Agreement and prior to the First 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 by Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Benefit Plans set forth on Section 5.01(b4.10(a) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo increase in any manner the compensation and the SpinCo Subsidiaries benefits (other than in the case of clause (A))including severance, (Atermination, change-in-control, incentive and retention compensation or benefits) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay current or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to former directors, officers or employees of the Company and its Subsidiaries; provided, that the Company may issue the Committed Shares to the persons entitled thereto;
(ii) grant any Company Stock Awards or other equity or equity-based awards (other than the Committed Shares), or amend the terms of any Company Stock Awards outstanding as of the date of this Agreement;
(iii) enter into, amend (other than de minimis administrative amendments to Company Benefit Plans that do not increase the level of benefits or cost to the Company or any of its Subsidiaries of maintaining the applicable compensation or benefit program, policy, arrangement or agreement), adopt, implement or otherwise commit itself to any Company Benefit Plan or other compensation or benefit plan, program, policy or Contract that would be a Company Benefit Plan if in effect as of the date of this Agreement, including any pension, retirement, profit-sharing, bonus, collective bargaining or other employee benefit or welfare benefit plan, policy, arrangement or agreement or employment or consulting agreement with or for the benefit of any employee, director, consultant, independent contractor or service provider of the Company or its Subsidiaries;
(iv) incur other than pursuant to the terms of this Agreement, take any Indebtedness action to amend, waive or issue accelerate the vesting of, or the lapsing of restrictions or performance criteria with respect to, any warrants Company Benefit Plan or Company Stock Option, Company Stock-Based Award or Company Unit or otherwise accelerate any rights or benefits, or make any determinations under any Company Benefit Plan;
(v) establish or fund (or provide any funding for) any rabbi trust or other rights funding arrangement, including in respect of any Company Benefit Plan;
(vi) hire or promote any person at the level of Director or above or terminate (other than for cause) the employment or services of any employee at the level of Director or above; or
(vii) enter into, establish or adopt any collective bargaining or similar agreement with any union, works council or labor organization;
(f) the Company will not, and will not permit any of its Subsidiaries to, make any loans or advances to acquire any Indebtednessof its directors and executive officers (other than travel and payroll advances in the Ordinary Course in type and amount) or make any change in its existing borrowing or lending arrangements for or on behalf of any such Persons;
(g) the Company will not, and will not permit any of its Subsidiaries to, (i) incur, assume, guarantee or prepay any indebtedness for borrowed money (directly, contingently or otherwise), except for (A) any indebtedness for borrowed money among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries, (B) indebtedness for borrowed money in the ordinary course of business consistent with past practice in a principal an amount not to exceed $400,000,000 5,000,000 in aggregate principal amount, and (C) letters of credit issued in the aggregate at Ordinary Course or (ii) incur any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to Lien securing indebtedness for borrowed money, except for Liens securing borrowing expressly permitted by the foregoing clause (i);
(h) the Company and its Subsidiaries, taken as a whole, than existing Indebtednesswill not, and with will not permit any of its Subsidiaries to, change in any material respect any of the accounting methods, principles or practices used by it unless required by or advisable under a maturity date no more than 10 years after change in GAAP or any other accounting standard used by any such Subsidiary as of the date of this Agreement;
(i) other than in the Contract evidencing such IndebtednessOrdinary Course, the Company will not, and will not permit any of its Subsidiaries to (A) make, change or revoke any material income Tax election, (B) except with respect to the Bridge Facility, in replacement offile any material amended income Tax Return, 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 settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes, other than in the case of clauses (B) and (C) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in the Company’s GAAP financial statements;
(j) the Company will not, and will not permit any of its Subsidiaries to, acquire, except in respect of any mergers, consolidations, business combinations among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries, including by merger, consolidation or acquisition of stock or assets, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets in connection with acquisitions or investments, other than the purchase of supplies, equipment and products in the Ordinary Course;
(Dk) the Company will not, and will not permit any of its Subsidiaries to, renew, extend, terminate, amend in any material respect or waive any of its material rights under any Company Material Contract of the type described in Section 4.17(a)(iv), (1v), (vi), (viii), (xvi) or (xvii) or enter into any Contract that would constitute a Company Material Contract of the type described in Section 4.17(a)(iv), (v), (vi), (viii), (xvi) or (xvii) if entered into prior to the extent date of this Agreement, and except in the Ordinary Course, the Company will not, and will not drawn upon and payments are not triggered therebypermit any of its Subsidiaries to, letters renew, extend, terminate, amend in any material respect or waive any of creditits material rights under any Company Material Contract (other than of the type described in Section 4.17(a)(iv), bank guarantees(v), security (vi), (viii), (xvi) or performance bonds (xvii)) or similar credit support instruments and enter into any Contract that would constitute a Company Material Contract (2other than of the type described in Section 4.17(a)(iv), (v), (vi), (viii), (xvi) overdraft facilities or cash management programs, in each case issued, made or (xvii)) if entered into prior to the date of this Agreement;
(l) the Company will not, and will not permit any of its Subsidiaries to, make or authorize any capital expenditure, other than capital expenditures in the ordinary course Ordinary Course or that do not otherwise exceed the Company’s existing capital budget by more than $1,000,000 in the aggregate;
(m) the Company will not, and will not permit any of business consistent with past practiceits Subsidiaries to, (EA) commercial paper issued sell, transfer, mortgage, encumber or otherwise dispose of any of its tangible assets, tangible properties or businesses, except for sales, transfers, mortgages, encumbrances or other dispositions in the ordinary course Ordinary Course (including dispositions of business consistent with past practice inventory or of obsolete equipment in a principal amount the Ordinary Course) or pursuant to an existing contract set forth in Section 6.1(m) of the Company Disclosure Schedule, or (B) cancel, release or assign any indebtedness of any person owed to it or any claims held by it against any Person other than the release of claims held by it in the Ordinary Course;
(n) except in the Ordinary Course, the Company will not, and will not permit any of its Subsidiaries to (i) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Company-Owned IP, including failing to perform or cause to be performed all applicable filings, recordings and other acts, or to pay or cause to be paid all required fees and Taxes, to maintain and protect its interest in the Company-Owned IP, or (ii) grant to any third party any license, or enter into any covenant not to exceed ▇▇▇, with respect to any Company-Owned IP;
(o) the Company will not, and will not permit any of its Subsidiaries to, commence, settle or compromise any litigation, suit, action or proceeding, except for commencements, settlements or compromises that (i) involve monetary remedies with a value not in excess of $250,000,000 1,000,000, with respect to any individual litigation, suit, action or proceeding or $5,000,000 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 purposesaggregate; provided that the aggregate principal Company will notify Parent of commencements, settlements or compromises that involve monetary remedies with a value in excess of $500,000, (ii) do not involve any material equitable remedy or impose any material restriction on its business or the business of its Subsidiaries, and (iii) do not relate to any litigation by the Company’s stockholders in connection with this Agreement or the transactions contemplated hereby;
(p) the Company will not, and will not permit any of its Subsidiaries to, materially reduce the amount of Indebtedness at insurance coverage or fail to renew any time outstanding under material existing insurance policies;
(q) the Company will not, and will not permit any of its Subsidiaries to, amend any franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals, clearances, permissions, qualifications or registrations or orders of any Governmental Entity in a manner that adversely impacts its ability to conduct its business in any material respect, or (ii) other than in the Ordinary Course, terminate or allow to lapse, any such franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals, clearances, permissions, qualifications or registrations or orders;
(r) the Company will not, and will not permit any of its Subsidiaries to, adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than this clause Agreement); and
(Fs) shall the Company will not, and will not exceed $9,000,000,000; providedpermit any of its Subsidiaries to, furtheragree to do, or make any commitment to do, any of the foregoing. The Company may request consent from Parent (such consent not to be unreasonably withheld, conditioned or delayed) with respect to the actions proscribed in this Section 6.1 by delivering written notice. The Company, on the one hand, and Parent and Merger Sub, on the other hand, acknowledge and agree that (i) nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the Separation Agreement shall provide that SpinCo shall assume right to control or direct the obligations operations of the Company or any of its Subsidiaries prior to the Effective Time, (ii) prior to the Effective Time, the Company will exercise, consistent with the terms and conditions of this Agreement, control and supervision over its and its Subsidiaries’ operations, (iii) notwithstanding anything to the contrary in this Agreement, no consent of Parent will be required with respect to any matter set forth in this Section 6.1 or elsewhere in this Agreement to the extent the requirement of such Indebtedness consent would reasonably be expected to be a violation of applicable Law, and (iv) notwithstanding anything to the contrary in this Agreement, Parent’s consent will not be required for the Company to take, or fail to take, any action set forth in Section 6.1(a), Section 6.1(e)(i) or Section 6.1(l) if the Company determines in good faith that such action or inaction is reasonably necessary in light of then-current operating conditions and Parent developments with respect to the business of the Company and its SubsidiariesSubsidiaries as a result of COVID-19; provided, including, following in the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and case 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, furtheriv), that the Company shall will provide reasonable advance notice to and consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with any such action or inaction and will keep Parent fully informed on 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;
(v) current basis with respect to the Retained Business, other than 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 (including sports rights) with third parties such action or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includininaction.
Appears in 2 contracts
Sources: Merger Agreement (Home Depot, Inc.), Merger Agreement (HD Supply Holdings, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including business of it and its Subsidiaries shall be conducted in connection the ordinary and usual course consistent with past practice and to the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries 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 efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorslandlords, licensors, creditors, lessorslicensees, employees and business associates and others having material business dealings with associates. Notwithstanding 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, foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless i) as otherwise contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld), conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) is required by applicable Law, (2) expressly required Law or by the Transaction Documents (including in connection with the Separation and the Distribution) any Governmental Entity or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(ia) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation (including by way of any certificates of designation) or bylaws or other applicable governing instruments;
(b) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company;
(c) (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 $500,000 in any transaction or series of related transactions, other than amendments acquisitions pursuant to Contracts in effect as of the governing documents date of this Agreement, all of which are identified on Section 5.1(q) of the Company Disclosure Schedule;
(d) issue, sell, dispose of, grant, transfer or subject to any Lien, or authorize the issuance, sale, disposition, grant or transfer of or Lien on, any shares of capital stock of the Company or any of its Subsidiaries, including, without limitation shares of Series A Junior Participating Preferred Stock (in each case, other than (i) 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 capital stock or other equity interests by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except securities convertible or exchangeable into or exercisable for any such transaction by a wholly owned subsidiary capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(e) make any loans, advances or capital contributions to or investments in any Person (other than the Company which remains a or any direct or indirect wholly owned Subsidiary after consummation of such transaction), the Company) in excess of $500,000 in the aggregate;
(Cf) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1i) any 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 or distributions paid by a any direct or indirect wholly owned Subsidiary of to the Company or to another any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(g) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, acquisition of any such capital stock or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units other securities tendered by current or Company Performance Stock Units, former employees or directors in each case in accordance with past practice and connection with the terms exercise of the currently outstanding Company Stock Plans as in effect on the date Options);
(h) incur any indebtedness for borrowed money or guaranty such indebtedness of this Agreement another Person (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 wholly owned Subsidiary of the Company by the Company or any other than a wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 compensationeach case for indebtedness, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business and consistent with past practice in a principal amount not to exceed $400,000,000 practice, for borrowed money under credit facilities, lines of credit and other debt or borrowing arrangements reflected in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to Financial Statements; provided, however that neither the Company and nor its Subsidiaries, taken as a whole, than Subsidiaries shall draw down on any amounts under its existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) credit facilities 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, necessary to comply with letters of credit, bank guaranteesunder credit facilities, security lines of credit and other debt or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, borrowing arrangements reflected in each case issued, made or entered into the Company's most recent financial statements included in the Company Reports issued from time to time in the ordinary course of business consistent in an amount not to exceed $1,000,000 in the aggregate outstanding at any given time;
(i) make any material changes with past practicerespect to accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(Ej) commercial paper issued make, alter or revoke any Tax accounting method or material Tax election, or settle or compromise any Tax liability or otherwise pay or consent to any assessment as the result of an audit, file any amended Tax Return, enter into any closing agreement relating to Taxes, or waive or extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice in a principal amount not business);
(k) transfer, sell, lease, exclusively license, surrender, divest, cancel, abandon or otherwise dispose of, or subject to exceed $250,000,000 in the aggregate at any time outstandingLien, (F) Indebtednessany assets, the proceeds of which will be used to finance all product lines 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations businesses of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, includingother than inventory, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof supplies 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 other assets in the ordinary course of business consistent with past practice;
(vl) except as expressly contemplated by this Agreement, required pursuant to the Benefit Plans in effect on the date of this Agreement disclosed in Section 5.1(h)(i) of the Company Disclosure Schedule, pursuant to any 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, (i) grant or provide any severance or termination payments or benefits to any officers, employee, independent contractor or consultant of the Company or any of its Subsidiaries, (ii) 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 respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) non-executive employees in the ordinary course of business consistent with past practice and practice, (iii) enter into any new, or amend the terms of any existing, employment agreement or Benefit Plan with any member of management of the Company or any of its Subsidiaries, (iv) grant any equity or equity-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, to the price or value of any Shares or other equity securities of the Company or any of its 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 terms of any outstanding Company Option, or (viii) terminate or materially amend any existing, or adopt any new, Benefit Plan (other than changes that may be necessary to comply with applicable Law, in each case that do not materially increase the costs of any such Benefit Plans); provided, 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 delayed);
(m) 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 not in excess of 120% of the amounts reflected over and above those capital expenditures identified in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 plan set forth in Section 5.01(b)(v6.1(o) of the Company Disclosure LetterSchedule;
(vip) with respect enter into any rights agreement, establish any stockholder rights plan (or similar plan commonly referred to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place as a Lien upon "poison pill") or otherwise dispose of enter into any material Intellectual Property; provided that this clause Contract (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (case other than transactions among the Stock Plans existing on the date hereof and Company Options issued thereunder) under which the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties may become obligated to sell or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, otherwise issue, deliverregister, sellredeem, grantrepurchase, transfer, or encumber, or authorize the issuance, delivery, sale, grantvote, transfer or encumbrance of, dispose of any shares of its capital stock or any securities convertible other securities; or
(q) except as provided in Section 6.2 and Section 6.3, agree, authorize or exchangeable into commit to do any of the foregoing. Nothing contained in this Agreement (including, without limitation, this Section 6.1) is intended to give Parent, directly or exercisable forindirectly, the right to control or direct the Company's or any optionsof its Subsidiaries' operations prior to the Effective Time, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of nothing contained in this Agreement in accordance with is intended to give the existing terms Company, directly or indirectly, the right to control or direct Parent's or any of such awards its Subsidiaries' operations. Prior to the Effective Time, each of Parent, Merger Sub and the Company Stock Plansshall exercise, (B) Investment Preferred Stock (as defined 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 Bridge Facility) continued operation of the Company and the Subsidiaries, the Company will reasonably confer in good faith on a regular basis with one or (C) more representatives of Parent, designated by wholly owned Subsidiaries Parent to the Company or to any other wholly owned Subsidiary in writing, regarding operational matters, and the general status of ongoing operations of the Company; provided that, for the avoidance Company and will notify Parent promptly 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);
(ix) with respect to the Retained Business, 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 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 occurrence that has had or may reasonably be expected to have a Company Material Adverse Effect or that, individually or $200,000,000 in the aggregate in any yearaggregate, in each case to acquire any business, whether by merger, consolidation, purchase of property has materially delayed 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 its Retained Subsidiaries shall enter into any such transaction that wouldimpaired, or would reasonably be expected to, prevent, to materially delay or materially impair the impair, consummation of the Transactions;
(x) other than capital expenditures made transactions contemplated by this Agreement, or that, individually or in accordance 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 5.01(b)(v) 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 acknowledges that Parent does not and other than purchases and licenses will not waive any rights it may have under this Agreement as a result of film and television and production programming (includinsuch notice or consultations.
Appears in 2 contracts
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from From and after the execution date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement, except (unless the following exceptions (i)–(v), the “Interim Covenant Exceptions”) (i) as otherwise required or expressly permitted by this Agreement, (ii) as may 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 shall otherwise approve in writing, (which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except as 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 (15) required by applicable Law, Business Days after receiving a written request (2email sufficient) expressly required by from the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) Company for such consent or (3v) as otherwise expressly disclosed set forth in Section 5.01(a) 7.1 of the Company Disclosure Letter)Schedule, the Company shallshall use reasonable best efforts to, and shall cause each of its Subsidiaries to, to use its reasonable best efforts to to, conduct the Retained Business its business in all material respects in the ordinary course of business and, to the extent consistent with past practicetherewith, shall use, and the Company shall, and shall cause each of its Subsidiaries toto use, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to (i) preserve the Retained Businessits and its Subsidiaries’ organization intact assets and business organizations intact, (ii) maintain the Retained Business’ existing relations in effect all of its material foreign, federal, state and goodwill local licenses, permits, consents, franchises, approvals and authorizations and (iii) maintain satisfactory relationships with Governmental Entitiesits material customers, customerslenders, suppliers, distributors, licensors, creditorslicensees, lessors, employees and business associates distributors and others having material business dealings relationships with it; provided, however, that no action or failure to take action with respect to matters specifically addressed by the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersprovisions of Section 7.1(b) and keep available the services shall constitute a breach under this sentence unless such action or failure to take action would constitute a breach of the Company and its Subsidiaries’ present employees and agentssuch provision of Section 7.1(b).
(b) Without limiting From the generality ofdate 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 furtherance of, the foregoingParent’s sole discretion, the Company covenants shall not, and agrees as to itself and shall cause its Subsidiaries not to:
(i) adopt (A) any change in the Company’s Organizational Documents (except for immaterial or ministerial amendments) or (B) material changes to the Organizational Documents of any Subsidiary of the Company that, in the case of this clause (B), would be adverse to Parent;
(ii) merge or consolidate the Company or any of its Subsidiaries 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, directly or indirectly by merger, 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 individual transaction or series of related transactions or $100 million in the aggregate, 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 goods or services in the ordinary course of business;
(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, dispose of, grant, transfer, lease, license, guarantee, Encumber (other than with Permitted Encumbrances), or otherwise enter into any Contract or other agreement with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or 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 Subsidiary of the Company to the Company or 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 date of this Agreement in 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;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries or 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;
(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 capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other 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 prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned C) pro rata dividends or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required distributions by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (a Subsidiary other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any a Wholly Owned Subsidiary of the Company that would not preventin the ordinary course of business;
(viii) reclassify, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any 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 (1A) pursuant to satisfy applicable Tax withholding and/or exercise prices upon vesting, settlement or exercise of any Company Equity Award outstanding on the forfeiture ofdate hereof or granted after the date hereof without violation of this Agreement, or withholding (B) any such transactions solely involving Wholly Owned Subsidiaries of Taxes 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 respect tothis Section 7.1(b), except for incurrences of Indebtedness and guarantees under the Company Restricted Stock UnitsRevolving 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 Deferred Stock Units or any Company Performance Stock UnitsSubsidiary other than payments of Indebtedness under the Company Credit Agreements, except, in each case of clauses (A) and (B) for any 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 accordance with past practice and with any manner that would increase the terms 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 the Company’s capital budget set forth in Section 7.1(b)(x) of the Company Stock Plans as 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 $10 million 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 aggregate per annum without taking into account any wholly owned Subsidiary of the Company amounts permitted by the Company or any other wholly owned Subsidiary of the Companyforegoing clause (B);
(iixi) merge or consolidate with enter into any other PersonContract that would have been a Company Material Contract had it been entered into prior to this Agreement, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent business;
(xii) other than with past practice that does not 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 increase the cost of such amend, materially modify, or waive any material rights under, any Company Plan or benefits provided under such Company Plan based on the cost on the date hereofMaterial Contract, (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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except than in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesbusiness;
(ivxiii) incur cancel, modify or waive any Indebtedness debts 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of claims held by the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiarieshaving in each case a value in excess of $1 million individually or $5 million in the aggregate, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings other than debts 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 claims held against customers in connection with a Sky Acquisition and refinancings the sale or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the rental of 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 Products 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) solely between 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the Company and and/or 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Wholly Owned Subsidiaries;
(viiixiv) 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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights except as expressly provided for by Section 7.12, fail to use commercially reasonable efforts to maintain in effect any material Insurance Policy, unless simultaneous with any termination, cancellation or entering into customary film lapse of such material Insurance Policy, replacement self-insurance programs are established by the Company or television financing partnerships one or contractual arrangements for film more of its Subsidiaries or television financing shall be deemed not replacement policies underwritten by reputable insurance carriers are in full force and effect, in each case, providing coverage substantially similar to be an issuancethe coverage under the terminated, sale cancelled 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)lapsed material Insurance Policies;
(ixxv) with respect to the Retained Business, 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 Transaction Litigation or video game productionany Tax claim, audit, assessment or dispute, which is subject to shall be governed exclusively by Section 5.01(b)(x7.19 and Section 7.1(b)(xvii), spend respectively, settle or commit to spend compromise any Proceeding for an amount 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 5 million individually or $200,000,000 25 million in the aggregate in during any calendar 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 its Retained Subsidiaries shall enter into any such transaction that would, or which would reasonably be expected to, to (A) prevent, materially delay or materially impair the consummation of the Transactionstransactions contemplated by this Agreement or (B) involve any criminal liability or result in any non-monetary obligation that is material to the Company and its Subsidiaries (taken as a whole);
(xxvi) make any material changes with respect to any financial accounting policies or procedures, except as required by GAAP or SEC rule or policy;
(A) make (other than in the ordinary course of business), change or revoke any material Tax election, (B) change any annual Tax accounting period, (C) change any material Tax accounting method, (D) file any amended Tax Return that is material, (E) enter into any closing agreement with respect to Taxes, (F) settle any material Tax claim, audit, assessment or dispute for an amount that materially exceeds the amount reserved with respect thereto, or (G) surrender any right to claim a refund of a material amount of Taxes;
(xviii) (A) sell, assign, transfer, divest or otherwise dispose of, or grant any exclusive license, to any material Owned IPR, except in the ordinary course of business, or (B) cancel, abandon or otherwise allow to lapse or expire any material Registered Owned IPR (or any rights of the Company or its Subsidiaries therein or thereto), other than at the end of its term or otherwise in the Company’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 (1) increases in compensation in the ordinary course of business, subject to the limitations set forth in Section 7.1(b)(xix) of the Company Disclosure Schedule and (2) the payment of cash incentive compensation for completed periods based on actual performance in the ordinary course of business, (B) become a party to, establish, adopt, amend 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 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’s executive leadership team other than for cause;
(xx) other than capital expenditures made in accordance the ordinary course of business, become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with Section 5.01(b)(va labor union, labor organization, works council or similar organization; or
(xxi) agree, authorize or commit to do any of the foregoing.
(c) 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 other than purchases its Subsidiaries shall exercise, consistent with the terms and licenses conditions of film this Agreement, complete control and television supervision over their respective operations.
(d) Notwithstanding anything to the contrary in this Agreement, each of Parent and production programming the Company shall not, and shall cause its respective controlled Affiliates not to directly or indirectly (includinwhether by merger, consolidation, or otherwise), acquire, 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) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time and except (unless A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent shall otherwise approve may consent to in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned delayed or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Planconditioned) or (3D) otherwise expressly disclosed as set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business protect and preserve in the ordinary course of business consistent with past practice, all material respects its assets and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact its business organizations and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, licensors, creditors, lessors, employees and other business 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 its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior 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 the First Effective Time in writing (unless Parent shall otherwise approve in writing, which approval shall such consent not to be unreasonably withheld, conditioned delayed or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distributionconditioned) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b6.1(a) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws by-laws or other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(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, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments to the governing documents issuance of any shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger another wholly owned Subsidiary or the other Transactions)issuance of Shares pursuant to Company Options, (BCompany Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) split, combine, subdivide or reclassify its outstanding 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 v) create or incur any such transaction by a wholly owned subsidiary Lien material to the Company or any of its Subsidiaries on any assets of the Company which remains a 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 any loans, advances, guarantees or capital contributions to or investments in any Person (other than 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 after consummation of such transactionthe Company), ;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1A) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of to the Company or to another any other direct or indirect wholly owned Subsidiary of the Company or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company Disclosure Letter), (DCompany) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock, except from (other than (1A) pursuant holders of Company Options in full or partial payment of the exercise thereof and/or any 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 forfeiture of, extent required 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 permitted under the terms of the Company applicable Stock Plans as in effect on and award agreements or (B) former employees, directors or consultants following termination of their relationship with the date of this Agreement (or as modified after the date of this Agreement Company in accordance with applicable agreements providing for the terms repurchase of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)shares upon such termination;
(iiix) merge incur any indebtedness for borrowed money or consolidate with any other guarantee such indebtedness of another Person, or restructure, reorganize issue or completely sell any debt securities 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) 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 consistent with past practice with respect and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(1xvi) employees below other than in the level ordinary course of Executive Vice President business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (2D) employees at fail to exercise a right of removal or above extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the level date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of Executive Vice President the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in respect of increases of less than 7.5% of compensation relative to their materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or pension, welfare or other benefits prior to such changeincentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) increase accelerate the severance vesting of or termination payments or benefits payable lapsing of restrictions with respect to any director, officer, employee equity-based compensation or other service provider of the Company or long-term incentive compensation under any of its SubsidiariesBenefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to accelerate fund or secure the vesting or payment of compensation or benefits any amounts under any Company Plan (including any equity-based awards)Benefit Plan, (FH) change any actuarial or other 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 respect to any Company Plan or to change the manner maximum annual cash compensation opportunities in which contributions to excess of $200,000, provided, that such plans 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 the basis on which such contributions are determined other agreement with a labor union, works council or similar organization or (GK) forgive terminate without cause the employment of any loans officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) 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;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 (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(ivc) incur any Indebtedness or issue any warrants or other rights Subject to acquire any IndebtednessSection 6.5, 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) Parent shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company take or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiariestake any action that is reasonably likely to prevent, 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 interfere 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made Merger or result in accordance with Section 5.01(b)(v) and other than purchases and licenses any of film and television and production programming (includinthe conditions to the Merger set forth in Article VII not being satisfied.
Appears in 2 contracts
Sources: Merger Agreement (Medicis Pharmaceutical Corp), Merger Agreement (Valeant Pharmaceuticals International, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after Without limiting the execution Company's obligations under Section 6.5 of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingAgreement, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by set forth in the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) corresponding section of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoingLetter or otherwise as expressly contemplated hereby, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time (unless Parent Cingular shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed), the business of it and which determination its Subsidiaries shall take into account be conducted in the ordinary course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present employees and agents of the Company Overview Presentationand its Subsidiaries. Without limiting the Company's obligations under Section 6.5 of this Agreement and without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Effective Time, the Company will not and will not permit its Subsidiaries to (unless Cingular shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed):
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except as for any such transactions among wholly-owned Subsidiaries of the Company that are not obligors or guarantors of third party indebtedness;
(1iii) required by applicable Lawacquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $50,000,000, (2) expressly required by other than acquisitions pursuant to Contracts to the Transaction Documents (including extent in connection with effect immediately prior to the Separation execution of this Agreement and the Distribution) or (3) otherwise expressly disclosed set forth in Section 5.01(b6.1(a)(iii) of the Company Disclosure Letter or as otherwise set forth in Section 6.1(a)(iii) of the Company Disclosure Letter;
(iv) other than pursuant to Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 6.1(a)(iv) of the Company Disclosure Letter, and other than the issuance of shares of Common Stock upon the exercise of outstanding Company Options and pursuant to other equity-based awards granted under the Stock Plans and shares under the Company's 401(k) plan and the deferred compensation plans, in each case, in accordance with their terms, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable 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) other than in connection with existing receivables facilities and securitizations and renewals thereof in the ordinary course of business, create or incur any Lien on assets of the Company shall not and shall not permit or any of its Subsidiaries to:that is material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(ivi) except with respect other than acquisitions pursuant to SpinCo Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 6.1(a)(vi) of the SpinCo Subsidiaries Company Disclosure Letter, make any loan, advance or capital contribution to or investment in any Person (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any a wholly-owned Subsidiary of the Company that would not prevent, delay or impair Company) in excess of $25,000,000 in the Initial Merger or the other Transactions), aggregate;
(B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or other distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another the Company or to any other direct or indirect wholly wholly-owned Subsidiary of the Company and periodic dividends and other periodic distributions by non-wholly-owned Subsidiaries consistent with past practices) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(viii) other than the redemption of the Series C Preferred Stock or the Series E Preferred Stock in accordance with the Company's certificate of incorporation, reclassify, combine, split, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares share of its capital stock stock;
(ix) incur any indebtedness for borrowed money 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 incurred in the ordinary course of business not to exceed $50,000,000 in the aggregate, (B) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on customary commercial terms, (C) guarantees incurred in compliance with this Section 6.1(a) by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (D) interest rate swaps on customary commercial terms, consistent with past practices and not to exceed $750,000,000 of notional debt in the aggregate;
(x) except as set forth in Section 6.1(a)(x) of the Company Disclosure Letter, make or authorize any capital expenditure;
(xi) enter into any Material Contract that would have ' been a Material Contact as described in clauses (J), (L) or (M) of Section 5.1(j)(i) had it been entered into prior to the execution of this Agreement, and other than in the ordinary course of business, enter into any other Material Contract that would have been a Material Contract as described in Section 5.1(j)(i) (other than as described in clauses (1J), (L) pursuant or (M)) had it been entered into prior to the forfeiture of, or withholding execution of Taxes this Agreement;
(xii) make any changes with respect toto accounting policies or procedures, Company Restricted Stock Unitsexcept as required by changes in GAAP or by Law or except as the Company, Company Deferred Stock Units based on the advice of its independent auditors and after consultation with Cingular, determines in good faith is advisable to conform to best accounting practices;
(xiii) settle any litigation or Company Performance Stock Units, other proceedings before or threatened to be brought before a Governmental Entity for an amount in each case in accordance with past practice and with excess of $10,000,000 or which would be reasonably likely to have any adverse impact on the terms operations of the Company Stock Plans as or any of its Subsidiaries or on any current or future litigation or other proceeding of the Company or any of its Subsidiaries; provided, that any litigation or other proceeding with respect to an item relating to Taxes may be settled for an amount that is not in effect excess of the amount reserved or accrued for such item on the most recent balance sheet contained in the Company Reports filed prior to the date of this Agreement (which reserve and accrual information shall be furnished by the Company to Cingular upon Cingular's request);
(xiv) 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;
(xv) except as modified 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 accordance preparing or filing similar Tax Returns in prior periods. Notwithstanding the foregoing, the Company shall consult with Cingular and its Representatives prior to claiming any depreciation allowance under Section 168(k) of the terms of this AgreementCode;
(xvi) sell, lease, license, or (2) purchases, repurchases, redemptions or other acquisitions of securities otherwise dispose of any wholly owned Subsidiary assets of the Company by the Company or any other wholly owned Subsidiary its Subsidiaries except for ordinary course sales of mobile telephone equipment to customers of the Company, services provided in the ordinary course of business or obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $25,000,000 in the aggregate, other than pursuant to Contracts in effect prior to the execution of this Agreement and set forth in Section 6.1(a)(iii) of the Company Disclosure Letter or as otherwise set forth in Section 6.1(a)(iii) of the Company Disclosure Letter and other than any dispositions of assets to the extent used as consideration for acquisitions that are permitted pursuant to Section 6.1(a)(iii);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iiixvii) except as expressly required pursuant to existing written, binding agreements in effect prior to the execution of this Agreement, as otherwise required by any Company Plan as in effect on the date hereof: (A) establishLaw, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (Bwhich with respect to annual bonus plans and performance share awards is set forth in Section 6.1(a)(xvii) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its SubsidiariesDisclosure Letter), (Ci) increase the compensation, bonus enter into any commitment to provide any severance or pension, welfare termination benefits to (or other benefits of amend any existing arrangement with) any director, officer or employee of the Company or any of its Subsidiaries, except in (ii) increase the ordinary course benefits payable under any existing severance or termination benefit policy or employment agreement (other than as required to be increased pursuant to the existing terms of business consistent any such policy or agreement), (iii) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement) with past practice with respect to any director or officer of the Company or any of its Subsidiaries other than for new hires, (1iv) employees below establish, adopt, amend, terminate or make any new awards under any bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any director, officer or employee of the level Company or any of Executive Vice President and its Subsidiaries (2v) employees at or above increase 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 severance or termination payments or benefits payable to any director, officer, employee employee, consultant or other service provider independent contractor of the Company or any of its Subsidiaries, or (Evi) amend the terms of any outstanding Company Option or other equity-based award; provided, that the Company shall in no event take any action to accelerate the vesting or payment of compensation or benefits under amend its severance plans, except as required by applicable Law;
(xviii) fail to initiate appropriate steps to renew any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of material FCC Licenses held by the Company or any of its SubsidiariesSubsidiaries that are scheduled to terminate prior to or within 60 days after the Effective Time;
(ivxix) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) engage in the ordinary course conduct of any business requiring the receipt or transfer of a License issued by a Governmental Entity other than engaging in the mobile wireless voice and data business in the U.S. and activities incident thereto, other than any other current lines 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations geographic locations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to as expressly permitted by Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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)(v6.1(a)(iii) of the Company Disclosure Letter;
(vixx) except as otherwise permitted hereby with respect to the Retained Businessemployees, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of enter into any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses Contract with or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually engage in any event (material transaction with DoCoMo or any other than transactions among Affiliate of the 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 SpinCo Business and (E) Affiliation AgreementsCompany;
(viixxi) with respect to the Retained Businessadopt a technology platform other than existing technologies, 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 including any Intellectual Propertyanalog, which is governed by Section 5.01(b)(vi)TDMA, EDGE, GSM and GPRS), except for HSDPA or UMTS and W-CDMA (Aincluding in each case the standards set forth on Section 6.1(a)(xxi) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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)(viiiDisclosure Letter);
(ixxxii) with respect to amend, modify or waive any provision under the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(vRights Agreement; and
(xxiii) 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 agree or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 foregoing.
(b) Each of SBC and BellSouth will cause Cingular and Cingular Wireless to take all action necessary to consummate the agreement for such acquisition); provided that neither transactions contemplated by this Agreement subject to the Company terms and conditions hereof. Neither SBC nor BellSouth will take or permit any of its Retained Subsidiaries shall enter into to take any action that at the time of taking such transaction that would, or would action is reasonably be expected to, prevent, materially delay or materially impair likely to prevent the consummation of the Transactions;
Merger. Except as set forth in the corresponding section of the disclosure letter delivered by SBC to the Company at the time of entering into this Agreement (xthe "SBC Disclosure Letter"), neither SBC nor BellSouth shall, and each shall cause its Subsidiaries not to, prior to the Termination Date, (i) enter into any definitive agreement for the acquisition of any business or Person which provides commercial mobile wireless voice and data services offered to the public utilizing frequencies and spectrum licensed by the FCC, other than capital expenditures made the provision of such services in accordance de minimis amounts or (ii) take any action which would, at the time the action is taken, reasonably be expected to materially interfere with Section 5.01(b)(v) its ability to make available to Cingular or the Paying Agent as of the Effective Time funds sufficient for its Specified Interest of the Merger Consideration. Each of SBC and other than purchases BellSouth will, subject to the terms and licenses conditions of film and television and production programming (includinthis Agreement, make available to Cingular or the Paying Agent its Specified Interest of the Merger Consideration.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Cingular Wireless LLC), Agreement and Plan of Merger (Cingular Wireless LLC)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including as set forth in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(aPart 4.1(a) of the Company Disclosure Letter)Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly required by this Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, conduct its business in the ordinary course consistent with past practice in all material respects and use its commercially reasonable best efforts to conduct maintain and preserve intact its business organization and maintain satisfactory relationships with customers, suppliers and distributors and other Persons with whom the Retained Business Company or any Company Subsidiary has material business relations. 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 (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, (3) as may be required by applicable Legal Requirements or (4) as expressly or required by this Agreement, the Company shall not (and shall not permit any Company Subsidiary to), in each case by merger, consolidation, division, operation of law, or otherwise:
(i) amend the Company’s Organizational Documents or the Organizational Documents of any Company Subsidiary;
(ii) split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of the Company’s capital stock or other equity interests of the Company or any Company Subsidiary;
(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 the Company’s capital stock or the capital stock or other equity interest of any Company Subsidiary, other than (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 wholly owned Company Subsidiary 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, 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, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, ; or (E) purchasedispositions of assets which do not constitute Company IP, and with respect to which the fair market value of all such assets does not exceed $10,000,000 in the aggregate;
(vii) directly or indirectly repurchase, redeem or otherwise acquire any shares of its 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 into or exercisable for any shares of its the Company’s or any Company Subsidiary’s capital stock or equity interests, except: (other than (1A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the forfeiture of, or withholding exercise 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 repurchase rights binding on the Company Stock Plans as in effect on and existing prior to the date of this Agreement 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 modified after the date of this Agreement applicable, in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable award;
(iiviii) merge (A) incur, redeem, repurchase, prepay, defease, or consolidate with cancel 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 or capital contributions to any other Person, or restructure, reorganize or completely or partially liquidate except for: (other than transactions 1) repayment of the type contemplated by Section 5.01(b)(vii2021 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 Section 5.01(b)(ixletters of credit, (3) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of any indebtedness among the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, its wholly owned Subsidiaries or the restructuring, reorganization or liquidation of, among any wholly owned Subsidiaries of the Company that would (and guarantees by the Company or its Subsidiaries in respect thereof) and (4) purchase money financings and capital leases entered into in the ordinary course of business in an aggregate amount not prevent, materially delay to exceed $25,000,000 at any time outstanding; or materially impair the Transactions);
(iiiB) except as expressly required by incur any Company Plan as in effect Lien on the date hereof: (A) establish, adopt, amend any of its material property or terminate any material Company Plan or amend the terms of any outstanding equity-based awards assets other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such and except for Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, Permitted Encumbrances;
(BA) 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice adopt, terminate or amend any Company Plan other than if such action would not increase the annual expense of the given Company Plan by a material amount (but in no event will the aggregate amount of all increases in such expenses exceed $10,000,000), provided, that the Company may enter into offer letters, employment agreements and similar arrangements with respect to (1) employees below the level of Executive Corporate 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, (EB) commercial paper issued 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 director, 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 a principal amount not to exceed $250,000,000 in the aggregate at any time outstandingpractice, (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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under of employees at a level below Corporate Vice President that would not increase the Bridge Facility, refinancings or replacements thereof and number of commitments thereunder, and any refinancings or replacements Vice Presidents by more than 10% over the number 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 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 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 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 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 similar state, local or non-U.S. Legal Requirement) (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), request any Tax ruling from any Governmental Entity, surrender any right to claim a 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 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 (which would include the Company and the Company Subsidiaries) after the Closing Date;
(xiii) sell, transfer, assign, exclusively license, or otherwise dispose of to 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) 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;
(xvi) 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 Plan otherwise permitted under this Agreement or 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 partial liquidation of the Company or any Subsidiary of the Company 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 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 (2) commencing any counterclaim to preserve, protect or 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 connection a manner that adversely impacts the Company’s ability to conduct its business in any material respect or (B) terminate or allow to lapse any material Company Permits;
(xxi) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with a Sky Acquisition and not for speculative purposes; provided that respect to any material Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than in its reasonable business judgment or in the ordinary course of business consistent with past practice, or (B) authorize the disclosure to any third party of any material Trade Secret included in the Company shall consult with Parent prior to entering into hedging activities IP in connection with Indebtedness a way that results in loss of the type described in clauses (G) or (H) abovetrade secret protection, (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 other than in the ordinary course of business consistent with past practice;
(vxxii) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) except in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinind
Appears in 2 contracts
Sources: Merger Agreement (Xilinx Inc), Merger Agreement (Advanced Micro Devices Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement until the earlier of the Gulf Effective Time and prior 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 First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries 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 efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business associates and others having material significant business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) them and keep available the services of the Company 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 (b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which 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 which determination shall take into account the Company Overview Presentationtermination of this Agreement pursuant to Article VIII, and except as otherwise expressly (1A) contemplated by this Agreement, (B) required by applicable Law, (2C) expressly as approved in writing by Parent (which approval shall not be unreasonably withheld, conditioned or delayed), (D) required by the Transaction Documents (including in connection with the Separation and the Distribution) under any Material Contract or (3E) otherwise expressly disclosed set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets 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, 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 or Parent, as applicable, to consummate the Transactions prior to the Outside Date;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case of clause (A)), (A) amend the F▇▇▇▇▇▇▇ Agreement or (B) the issuance of shares (i) by its certificate wholly owned Subsidiary to it or another of incorporation its wholly owned Subsidiaries, (ii) in respect of Company 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 or bylaws (iii) in connection with the exercise of warrants outstanding as of the date of this Agreement, or comparable governing documentssecurities 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 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 any loans, advances, guarantees or capital contributions to or investments in any Person (other than amendments to the governing documents of any Subsidiary of or from the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify and any of its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary Subsidiaries or to or from Parent and any of the Company which remains a its wholly owned Subsidiary after consummation Subsidiaries, as applicable) in excess of such transaction), $200,000 individually or $500,000 in the aggregate;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary);
(viii) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, shares of Company Restricted Common Stock Units, to satisfy withholding Tax obligations upon the vesting or settlement of Company Deferred Stock Units or Company Performance Stock Units, in each case RSUs outstanding as of the date of this Agreement in accordance with past practice and with the their terms of and, as applicable, the Company Stock Plans Plan as in effect on the date of this Agreement Agreement;
(ix) incur any Indebtedness (including the issuance of any debt securities, warrants or as modified after other rights to acquire any debt security), except for (A) Indebtedness for borrowed money incurred in the Ordinary Course not to exceed $200,000 individually or $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 to the extent expressly provided by, and consistent with the line items set forth in, the Company’s capital budget set forth in Section 6.1(a)(x) of the Company Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures;
(xi) 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 amend or modify in any material respect, supplement, waive any material term, terminate, assign, convey, 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 this Agreementsuch Contract;
(xii) 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;
(2xiii) purchases, repurchases, redemptions settle any Proceeding for an amount in excess of $200,000 individually or other acquisitions $500,000 in the aggregate or any obligation or liability of securities it in excess of such amount or on a basis that would result in the imposition of any wholly owned Subsidiary 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 by and its Subsidiaries solely within the United States;
(xvi) materially modify, cancel, terminate, rescind or adversely affect any Company Material License;
(xvii) other than in the 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 material Taxes, enter into any closing agreement with respect to Taxes or settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a 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 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, or, in respect of any other wholly owned Subsidiary taxable period (or portion thereof) ending after the Closing Date, the Tax liability of the Company)Parent or its Affiliates;
(iixviii) merge transfer, sell, lease, divest, cancel or consolidate with any other Personotherwise dispose of, or restructure, reorganize permit or completely or partially liquidate (other than transactions suffer to exist the creation 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 Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation ofany Encumbrance upon, any wholly owned Subsidiaries of the Company that would not preventassets (tangible or intangible), materially delay product lines or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 businesses of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee including capital stock of the Company or and any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests services provided in connection with the production or financing of film Ordinary Course and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the Company obsolete assets 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or tangible assets (excluding capital stock of the Retained Subsidiariesnot including services) with a fair market value not in excess of $50,000,000 200,000 individually if the transaction is not or $500,000 in the ordinary course aggregate;
(xix) cancel, abandon or $100,000,000 individually 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 of this Agreement or in the Ordinary Course, (A) increase the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any event or Company Employee, (B) transactions among 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 and Benefit Plan, (D) take any action to accelerate the Retained Subsidiariesvesting 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 an annual salary or wage rate or consulting fees in excess of $250,000;
(viiixxi) except become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xxii) utilize government borrowing, grant programs, or social insurance programs, such as the CARES Act, in each case related to the COVID-19 pandemic;
(xxiii) make or authorize any payment or spending, or accrual or commitment for any payment or spending (including payment or spending with respect to SpinCo advertising and marketing activities), in connection with entering into any new geographic area or new line of business;
(xxiv) apply or seek to apply for any license that, if granted, would be reasonably expected to be a Company Material License had it been granted prior to date of 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) 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 SpinCo Subsidiariestermination of this Agreement pursuant to Article VIII (unless the Company shall otherwise approve in writing (which approval shall not be unreasonably withheld, issueconditioned or delayed)), deliverexcept as otherwise expressly (A) contemplated by this Agreement, sell(B) required by applicable Law, grant(C) required under Contracts to which Parent or any of its Subsidiaries is a party or (D) set forth on Section 6.1(b) of the Parent Disclosure Letter, transferParent shall not, and shall cause its Subsidiaries not to:
(i) adopt or propose any change in Parent’s Organizational Documents in any manner that would prohibit the consummation of the 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 the 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 encumber, issue or authorize the issuanceissuance of any other securities in respect of, delivery, sale, grant, transfer in lieu of or encumbrance ofin substitution for, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 manner that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair to have a material and adverse impact on the consummation value of the Transactions;Parent Class A Common Stock; or
(xiv) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent or the Company, directly or indirectly, the right to control or direct the other than capital expenditures made Party’s operations prior to the Gulf Effective Time. Prior to the Gulf Effective Time, 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 accordance 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 5.01(b)(v) and other than purchases and licenses 6.1 or elsewhere in this Agreement to the extent that the requirement of film and television and production programming (includinsuch consent 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) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time Time, except as expressly contemplated or permitted by this Agreement or required by applicable Law or with the prior written approval of Parent (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned delayed or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letterconditioned), the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course. To the extent consistent with the foregoing and except as otherwise consented to by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having other Persons with whom the Company or its Subsidiaries has a 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) relationship. Without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and until the Effective Time, except (w) as otherwise expressly contemplated or permitted by this Agreement, (x) with the prior written approval of Parent (not to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned delayed or delayedconditioned), and which determination shall take into account the Company Overview Presentation, and except (y) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or (3z) otherwise expressly disclosed as set forth in Section 5.01(b5.1(a) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws by-laws or other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person;
(iii) make any acquisition (whether by merger, consolidation, or acquisition of stock or assets) of any interest in any Person or any 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 transaction or series of related transactions, or (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, grant, transfer, encumber or otherwise dispose of any shares of capital stock of the Company 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 (other than amendments (A) the issuance of shares of Class A Common Stock upon the settlement of Company Options or Company Restricted Stock Awards, (B) in satisfaction of obligations pursuant to Contracts or Plans existing as of the governing documents of any date hereof, (C) by a wholly-owned Subsidiary of the Company that would not prevent, delay to the Company or impair another wholly-owned Subsidiary of the Initial Merger or the other Transactions)Company, (BD) the issuance of equity 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 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 the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $2,000,000 in the aggregate;
(vi) declare, set aside, establish a record date for, make or pay any dividend or other distribution (whether payable in cash, stock, property or otherwise) with respect to any of its capital stock (except dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary);
(vii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant the acquisition of any shares of Class A Common Stock tendered by current or former employees or directors in order to pay Taxes in connection with the forfeiture of, settlement of Company Options or withholding of Taxes with respect to, Company Restricted Stock Units, Awards and other than in connection with a customary cashless exercise of Company Deferred Stock Units Options);
(viii) incur 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 (enter into any agreement to incur any indebtedness for borrowed money or as modified after the date of this Agreement in accordance with the terms of this Agreement) issue or (2) purchases, repurchases, redemptions sell any debt securities or other acquisitions of warrants or rights to acquire any debt securities of any wholly owned Subsidiary of the Company by the Company or any of its Subsidiaries or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person (other wholly 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 lapse in federal agencies’ authority to appropriate funds or curtails funding for nonessential activities in certain federal agencies or departments under the Company’s existing revolving credit facility in an aggregate amount not to exceed the maximum amount authorized under that agreement at any time to be outstanding;
(iiix) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate except (other than transactions of the type contemplated by A) as set forth in Section 5.01(b)(vii5.1(a)(ix) 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 Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongDisclosure Schedule, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iiiB) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice or (C) for expenditures related to operational emergencies, make or authorize any capital expenditure in excess of $2,000,000 in the aggregate;
(x) settle or compromise any litigation, claim or other proceeding against the Company or any of its Subsidiaries other than settlements or compromises where the amounts paid by the Company or any of its Subsidiaries in settlement or compromise do not exceed $2,000,000, in the aggregate; provided that does the foregoing shall not materially increase permit the cost Company or any of such Company Plan its Subsidiaries to settle any litigation, claim or benefits provided under such Company Plan based other proceeding that would impose material restrictions or changes on the cost on business or operations of the date hereofCompany or any of its Subsidiaries;
(xi) transfer, sell, lease, license, mortgage, pledge, surrender, 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 assets, rights (including Intellectual Property), properties, product lines or businesses of the Company or its Subsidiaries, other than (A) in the ordinary course of business, (B) pursuant to Contracts existing as of the date hereof or (C) transactions solely among the Company and/or its wholly-owned Subsidiaries;
(xii) 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, pay or commit to grant or provide pay any transaction material severance or retention bonuses termination 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 other service provider consultant of the Company or any of its Subsidiaries, (CE) otherwise increase the compensation, bonus or pension, welfare commit to increase any compensation or other employee benefits of payable to any director, officer or employee of the Company or any of its Subsidiaries, except Subsidiaries or (F) fund or in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination any way secure any payments or benefits payable to under any directorPlan;
(xiii) adopt or enter into a plan or agreement of complete or partial liquidation, officerdissolution, employee merger, consolidation or other service provider reorganization of the Company or any of its Subsidiaries, Subsidiaries (E) take any action to accelerate other than the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awardsMerger), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(ivA) incur modify, amend or terminate any Indebtedness or issue any warrants or Material Contract other rights to acquire any Indebtedness, except than (A1) in the ordinary course of business consistent with past practice in a principal amount not or (2) modifications or amendments which are immaterial, or (B) enter into any new Contract or agreement that, if entered into prior 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 Indebtednessthis Agreement, (Bwould have been required to be listed in Section 3.15(a) 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 of the Company and its Subsidiaries, taken Disclosure Schedule as a whole, Material Contract other 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 (it being understood that the foregoing exception to this clause (B) shall not permit the entry into any Contract with an Affiliate or a “related person” (as such term is defined in item 404(a) of Regulation S-K under the Exchange Act));
(xv) 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 principal amount not change in Tax liability, taxable income or loss, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to exceed $250,000,000 in the aggregate at any time outstandingTax liability, or (F) Indebtednessgive or request any waiver of a statute of limitation with respect to any Tax Return, the proceeds of which will be used to finance all provided, that such election, settlement, amended Tax Return or any other action described in the foregoing 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 (FSection 5.1(a)(xvi) shall not exceed $9,000,000,000; providedrequire prior written consent of Parent if all such actions, furtherin the aggregate, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect would not reasonably be expected to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations result 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 cost 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;500,000; or
(viiixvii) except with respect to SpinCo and the SpinCo Subsidiariesagree, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 foregoing.
(b) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the agreement for such acquisition); provided that neither right to control or direct the Company nor Company’s or any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair Subsidiaries’ operations prior to the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinEffective Time.
Appears in 2 contracts
Sources: Merger Agreement (Providence Equity Partners VI L P), Merger Agreement (Sra International Inc)
Interim Operations. Except as may be (ai) The Company covenants and agrees as expressly provided for in this Agreement, (ii) expressly provided for in the Merger Agreement (including the Schedules), (iii) required by applicable Law or (iv) consented to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time in writing by Buyer in advance (unless Parent shall otherwise approve in writing, which approval shall consent will not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and Sellers shall cause each of its the Companies and the Company Subsidiaries to, use its reasonable best efforts and Westway Canada shall (with respect to conduct the Retained Business Canadian Feed Business), carry on their respective business in the ordinary course of business consistent with past practice, and, to the extent consistent therewith, the Sellers shall cause the Companies and the Company shall, Subsidiaries to and Westway Canada shall cause each of its Subsidiaries to, solely (with respect to the extent related to the Retained Canadian Feed Business, subject to compliance with the specific matters set forth below, ) use commercially reasonable best efforts to preserve substantially intact their respective business organization, to keep available the Retained Business’ organization intact services of their respective current officers and maintain the Retained Business’ existing relations and goodwill employees, to preserve their respective present relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees licensees and other Persons having business associates relationships with them. The Parties agree that each of ▇▇▇▇ ▇▇▇▇▇▇▇ 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 ▇▇▇ ▇▇▇▇▇▇▇ shall be authorized to provide consent on behalf of the Company and its Subsidiaries’ present employees and agents.
(b) Buyer for purposes of this Section 5.1. Without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after between the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingClosing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) otherwise expressly provided for in this Agreement or as set forth in Schedule 5.1 or as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and Sellers shall not permit any of its the 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 be unreasonably withheld conditioned or delayed):
(a) amend or propose to amend 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) except with respect as pursuant to SpinCo and this Agreement, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any securities of any of the SpinCo Companies, the Company Subsidiaries or Westway Canada or (other than in the case of clause (A)), iii) except (A) amend its certificate of incorporation for transfers which would cause either a net cash inflow or bylaws (or comparable governing documents) (other than amendments to outflow between the governing documents of any Subsidiary of Feed Intercompany Cash Sweep Account and the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)Parent Swingline Account, (B) splitfor the UK Reorganization, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), and (C) in connection with the direct or indirect repatriation (in any form or method approved by the relevant entity) of cash or cash equivalents to Netherlands Holdings or its direct or indirect owners, or (D) as otherwise consistent with past practice, declare, set aside or pay any dividend or distribution payable (whether in cash, stock stock, property or property (or any combination thereofotherwise) in respect of any shares of its capital stock (except for (1) any dividends of, or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement Contract with respect to the voting of its capital stockor registration of, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock the Companies’, the Company Subsidiaries’ or any securities convertible or exchangeable into or exercisable for any shares of its Westway Canada’s capital stock (other than (1) pursuant to the forfeiture of, dividends from its direct 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 wholly indirect wholly-owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the CompanySubsidiary);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Westway Group, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including as set forth in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(aPart 4.1(a) of the Company Disclosure Letter)Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly required by this Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, use conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business consistent with past practice, in all material respects and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to maintain and preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entitiesits business organization, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 key employees and agents.
(b) maintain satisfactory relationships with customers, suppliers and distributors. Without limiting the generality of, and in furtherance of, the foregoing, during the Company covenants and agrees as to itself and its Subsidiaries that, period from and after the date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including as set forth in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(bPart 4.1(a) of the Company Disclosure Letter)Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the Company shall not (and shall not permit any of its Subsidiaries Company Subsidiary to:):
(i) except with respect to SpinCo and amend the SpinCo Subsidiaries Company’s Organizational Documents or the Organizational Documents of any Company Subsidiary (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments any amendment to the governing documents Organizational Documents of any Company Subsidiary of the Company that would not preventreasonably be expected to be adverse to Parent or to impair, prevent or delay or impair the Initial Merger or consummation of any of the other Transactionstransactions contemplated hereby), ;
(Bii) split, combine, subdivide subdivide, amend the terms of or reclassify its outstanding any shares of the Company’s capital stock stock;
(except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Ciii) declare, set aside aside, make or pay any dividend or other distribution (whether payable in cash, stock or property (or any combination thereofproperty) in with respect of to any shares of its the Company’s capital stock or the capital stock of any Company Subsidiary, other than (except for 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 (1B) any dividends or distributions paid by a direct or indirect any wholly owned Company Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other another wholly owned Subsidiary of the Company);
(iiiv) merge acquire (by merger, consolidation, acquisition of stock or consolidate with assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person, (C) any business, or restructure(D) any assets, reorganize or completely or partially liquidate except, (other than transactions of the type contemplated 1) acquisitions 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 from any wholly owned Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, among any wholly owned Subsidiaries of the Company that would not preventCompany; (2) the purchase of equipment, materially delay or materially impair supplies and inventory in the Transactions);
ordinary course of business, (iii3) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms inbound licenses of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan Intellectual Property in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinor
Appears in 2 contracts
Sources: Merger Agreement (Analog Devices Inc), Merger Agreement (Maxim Integrated Products Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned)), and except as (1) otherwise expressly contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practicepractice and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance consistent with the specific matters set forth belowforegoing, the Company and its Subsidiaries shall use their respective commercially reasonable efforts to (u) preserve the Retained Business’ organization intact and their business organizations substantially intact, (v) maintain the Retained Business’ existing relations and goodwill satisfactory relationships with Governmental Entities, customers, customers and suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersw) and keep available the services of their key employees, key consultants and executive officers, (x) in connection with any and all clinical trial(s) for DX-2930, notify Parent (i) promptly after receipt of any material communication from any Regulatory Authority or inspections of any manufacturing, research and development or clinical trial site and before giving any material submission to a Regulatory Authority and (ii) a reasonable time prior to making any material change to a study protocol, adding new trials, making any material change to a manufacturing plan or process, or making a material change to the development timeline, and (z) preserve and protect the Intellectual Property owned by the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of; provided, and in furtherance ofhowever, the foregoing, that no action taken by the Company covenants and agrees as to itself and or its Subsidiaries that, from and after with respect to matters specifically addressed by clauses (i)-(xvii) of this Section 6.1(a) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. From the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly contemplated or permitted by this Agreement, (B) as Parent shall otherwise may approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except (C) as (1) is required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or any Governmental Entity or (3D) otherwise expressly disclosed as set forth in Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws or other applicable governing instruments, other than, in the case of its Subsidiaries, in a manner that would not materially restrict the operation of its business;
(or comparable governing documentsii) (x) merge or consolidate the Company or any of its Subsidiaries with any other than amendments to the governing documents Person or (y) adopt a partial or complete plan of any Subsidiary dissolution, liquidation, consolidation, recapitalization, restructuring or other reorganization of the Company that would not preventor its Subsidiaries;
(iii) issue, delay sell, pledge, dispose of, grant, transfer, encumber, or impair authorize the Initial Merger issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or the other Transactions)encumbrance of, (B) split, combine, subdivide or reclassify its outstanding any shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation or any of such transactionits Subsidiaries (other than the issuance of Shares upon (x) the exercise or vesting, as applicable, of Company Options or Company RSUs outstanding as of the date hereof or in compliance with this Agreement or (y) in connection with the ESPP in compliance with this Agreement), (C) declare, set aside or pay any dividend securities convertible or distribution payable in cash, stock exchangeable into or property (or any combination thereof) in respect of exercisable for any shares of its 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 iv) make any loans, advances or capital contributions to or investments in any Person (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $1,000,000 in the aggregate;
(v) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to the Company any other direct or (2indirect wholly owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(vi) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, retention 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 acquisition of any wholly owned Subsidiary of the Company Shares tendered by the Company current or any other wholly owned Subsidiary of the Company);
(ii) merge former employees or consolidate with any other Person, or 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 directors in which such Subsidiary is the surviving entity order to pay Taxes in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongthe exercise or vesting, as applicable, of Company Options or Company RSUs or in connection with the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan ESPP in the ordinary course of business consistent with past practice that does not materially increase practice);
(vii) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than a wholly owned Subsidiary of the cost of such Company Plan Company), or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant issue or provide sell any transaction debt securities or retention bonuses to any director, officer, employee warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except than indebtedness in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 an aggregate principal amount not to exceed $400,000,000 in the aggregate 1,000,000 outstanding 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, time;
(x) other 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, acquire any assets or equity interests in any other Person for a fair market value in an amount in excess of (E1) commercial paper issued $1,000,000 in a single transaction or series of related transactions or (2) $5,000,000 in the aggregate and (y) except for expenditures set forth in capital budgets made available to Parent prior to the date of this Agreement, make or authorize any capital expenditure in excess of $1,000,000 in the aggregate during any calendar year;
(ix) (x) make any material changes with respect to financial accounting policies or procedures, except as required by GAAP, or (y) except as required by applicable Laws or GAAP, revalue in any material respect any of its assets, including writing off accounts or notes receivable, other than 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 2 contracts
Sources: Merger Agreement (Shire PLC), Merger Agreement (Dyax Corp)
Interim Operations. (a) The Each of the Company and Parent covenants and agrees as to itself and its Subsidiaries that, from and after during the execution of this Agreement and prior to the First Effective Time Interim Period (unless Parent the Company or Parent, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed) (e-mail from representatives of such other Party on the Integration Planning Committee being sufficient)), and except as (1) otherwise expressly contemplated by this Agreement or the Plan of Conversion, as may be required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Law or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a7.1(a) of the Company such Party’s Disclosure Letter), the Company shall, : (i) such Party and shall cause each of its Subsidiaries to, will use its commercially reasonable best efforts to conduct the Retained Business its business in all material respects in the ordinary course of business consistent with past practice, Ordinary Course; and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, such Party and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorslicensors, licensorslicensees, creditors, lessors, employees Service Providers and business 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 its and its Subsidiaries’ present employees Service Providers and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the generality of, of and in furtherance ofof Section 7.1(a), during the Interim Period, except as otherwise (v) commercially reasonable in response to an Emergency (including incurring expenditures to address or mitigate the effects of any Emergency); (w) expressly contemplated by this Agreement (including the Plan of Conversion, the foregoing, Requisite Parent Vote and the Company covenants and agrees as to itself and its Subsidiaries that, from and after Optional Parent Vote); (x) required by applicable Law; (y) approved in writing by the date of this Agreement and prior to the First Effective Time other Party (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account ) (e-mail from representatives of such other Party on the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Integration Planning Committee being sufficient); or (3z) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company such Party’s Disclosure Letter), the Company each Party, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to 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 materially impair the ability of such Party to consummate the Transactions, the Organizational Documents of any of such Party’s Subsidiaries;
(ii) except for any such transactions among its direct or indirect wholly owned Subsidiaries: (A) merge or consolidate itself or any of its Subsidiaries with respect any other Person; or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets from any other Person: (A) 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), in each case, including any amounts or value reasonably expected to SpinCo and 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 SpinCo Subsidiaries (ability of such Party to consummate the Transactions, other than in the case of clause (A))): (w) acquisitions in the Ordinary Course of inventory or other parts and accessories necessary for the ongoing operation of the business of such Party and its Subsidiaries; (x) acquisitions in order to maintain and sustain such Party’s and its Subsidiaries’ vessels, assets and equipment in the Ordinary Course, including upgrades required by law, customers or class societies; (y) acquisitions pursuant to Material Contracts as in effect on the Signing Date; and (z) transactions among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of: (A) amend any shares of its certificate capital stock or of incorporation any of its Subsidiaries or bylaws (other ownership interest in Company or comparable governing documents) any Subsidiaries (other than amendments (I) Encumbrances that are required by or automatically effected by the Company Credit Agreements or the Parent Credit Agreements, as applicable; or (II) the issuance of shares: (x) by its direct or indirect wholly owned Subsidiary to it or another of its direct or indirect wholly owned Subsidiaries; (y) pursuant to the governing documents exercise or settlement of any Subsidiary equity-based awards or warrants outstanding as of (and on the Company that would not prevent, delay terms in effect on) the Signing Date or impair granted after the Initial Merger Signing Date in accordance with Section 7.1(b)(xvi); or the other Transactions(z) granted in accordance with Section 7.1(b)(xvi) in each of clauses (y) and (z), in accordance with their terms and, as applicable, the plan documents as in effect on the Signing Date); (B) split, combine, subdivide any rights issued by the Company or reclassify any of its outstanding shares Subsidiaries that are linked in any way to the price of any class of its capital stock or of any class of capital stock (except for of any such transaction by a wholly owned subsidiary of its Subsidiaries, their value, the Company which remains a wholly owned Subsidiary after consummation value of such transaction)any of their respective Subsidiaries or any part of its or their assets, business or Subsidiaries or any dividends or other distributions declared or paid on any shares of its capital stock or the capital stock of any of its Subsidiaries; or (C) securities or instruments convertible or exchangeable into or exercisable for any shares of such capital stock or ownership interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or ownership interests or such convertible or exchangeable securities or instruments;
(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 Course on any of its assets or any of its Subsidiaries, except for Encumbrances: (A) that are required by or automatically effected by Contracts in place as of the Signing Date; (B) that do not materially detract from the value of such assets; or (C) that do not materially impair the operations of such Party or any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its direct or indirect wholly owned Subsidiaries or to or from Parent and any of its direct or indirect wholly owned Subsidiaries, as applicable, or in accordance with Section 7.1(b)(xvi)) in excess of $250,000 individually or $1,000,000 in the aggregate;
(vii) except to the extent expressly provided by, and consistent with, Section 7.1(b)(vii) of such Party’s Disclosure Letter, declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or modify in any material respect its dividend policy; provided that, this clause (vii) shall not prohibit Parent from making any dividend or other distribution to the Company extent such distribution or other dividend is made in the Ordinary Course;
(2viii) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(ireclassify, split, combine, subdivide or redeem, purchase (through such Party’s share repurchase program or otherwise) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes 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 shares of Company Common Stock or Parent Common Stock in order to pay the exercise price or Taxes in connection with the exercise, vesting or settlement of Company Restricted Stock Units, Company Deferred Stock Units Equity Awards or Company Performance Stock Units, in each case Parent Equity Awards outstanding as of the Signing Date or granted in accordance with past practice and with Section 7.1(b)(xvi), pursuant to the terms of the Company Stock Plans as or Parent Stock Plans and the applicable award agreement, in effect the Ordinary Course; provided that, this clause (viii) shall not prohibit Parent from undertaking any such action to the extent such action is made in the Ordinary Course;
(ix) 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, any capital expenditures or any regulatory dry dock and related expenses deferred in accordance with such Party’s current accounting policies, except any such expenditures or expenses: (A) not in excess of $15,000,000 in the aggregate during any consecutive 12 month period (other than capital expenditures or dry dock and related expenses within the thresholds set forth in Section 7.1(b)(ix) of such Party’s Disclosure Letter); (B) not in excess of $5,000,000 (net of insurance proceeds) in the aggregate that such Party reasonably determines are necessary to avoid a material business interruption or maintain the safety and integrity of any asset or property; or (C) paid by any direct or indirect wholly owned 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 other Party prior to making or agreeing to any such capital expenditure);
(x) other than in the Ordinary Course (which shall not include any matter that would be required to be disclosed by such Party on Form 8-k, assuming, in the date case of the Company, that the Company was subject to the periodic reporting requirements of Section 13 or Section 15 of the Exchange Act) or in connection with any transaction or potential transaction described in Section 7.1(b)(x) of such Party’s Disclosure Letter, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement Agreement, adversely amend, modify or supplement in any material respect, or waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, any material right or interest pursuant to or in, any Material Contract other than: (or as modified after A) expirations and renewals of any such Contract in the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, Contract; (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of non-exclusive licenses under Intellectual Property owned by the Company or any of its Subsidiaries, (C) increase the compensation, bonus Subsidiaries or pension, welfare or other benefits of any director, officer or employee of the Company Parent or any of its Subsidiaries, except as applicable, in each case, granted to customers in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined Ordinary Course; or (GC) forgive any loans to directors, officers agreement among such Party and its direct or employees of the Company indirect wholly owned Subsidiaries or any of its among such Party’s direct or indirect wholly owned Subsidiaries;
(ivxi) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than in the ordinary course of business consistent with past practice in a principal amount Ordinary Course (which shall not include any matter that would be required to exceed $400,000,000 be disclosed by such Party on Form 8-k, assuming, in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial case of the Company, that the Company was subject to the Company periodic reporting requirements of Section 13 or Section 15 of the Exchange Act) 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 against such Party or its Subsidiaries (other than existing Indebtednessany material Proceeding relating to Taxes), and with including before a maturity date no more than 10 years after the date of the Contract evidencing Governmental Entity, except: (A) for amounts recoverable from insurance in effect for such Indebtedness, Party (or deductibles under such policy); (B) for uninsured amounts not in excess of $5,000,000 in any one instance; or (C) 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 (other than customary confidentiality and release obligations) which, in either case: (x) imposes any material restrictions on the business operations of such Party and its Subsidiaries or Affiliates or (y) includes an admission of fault or criminal culpability;
(xiii) amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(xiv) (A) make (outside of the Ordinary Course), change or revoke any material election with respect to Taxes or Tax matters if such action would result in a material net increase in the Bridge FacilityTax liability of such Party or its Subsidiaries; (B) change any material Tax accounting method or period; (C) enter into any material closing agreement with respect to Taxes; (D) enter into any material Tax sharing, allocation or indemnification agreement or arrangement (other than (1) such an agreement or arrangement exclusively between or among such Party and its Subsidiaries or (2) a commercial agreement or arrangement the primary purpose of which is not Taxes); (E) settle, compromise or otherwise finally resolve any material Tax claim, audit, assessment or dispute for an amount materially in replacement excess of amounts reserved therefor in accordance with GAAP; (F) surrender any right to claim a refund of a material amount of Taxes; (G) change its tax residency; or (H) take any action that could, or could reasonably be expected to, prevent the transactions contemplated by this Agreement from qualifying for the Intended Tax Treatment;
(xv) transfer, sell, lease, divest, cancel, abandon, allow to lapse or expire or otherwise dispose of, or permit or suffer to refinanceexist the creation of any Encumbrance (other than Permitted Encumbrances) upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including Subsidiaries, or any Intellectual Owned Real Property, which is governed by Section 5.01(b)(vi)), except for 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 any properties or assets (excluding capital stock not including services or sales of inventory in the Retained SubsidiariesOrdinary Course) with a fair market value not in excess of $50,000,000 individually if the 5,000,000 in any transaction is not or series of related transactions in the ordinary course aggregate other than pursuant to Material Contracts in effect prior to the Signing Date, or $100,000,000 individually entered into after the Signing Date in accordance with this Agreement; (D) sales among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries; and (E) the expiration of registered Intellectual Property at the end of its maximum statutory term;
(xvi) except as required by the terms of any event Benefit Plan as in effect on the Signing Date (or as established or amended after the Signing Date in accordance with this Agreement), as expressly permitted under this Agreement or as required by applicable Law, increase or change the compensation or benefits payable to any Service Provider other than in the Ordinary Course; provided, that, notwithstanding the foregoing, except as expressly disclosed in Section 7.1(b)(xvi) of such Party’s Disclosure Letter or required pursuant to a Company Benefit Plan or Parent Benefit Plan, as applicable, in effect as of the Signing Date (or as established or amended after the Signing Date in accordance with this Agreement), the Parties shall not: (A) grant any new long-term incentive or equity-based awards or amend or modify the terms of any outstanding awards under any Company Benefit Plan or Parent Benefit Plan, as applicable; (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiariesgrant any retention or transaction bonuses, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to increase or change the Company compensation or benefits payable to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights Service Provider with annual base salary greater than or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not equal 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);
$300,000 (ix) with respect to the Retained Business, other than capital expenditures made changes in accordance with Section 5.01(b)(v) health and welfare benefits (other than with respect to film and television production and programming severance plans) that do not materially increase benefits or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend result 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includina material in
Appears in 1 contract
Sources: Merger Agreement (Helix Energy Solutions Group Inc)
Interim Operations. (a) The Except as (x) required by applicable Law, (y) otherwise expressly contemplated or expressly required by this Agreement or (z) otherwise set forth in Section 4.1(a) of the Company Disclosure Letter, the Company covenants and agrees as to itself and its Subsidiaries that, from commencing on the date hereof and after ending at the execution of Effective Time or such earlier date as this Agreement and prior to the First Effective Time (may be terminated in accordance with its terms, unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned delayed or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)conditioned, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business their respective businesses in the ordinary course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth belowconsistent therewith, use their respective commercially reasonable efforts to preserve the Retained Business’ organization their respective business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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) associates. Without limiting the generality of, of the foregoing and in furtherance ofthereof, commencing on the foregoingdate hereof and ending at the Effective Time or such earlier date as this Agreement may be terminated in accordance with its terms, except as (A) required by applicable Law, (B) otherwise expressly contemplated or expressly required by this Agreement or (C) otherwise set forth in Section 4.1(a) of the Company covenants and agrees as to itself and its Subsidiaries thatDisclosure Letter, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned, and which determination shall take into account except in the Company Overview Presentation, and except as cases of clauses (1) required by applicable Lawi), (2) expressly required by the Transaction Documents ii), (including in connection with the Separation and the Distributioniii), (iv), (v), (vi), (viii), (x), (xi), (xii)(A) or (3B), (xiii) otherwise expressly disclosed in Section 5.01(bor (xv) or clause (xviii) (solely to the extent relating to one of the Company Disclosure Letterpreceding clauses), as to each of which Parent shall have the right to approve in its sole discretion, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except amend or otherwise change its governing documents;
(ii) merge or consolidate with respect to SpinCo and any other Person or restructure, reorganize or completely or partially liquidate the SpinCo Company or any of its Subsidiaries;
(iii) issue, sell, pledge, dispose of, grant, confer, award, transfer or encumber any shares of capital stock of the Company or any its Subsidiaries (other than in the case of clause (A)), (A) amend its certificate the issuance of incorporation Common Shares upon the exercise of Company Options or bylaws the vesting of Company Restricted Stock in accordance with their terms or (B) the issuance or comparable governing documents) (other than amendments to the governing documents transfer of any capital stock by a wholly-owned Subsidiary of the Company that would not prevent, delay to the Company or impair another wholly-owned Subsidiary of the Initial Merger or the other TransactionsCompany), (B) split, combine, subdivide or reclassify its outstanding 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 any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Civ) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly any wholly-owned Subsidiary of the Company to another direct the Company or indirect wholly to any other wholly-owned Subsidiary of the Company Company);
(v) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1A) the acquisition of any Common Shares tendered by Employees or current or former directors in connection with the cashless exercise of Company Options or in order to pay Taxes in connection with the exercise of Company Options or the vesting of Company Restricted Stock, (B) pursuant to the forfeiture of, of Company Options or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case (C) from former employees and directors in accordance with past practice and agreements providing for the repurchase of shares of capital stock in connection with the terms any termination 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 wholly owned Subsidiary of the Company by services to the Company or any of its Subsidiaries;
(vi) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other wholly than a wholly-owned Subsidiary of the Company), 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, other than with respect to letters of credit or similar agreements in the ordinary course of business;
(iivii) merge make any material changes in accounting methods, principles or consolidate with any other Personpractices, except as required by changes in GAAP;
(viii) except as required pursuant to existing written agreements or restructure, reorganize or completely or partially liquidate (other than transactions Benefit Plans in effect as of the type contemplated by Section 5.01(b)(viidate hereof, (A) increase the compensation or Section 5.01(b)(ix) which are not restricted thereby and other than mergers benefits payable or consolidations to become payable to directors or executive officers of the Company or any of its Subsidiaries (except, in the case of a director or executive officer of a Subsidiary of the Company that is not a management-level employee of the Company, in which such Subsidiary is the surviving entity in connection ordinary course of business consistent with an acquisition not otherwise prohibited by this Agreement and other than mergers amongpast practice), (B) grant or materially increase any retention, severance or termination pay to, or enter into or materially amend any retention agreement, severance agreement or termination agreement with any director or executive officer of the restructuringCompany or any of its Subsidiaries (except, reorganization in the case of a director or liquidation of, any wholly owned Subsidiaries executive officer of a Subsidiary of the Company that would is not preventa management-level employee of the Company, materially delay in the ordinary course of business consistent with past practice), (C) enter into or materially impair amend any employment agreement with any executive officer of the Transactions);
Company or any of its Subsidiaries (iiiexcept for employment agreements terminable on less than 30 calendar days’ notice without penalty to the Company or the applicable Subsidiary or to the extent to replace a departing Employee, in which case, only in the ordinary course of business consistent with past practice) except as expressly required by any Company Plan as in effect on the date hereof: or (AD) establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or Employees or any of their beneficiaries;
(ix) except as required pursuant to existing written agreements or Benefit Plans in effect as of the date hereof, (A) enter into any new, or amend, terminate or renew any existing, bonus or change in control or severance agreement with or for the benefit of any officers, directors or employees of the Company or its Subsidiaries (except, in the case of a director, executive officer or employee of a Subsidiary of the Company that is not a management-level employee of the Company, in the ordinary course of business consistent with past practice), (B) establish, adopt, enter into, amend, renew or terminate any material Company Benefit Plan, (C) make any deposits or contributions of cash or other property to, or take any other action to fund or in any other way secure the payment of compensation or benefits under, Benefit Plans or agreements subject to Benefit Plans or any other plan, agreement, contract or arrangement of the Company, except to the extent required by Law, such Benefit Plan or amend any other agreement, contract or arrangement in effect as of the terms date hereof or in accordance with the ordinary course of business consistent with past practice, or (D) hire or terminate (other than for cause) any employee, except in the ordinary course of business, and except, in the case of each of clauses (A) through (D), (1) to the extent required by applicable Law, this Agreement, any Benefit Plan or any other agreement in effect as of the date hereof and disclosed in the Company Disclosure Letter, (2) in conjunction with agreements or arrangements that are entered into in the ordinary course of business with new hire employees (other than officers and directors of the Company), and, in the case of any outstanding equityindividual who is engaged to replace or succeed a then-based awards current employee (other than any officers and directors of the Company), the total target annual cash compensation for such action taken for purposes of replacingindividual may be increased above the level applicable to such replaced or succeeded employee, renewing but only to the extent necessary on a commercially reasonable basis, (3) annual or extending a broadly applicable material Company Plan other scheduled increases in salary, annual bonus targets, hourly wage rates, perquisites and benefits in the ordinary course of business consistent with past practice or (4) to comply with Section 409A of the Code and guidance applicable thereunder to the extent that does such action would not materially increase reasonably be expected to result in the cost imposition of such a penalty under Section 409A of the Code; provided, however, that, notwithstanding anything herein to the contrary, the Company shall not terminate its Long-Term Incentive Cash Award Plan or benefits provided under such Company Plan based on make payments thereunder in relation to the cost on the date hereoftransactions contemplated by this Agreement;
(x) grant, (B) grant confer or provide any transaction or retention bonuses to any directoraward options, officerconvertible securities, employee restricted stock units or other service provider rights to acquire any capital stock of the Company or any of its Subsidiaries or take any action to cause to be exercisable any otherwise unexercisable Company Option;
(xi) acquire (including by merger, consolidation, business combination, acquisition of stock or assets or otherwise), except in respect of any mergers, consolidations, business combinations or acquisitions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, (C) increase any Person or any division thereof, or all or substantially all of the compensation, bonus or pension, welfare or other benefits assets of any directorPerson in connection with acquisitions or investments, officer or employee of the Company enter into any agreement, arrangement or understanding with respect to any of its Subsidiaries, except such acquisition or investment (other than any confidentiality or similar agreements);
(A) other than in the ordinary course of business consistent with past practice practice, modify or amend in any material respect any Material Contract with respect to a term longer than one (1) employees below year which cannot be terminated without material penalty to the level Company or its applicable Subsidiary upon notice of Executive Vice President and sixty (260) employees at calendar days 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 changeless, (DB) waive, release or assign any material rights or claims under any Material Contract or (C) enter into any Contract that if in existence on the date hereof would have been a Material Contract (other than a renewal or replacement of any existing Material Contract that is expiring by its terms, so long as the terms and conditions of which renewal or replacement Contract, in the aggregate, are not materially less favorable to the Company or its applicable Subsidiary than the existing Material Contract);
(xiii) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber (including securitizations), or subject to any Lien (other than Permitted Liens), or otherwise dispose of, any material portion of its properties or assets (other than in the ordinary course of business consistent with past practice);
(xiv) file any amendment to any Tax Return or make any election relating to Taxes, change any election relating to Taxes already made, adopt or change any accounting method relating to Taxes, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment if any of the foregoing would reasonably be expected to materially increase the severance Tax liability of the Company and its Subsidiaries or termination payments materially reduce a Tax attribute of the Company and its Subsidiaries;
(xv) settle, compromise, discharge or benefits payable agree to settle any directorlitigation, officerinvestigation, employee arbitration or proceeding other service provider of than those that do not involve the payment by the Company or any of its SubsidiariesSubsidiaries of monetary damages in excess of $500,000 in the aggregate, (E) take after taking into account any action to accelerate the vesting or payment of compensation or benefits under applicable reserves and any Company Plan (including applicable insurance coverage, and do not involve any equity-based awards), (F) change any actuarial material injunctive or other assumptions used to calculate funding obligations with respect to any Company Plan material non-monetary relief or to change impose material restrictions on the manner in which contributions to such plans are made business or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees operations of the Company or any of its Subsidiaries;
(ivxvi) incur make any Indebtedness or issue any warrants or other rights to acquire any Indebtednesscapital expenditures, except (A) capital expenditures made in accordance with the Company’s annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or (B) other capital expenditures in the ordinary course of business consistent with past practice in a principal an aggregate amount not to exceed One Million Dollars ($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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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)(viii1,000,000);
(ixxvii) with respect solely to the Retained Businessextent that the Company or a Subsidiary of the Company has the right, other than capital expenditures made but not the obligation, whether by Contract or otherwise, to consent to an action by a Physician Practice which would be subject to the provisions of this Section 4.1(a) (assuming solely for these purposes, that references to a “Subsidiary” instead refer to such “Physician Practice”), grant such consent (it being understood that if the Company or the applicable Subsidiary determines in good faith (after reasonable prior notice to Parent) that it would be unreasonable to withhold its consent to such action, Parent shall be deemed to have consented to such action); or
(xviii) authorize or enter into any written agreement or otherwise make any commitment to do any of the foregoing.
(b) Except as otherwise expressly contemplated or expressly required by this Agreement, Parent and Merger Sub covenant and agree that, commencing on the date hereof and ending at the Effective Time or such earlier date as this Agreement may be terminated in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game productionits terms, which is subject to Section 5.01(b)(x), spend or commit to 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 unless the Company nor any of its Retained Subsidiaries shall otherwise approve in writing, Parent and Merger Sub shall not enter into any such transaction agreement, arrangement or understanding that would, or would reasonably be expected to, to materially prevent, materially delay or materially impair the consummation of the Transactions;transactions contemplated by this Agreement, or propose, announce an intention, enter into any agreement, arrangement or understanding or otherwise make a commitment to take any such action.
(xc) other than capital expenditures made Nothing contained in accordance this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to Control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and notwithstanding anything to the contrary contained in this Agreement, no consent of Parent or Merger Sub will be required with Section 5.01(b)(v) respect to any matter set forth in this Agreement to the extent the requirement of such consent would violate any applicable Law. Prior to the Effective Time, the Company shall exercise, consistent with the terms and other than purchases conditions of this Agreement, complete control and licenses supervision over its operations and the operations of film and television and production programming (includinits Subsidiaries.
Appears in 1 contract
Interim Operations. (a) The Company covenants L3 and agrees ▇▇▇▇▇▇ each covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent L3 or ▇▇▇▇▇▇, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Law or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a8.1(a) of the Company such Party’s Disclosure Letter), the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in all material respects in the Ordinary Course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees Employees and business 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 its and its Subsidiaries’ present employees officers, Employees and agents.
(b) , except as otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless Parent shall otherwise approve i) expressly contemplated by this Agreement, (ii) required by a Governmental Entity or applicable Law or the terms of any Material Contract or Benefit Plan existing as of the date of this Agreement, (iii) as approved in writing, writing by the other Party (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3iv) otherwise expressly disclosed set forth in Section 5.01(b8.1(a) of the Company such Party’s Disclosure Letter), the Company each Party, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to such Party’s Organizational Documents or, except for amendments that would not materially restrict the operations of such Party’s businesses, the Organizational Documents of any of such Party’s Subsidiaries;
(ii) other than in the Ordinary Course, except for any such transactions among its wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with any other Person, or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets outside of the Ordinary Course from any other Person (A) with a fair market value or purchase price in excess of $200 million in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), 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 L3 or ▇▇▇▇▇▇, as applicable, to consummate the Transactions, in each case, other than acquisitions of inventory or other goods in the Ordinary Course;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case issuance of clause (A)), shares (A) amend by its certificate wholly owned Subsidiary to it or another of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)its wholly owned Subsidiaries, (B) splitin respect of equity-based awards outstanding as of the date of this Agreement, combineor (C) granted in accordance with Section 8.1(a)(xviii), subdivide the ESPP or reclassify its outstanding each Party’s 401(k) Plans, 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;
(except for v) create or incur any Encumbrance (other than any Permitted Encumbrances) over any material portion of such transaction by a Party’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the Ordinary Course on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from L3 and any of its wholly owned subsidiary Subsidiaries or to or from ▇▇▇▇▇▇ and any of the Company which remains a its wholly owned Subsidiary after consummation Subsidiaries, as applicable, or in accordance with Section 8.1(a)(xviii)) in excess of such transaction), $50 million in the aggregate;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary Subsidiary); provided, that (A)(1) ▇▇▇▇▇▇ may make, declare and pay one regular quarterly cash dividend in each quarter of the Company or to year ending June 28, 2019 in an amount per share of $0.685 per quarter with a record date consistent with the Company or record date for each quarterly period of the year ended June 29, 2018 and (2) normal semiannual from and after July 1, 2019, ▇▇▇▇▇▇ may make, declare and pay one regular quarterly cash dividends on the Common Stock as described dividend in Section 5.01(b)(i) each quarter of the Company Disclosure Letteryear ending June 30, 2020 in an amount per share up to $0.055 higher than the dividend paid for the same quarterly period of the year ended June 28, 2019 and with a record date consistent with the record date for each quarterly period of the year ended June 28, 2019, if, in the case of clauses (1) and (2), ▇▇▇▇▇▇ provides L3 with written notice of each record date it will select at least twenty (D20) enter into any agreement with respect Business Days prior to the voting declaration date in respect of its capital stocksuch applicable record date and (B)(1) L3 may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2018 in an amount per share of $0.80 per quarter and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2017 and (2) from and after January 1, 2019, L3 may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2019 in an amount per share up to $0.05 higher than the dividend paid for the same quarterly period of the year ended December 31, 2018 and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2018, if, in the case of clauses (1) and (2), L3 provides ▇▇▇▇▇▇ 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, in each case, solely to the extent such payment is coordinated pursuant to, and permitted by, Section 8.17;
(viii) reclassify, split, combine, subdivide or redeem, purchase (Ethrough such Party’s share repurchase program or otherwise) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toto (A) the capital stock or other equity interests of a wholly owned Subsidiary of L3 or ▇▇▇▇▇▇, Company Restricted Stock Units, Company Deferred Stock Units as applicable; (B) net withholding upon the exercise or Company Performance Stock Units, in each case settlement of equity-based awards outstanding as of the date of this Agreement or granted in accordance with past practice Section 8.1(a)(xviii) in the Ordinary Course and in accordance with their terms and, as applicable, the terms of the Company Stock Plans plan documents as in effect on the date of this Agreement Agreement; or (or as modified after C) such Party’s matching contributions to its 401(k) Plans in the date form of this Agreement capital stock in the Ordinary Course and in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan plan documents as in effect on the date hereof: of this Agreement;
(ix) except to the extent expressly provided by, and consistent with, Section 8.1(a)(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) establish, adopt, amend or terminate any to the extent reasonably necessary to avoid a material Company Plan or amend the terms business interruption as a result of any outstanding equity-based awards act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or IT Assets, or any other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in similar cause not reasonably within the ordinary course of business consistent with past practice that does not materially increase the cost control of such Company Plan Party or benefits provided under such Company Plan based on the cost on the date hereofits Subsidiaries, (B) grant not in excess of $50 million in the aggregate during any consecutive twelve (12) month period (other than capital expenditures within the thresholds set forth in Section 8.1(a)(ix) of such Party’s Disclosure Letter), or provide (C) expenditures that such Party reasonably determines are necessary to maintain the safety and integrity of any transaction asset or retention bonuses property in response to any directorunanticipated and subsequently discovered events, officeroccurrences or developments (provided that L3 or ▇▇▇▇▇▇, employee as applicable, will use its reasonable best efforts to consult with the other Party prior to making or agreeing to any such capital expenditure);
(x) other than in the Ordinary Course, enter into any Contract that would have been a Material Contract 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 Material Contract other than (A) expirations of any such Contract in the Ordinary Course in accordance with the terms of such Contract, or (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other service provider of the Company rights under Intellectual Property owned by L3 and its Subsidiaries or ▇▇▇▇▇▇ or any of its Subsidiaries, (C) increase the compensationas applicable, bonus or pensionin each case, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except granted in the ordinary course of business consistent with past practice Ordinary Course;
(xi) other than in the Ordinary Course or with respect to (1) employees below the 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 amounts that are not material to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 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;
(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 8.1(a)(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) make any changes with respect to its material accounting policies or procedures, except as required by changes to GAAP;
(xiv) other than existing Indebtednessin the Ordinary Course, and make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any Tax Return other than on a basis consistent with past practice, enter into any material closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a maturity date no more than 10 years after the date refund of a material amount of Taxes, or agree to an extension or waiver of the Contract evidencing such Indebtedness, (B) except statute of limitations with respect to the Bridge Facilityassessment or determination of any material Tax;
(xv) transfer, in replacement sell, lease, divest, cancel or otherwise dispose of, or permit or suffer to refinanceexist the creation of any Encumbrance upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for in connection with (A) sales of goods or services provided in the Ordinary Course, (B) sales of obsolete assets, and (C) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiariesnot including services) with a fair market value not in excess of $50,000,000 individually if the transaction is not 100 million in the ordinary course aggregate other than pursuant to Material Contracts or $100,000,000 individually Party Government Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with this Agreement;
(xvi) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property that is material to the existing businesses of L3 and its Subsidiaries or ▇▇▇▇▇▇ and its Subsidiaries, as applicable, taken as a whole, as each are currently conducted;
(xvii) amend or fail to comply with L3’s and its Subsidiaries’ or ▇▇▇▇▇▇’ and its Subsidiaries’ or, as applicable, privacy and security policies, or alter the operation or security of any IT Assets owned, used or held for use in the operation of L3’s and its Subsidiaries’ or ▇▇▇▇▇▇’ and its Subsidiaries’ businesses, as applicable, in each case, in a manner that would be materially less protective of any confidential or proprietary information that is owned by or in the possession or control of L3 or any of its Subsidiaries or ▇▇▇▇▇▇ or any of its Subsidiaries, as applicable, including any information stored on or processed by such IT Assets;
(xviii) increase or change the compensation or benefits payable to any Employee other than in the Ordinary Course, provided that, notwithstanding the foregoing, except as expressly disclosed in Section 8.1(a)(xviii) of such Party’s Disclosure Letter or pursuant to a L3 Benefit Plan or ▇▇▇▇▇▇ Benefit Plan, as applicable, in effect as of the date of this Agreement, 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 L3 Benefit Plan or ▇▇▇▇▇▇ Benefit Plan, as applicable; (B) grant any transaction or retention bonuses; (C) increase or change the compensation or benefits payable to any executive officer (other than changes in benefits that are generally applicable to all salaried Employees in the particular geographic region and that are made in the Company Stock PlansOrdinary Course); (D) increase or change the severance terms applicable to any Employee, except that both Parties may pay severance benefits in amounts that would not exceed the levels that would be payable under ▇▇▇▇▇▇’ ▇▇▇▇▇▇▇▇▇ Pay Plan; or (E) 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);
(xix) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization, in each case, other than in the Ordinary Course;
(xx) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security) or guarantee any such Indebtedness, except for (A) Indebtedness for borrowed money incurred in the Ordinary Course under L3’s or ▇▇▇▇▇▇’, as applicable, revolving credit facilities and other lines of credit existing as of the date of this Agreement, (B) Investment Preferred Stock (as defined in the Bridge Facility) guarantees by L3 or (C) by any wholly owned Subsidiaries to the Company Subsidiary of L3 of Indebtedness of L3 or to any other wholly owned Subsidiary of L3, (C) guarantees by ▇▇▇▇▇▇ or any wholly owned Subsidiary of ▇▇▇▇▇▇ of Indebtedness of ▇▇▇▇▇▇ or any other wholly owned Subsidiary of ▇▇▇▇▇▇, (D) Indebtedness incurred in connection with a refinancing or replacement of existing Indebtedness (but in all cases which refinancing or replacement shall not increase the Company; provided that, for the avoidance aggregate amount 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 Indebtedness permitted to be an issuanceoutstanding thereunder and in each case on customary commercial terms consistent in all material respects with the Indebtedness being refinanced or replaced), sale (E) Indebtedness incurred pursuant to letters of credit, performance bonds or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable forother similar arrangements in the Ordinary Course, or any (F) interest, exchange rate and commodity swaps, options, warrants futures, forward contracts and similar derivatives or other rights to acquire, any such shares 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 Section 5.01(b)(viii);
Agreement or (ixG) with respect to Indebtedness incurred by mutual agreement of the Retained Business, other than capital expenditures made Parties in accordance with Section 5.01(b)(v8.8; or (xxi) 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 agree or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;foregoing.
(xb) Nothing contained in this Agreement shall give L3 or ▇▇▇▇▇▇, directly or indirectly, the right to control or direct the other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinParty’s operations prior to the Effective Time. Prior to the Effective Time, each Party will exerc
Appears in 1 contract
Sources: Agreement and Plan of Merger (L3 Technologies, Inc.)
Interim Operations. (a) The Company shall not knowingly take or permit any of its Subsidiaries to take any action or refrain from taking any action the result of which would be reasonably and foreseeably likely to prevent the consummation of the Merger by the Termination Date, except as expressly and specifically permitted by Section 6.2. The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (Time, unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and except as (1) otherwise expressly contemplated by this Agreement or as required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 present employees and agents of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents this Agreement, (including B) as Parent may approve in connection with the Separation and the Distributionwriting (such approval not to be unreasonably withheld or delayed) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b6.1(i) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 1 contract
Interim Operations. (a) The Except as set forth in the corresponding section of the Company Disclosure Schedule (including the capital expenditure, spending and other budgets contained therein) or otherwise as expressly provided hereby, subject to applicable law, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement until the Effective Time, the business of it and prior its Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice and, to the First extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present employees and agents of the Company and its Subsidiaries. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Effective Time Time, the Company will not and will not permit its Subsidiaries to (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed):
(i) adopt or propose any change in its certificate of incorporation or by-laws (or similar governing documents);
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company that are not obligors or guarantors of third party indebtedness;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of $500,000 other than acquisitions pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement (other than any such Contract that is a Significant Contract but is not listed on Section 5.11 of the Company Disclosure Schedule or a true and except correct copy of which was not previously made available to Parent prior to the date hereof);
(iv) other than pursuant to Contracts to the extent in effect as (1) required by applicable Law, (2) expressly required by of immediately prior to the Transaction Documents (including in connection with the Separation execution of this Agreement and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a7.1(a)(iv) of the Company Disclosure Letter)Schedule, and other than the issuance of shares of Common Stock upon the exercise of outstanding Company Options or Company Warrants and pursuant to other Stock-Based Awards granted under other Company equity-based compensation plans, in each case, outstanding on the date hereof, disclosed pursuant to Section 5.2 and in accordance with their terms, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company shall, and shall cause each or any of its Subsidiaries to(other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), use or securities convertible or exchangeable 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 Lien on assets of the Company or any of its reasonable best efforts Subsidiaries that is material, individually or in the aggregate, to conduct the Retained Business Company;
(vi) other than pursuant to Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 7.1(a)(vi) of the Company Disclosure Schedule, make any loan, advance or capital contribution to or investment in any Person (other than a wholly-owned Subsidiary of the Company) in excess of $10,000 in the aggregate;
(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 capital stock (except for dividends or other distributions 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 periodic dividends and other periodic distributions by non-wholly-owned Subsidiaries in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, combine, split, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (except the acceptance of shares of Company Common Stock as payment of the exercise price of stock options or for withholding taxes incurred in connection with the exercise of Company Stock Options or the vesting of restricted stock or other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock UnitsStock-Based Awards, 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable award;
(iiix) merge waive any stock repurchase rights; accelerate, amend or consolidate with any other Personchange the period of exercisability of options or restricted stock, or restructurereprice options granted under any employee, reorganize consultant, director or completely other stock plans; or partially liquidate authorize cash payments in exchange for any options granted under any of such plans (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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as pursuant to cashless exercise provisions in effect on the date hereof: );
(Ax) establishincur any indebtedness for borrowed money or guarantee such indebtedness of another Person, adopt, amend issue or terminate sell any material Company Plan securities or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 warrants or other service provider rights to acquire any security of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare enter into any "keep well" or other benefits agreement to maintain any financial statement condition, except, in the case of each of the foregoing, arrangements by and between any directordirect or indirect wholly-owned Subsidiary of the Company and the Company or any other direct or indirect wholly-owned Subsidiary of the Company;
(xi) make or authorize any capital expenditure, officer except as disclosed in Section 7.1(a) of the Company Disclosure Schedule, or employee any operating expenditure other than in the ordinary course of business and consistent with the operating budgets disclosed in Section 7.1(a) of the Company Disclosure Schedule;
(xii) other than as otherwise permitted by this Agreement, enter into any Contract that would have been a Significant Contract had it been entered into prior to the execution of this Agreement;
(xiii) amend or modify in any material respect, or terminate or waive any material right or benefit under, any Significant Contract;
(xiv) except as required by GAAP or the applicable Law, make any change in financial accounting methods, principles or practices;
(xv) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity for an amount in excess of $50,000 or which would be reasonably likely to have any adverse impact on the operations of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at Subsidiaries or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus on any current or pension, welfare future litigation or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees proceeding of the Company or any of its Subsidiaries;
(ivxvi) incur pay, discharge, settle or satisfy any Indebtedness liabilities or issue obligations of any warrants nature, other than any payment, discharge, settlement or other rights to acquire any Indebtedness, except satisfaction (A) required by applicable Law, (B) in the ordinary course of business or (C) in accordance with their terms, of liabilities or obligations recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports or incurred since the Audit Date;
(xvii) waive the benefits of, agree to modify in any manner, terminate, release any person from, or knowingly fail to use reasonable efforts to enforce, the confidentiality or nondisclosure provisions of any Significant Contract to which the Company or any of its Subsidiaries is a party or of which the Company or any of its Subsidiaries is a named third party beneficiary;
(xviii) cancel or fail to use commercially reasonable efforts to renew, without reasonable substitutes, any insurance policy naming the Company or any of its Subsidiaries as a beneficiary or loss payee;
(xix) sell, lease, license, or otherwise dispose of any assets of the Company or its Subsidiaries except for ordinary course sales of products or services provided in the ordinary course of business consistent with past practice or obsolete assets, and except for sales, leases, licenses or other dispositions of assets with a fair market value not in a principal amount not to exceed excess of $400,000,000 250,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial aggregate, other than pursuant to Contracts in effect prior to the execution of this Agreement (other than any such Contract that is a Significant Contract but is not listed on Section 5.11 of the Company Disclosure Schedule or a true and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after correct copy of which was not previously made available to Parent prior to the date hereof);
(xx) except as required pursuant to existing written, binding agreements or Benefit Plans in effect prior to the execution of this Agreement and set forth in Sections 5.13 or 7.1(a)(xx) of the Contract evidencing such IndebtednessCompany Disclosure Schedule, or as otherwise required by Law or with respect to new hires below the officer level (B) except with respect to clause (6) below, which will be applicable to all new hires), (1) enter into any new employment or compensatory agreements with any officer, employee or director of the Bridge FacilityCompany 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); PROVIDED that, with respect to any new officer that will replace a former officer, the overall compensatory package of such officer is no less favorable (in replacement ofterms of compensation, severance, duration and other matters) than the former officer whom the new officer will replace; (2) promote any employee, other than promotions on terms that are no more favorable (in terms of compensation, severance, duration and other matters) than the terms upon which any employee previously serving in the applicable capacity was entitled; or (3) increase the compensation or employee benefits of any officer, employee, consultant, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to director of the Company and or any of its Subsidiaries, taken as a wholeexcept, with respect to employees only, for increases in the ordinary course of business consistent with past practice (including timing of increases); or (4) hire any officer or director, except in connection with the replacement of an officer whose employment has terminated, PROVIDED the overall compensatory package of such officer is no less favorable (in terms of compensation, severance, duration and other matters) than the Indebtedness being replaced terminated officer; or refinanced(5) adopt or amend any Benefit Plan in any respect that would materially increase the cost of such Benefit Plan to the Company, and in each case with a maturity date no more than 10 years after the date or accelerate vesting or payment under, any Benefit Plan; or (6) agree or commit to provide severance benefits to any newly hired officer, employee or director of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among Company or any of its Subsidiaries other than as required by Benefit Plans set forth on Section 5.13 of the Company Disclosure Schedules;
(xxi) engage in the conduct of any new line of business, other than as expressly permitted by Section 7.1(a)(iii) of the Company Disclosure Schedule (other than any new product or service offerings reflected on the capital expenditure, spending and its wholly owned Subsidiaries, other budgets);
(Dxxii) (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 manage working capital other than in the ordinary course of business consistent with past practice, (E) commercial paper issued in including extending the ordinary course payment of business consistent with past practice in a principal amount not to exceed $250,000,000 in accounts payable, accelerating the aggregate at any time outstanding, (F) Indebtedness, the proceeds collection 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 purposesaccounts receivable; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;or
(vxxiii) with respect to the Retained Businessagree, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make resolve or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 1 contract
Sources: Merger Agreement (Register Com Inc)
Interim Operations. (a) The From the date of this Agreement until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company covenants and agrees as to itself and each of its Subsidiaries thatthat it will use its commercially reasonable efforts, from and after the execution date of this Agreement and prior to until the First Effective Time (Time, unless Parent shall otherwise approve in writing, which approval to cause the business of it and its Subsidiaries to be conducted, in all material respects, in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall not be unreasonably withhelduse their respective commercially reasonable efforts to (a) preserve their business organizations, conditioned or delayed, assets and except as (1) required by applicable Lawlines of business intact, (2b) expressly required 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 the Company and its Subsidiaries, taken as a whole, used by the Transaction Documents (including in connection with the Separation Company and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts and necessary to conduct the Retained Business its business in the ordinary course of business consistent with past practicepractice (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 the Company shall, (d) maintain in all material respects its and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ their existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement in accordance with its terms, except (unless A) as otherwise expressly required by this Agreement, (B) as Parent shall otherwise approve may consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable LawLaws or definitive interpretations thereof or by any Governmental Entity, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b) 4.1 of the Company Disclosure Letter), the Company shall not will not, and shall will not permit any of its Subsidiaries Subsidiaries, to:
(i) except with respect adopt any amendments to SpinCo and the SpinCo Subsidiaries (other than its charter or bylaws or, in the case of clause any Subsidiary that is not a corporation, similar applicable organizational documents;
(A)), ii) (A) amend its certificate adopt a plan of incorporation complete or bylaws (partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or comparable governing documents) other reorganization (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactionsthis Agreement), (B) splitacquire by merging or consolidating with, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary purchasing an equity interest in or portion of the Company which remains a wholly owned Subsidiary after consummation assets of such transaction(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) declaretake or omit to take any action that would cause any rights under Material Intellectual Property, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement including with respect to the voting of its capital stockany registrations or applications for registration, to lapse, be abandoned or cancelled, or (E) purchasefall into the public domain, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, actions 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan omissions in the ordinary course of business consistent with past practice that does and not materially increase the cost otherwise in violation of such Company Plan this Section 4.1, or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance enter into a joint venture or termination payments partnership or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equitysimilar third-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesparty business enterprise;
(iviii) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtednessassets or capital stock from any other Person, except (A) in the ordinary course other than acquisitions 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 assets in the ordinary course of business consistent with past practice;
(viv) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 respect to the Retained Business, transfer, lease, licenseissue, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sellof, grant, transfer, or encumber, or authorize the issuance, deliverysale, salepledge, disposition, grant, transfer or encumbrance of, any shares of its capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options and the settlement of RSU Awards and PSU Awards (and dividend equivalents thereon, if applicable) outstanding on the date of this Agreement or (B) the issuance of shares of capital stock 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 forfor any shares of such capital stock, or any options, warrants or other rights of any kind to acquireacquire 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, make any such sharesloans, except advances or capital contributions to or investments in any Person;
(vi) (A) declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or other property, with respect to its capital stock, except for dividends by any wholly owned direct or indirect Subsidiary of the Company to the Company or any other wholly owned direct or indirect Subsidiary of the Company, (B) split, combine or reclassify the Shares issued pursuant or any other outstanding capital stock of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution therefor, (C) redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of the Company, except for acquisitions, or deemed acquisitions, of Shares or other equity securities of the Company in connection with (1) the satisfaction of Tax withholding obligations with respect to Company Restricted Stock UnitsOptions, RSU Awards or PSU Awards outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Performance Stock Units and Company Deferred Stock Units Options outstanding on the date of this Agreement with Shares (including in accordance connection with “net exercises”) and (3) forfeitures of Company Options, RSU Awards or PSU Awards outstanding on the existing 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 such awards and any Indebtedness, other than Indebtedness incurred under existing revolving credit facilities of the Company Stock Plansfor working capital purposes in the ordinary course of business in an amount not to exceed $150,000,000 in the aggregate (provided that Parent’s prior written consent shall be required in respect of any incremental incurrence of Indebtedness thereunder in excess of $5,000,000). “Indebtedness” of any Person means (A) all indebtedness for borrowed money, (B) Investment Preferred Stock (as defined in the Bridge Facility) any other indebtedness which is evidenced by a note, bond, indenture, debenture or similar Contract, (C) by wholly owned Subsidiaries all capitalized lease obligations of such Person or obligations of such Person to pay the Company or to any other wholly owned Subsidiary deferred and unpaid purchase price 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);
(ix) with respect to the Retained Businessproperty and equipment, 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 spend in excess of (A) $25,000,000 if the transaction is not trade payables incurred 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 of business, whether by merger(D) all obligations of such Person pursuant to securitization or factoring programs or arrangements, consolidation(E) all guarantees and arrangements having the economic effect of a guarantee of such Person of any other Indebtedness of any other Person, purchase (F) net cash payment obligations of property such Person under swaps, options, derivatives and other hedging agreements or assets, licenses or otherwise arrangements that will be payable upon termination thereof (valuing any non-cash consideration at its fair market value as of assuming they were terminated on the date of the agreement for determination), and (G) reimbursement obligations under (i) letters of credit, bank guarantees and other similar contractual obligations entered into by or on behalf of such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldPerson or (ii) surety, customs, reclamation or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) performance bonds other than capital expenditures made those entered into in accordance the ordinary course of business consistent with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinpast practice.
Appears in 1 contract
Interim Operations. The Parties agree as follows with respect to the period from and after the execution of this Agreement.
(a) The Company shall not knowingly take or permit any of its Subsidiaries to take any action or refrain from taking any action the result of which would be reasonably and foreseeably likely to prevent the consummation of the Merger by the Termination Date. Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (Time, unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) otherwise expressly contemplated by this Agreement or as required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 present employees and agents of Company and its Subsidiaries’ present employees , maintain the validity of the Communications Licenses and, except as disclosed in Section 5.1 of the Company Disclosure Letter, comply in all material respects with all requirements of the Communications Licenses and agents.
(b) the rules and regulations of the FCC and State PUCs. Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly required by this Agreement or as permitted in Section 5.6(d), (B) as Parent shall otherwise may approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account (C) as set forth in Section 5.1(a) of the Company Overview PresentationDisclosure Letter and (D), in the case of any of the following clauses in this Section 5.1(a), as may be expressly permitted by another of the following clauses in this Section 5.1(a), the Company will not and except as will not permit its Subsidiaries to:
(1) required by except for the Articles Amendment, adopt or propose any change in its articles of incorporation or by-laws or other applicable Law, governing instruments or amend any term of the Company Shares;
(2) expressly required by the Transaction Documents (including in connection merge or consolidate Company or any of its Subsidiaries with the Separation and the Distribution) any other Person, except for any such transactions among wholly owned Subsidiaries of Company that are not obligors or guarantors of third-party indebtedness, or adopt a plan of liquidation;
(3) acquire assets outside of the Ordinary Course of Business from any other Person with a value or purchase price in excess of $50,000 in the aggregate, other than acquisitions pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement and as otherwise expressly disclosed set forth in Section 5.01(b5.1(a)(3) of the Company Disclosure Letter, and other than capital expenditures as permitted by Section 5.1(a)(12), ;
(4) (x) enter into any material line of business in any geographic area other than the current lines of business of Company shall not and shall not permit or any of its Subsidiaries to:Subsidiaries, and in the geographic areas where they are currently conducted, as of the date hereof or (y) engage in the conduct of any business in any state that would require the receipt or transfer of a Communications License;
(i5) except with respect to SpinCo file for any License outside of the Ordinary Course of Business;
(6) other than as set forth in Section 5.1(a)(6) of the Company Disclosure Letter and other than the SpinCo issuance of shares of Common Stock upon exercise of Employee Stock Options or Warrants or conversion of shares of Preferred Stock outstanding as of the date of this Agreement, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of Company or any its Subsidiaries (other than in the case issuance of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary Subsidiary of Company to Company or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(7) other than (i) in connection with receivables facilities and securitizations as in effect on the date hereof and disclosed in the Company Disclosure Letter and renewals thereof in the Ordinary Course of Business, (ii) in connection with the refinancing of Company’s indebtedness under its credit facility as in effect on the date hereof and disclosed in the Company Disclosure Letter, (iii) Liens created or incurred to secure the purchase price of assets acquired as permitted by Section 5.1(a)12) and (iv) Liens described in clause (ii), (iii), (iv), (v) or (vi) of Section 3.8, create or incur any Lien on any assets of the Company which remains a or any of its Subsidiaries;
(8) other than loans and advances to employees of Company or its Subsidiaries in the Ordinary Course of Business and not in excess of $10,000 at any time outstanding to any employee, make any loans, advances or capital contributions to or investments in any Person (other than Company or any direct or indirect wholly owned Subsidiary after consummation of such transactionCompany), ;
(C9) declare, set aside or pay any dividend or distribution payable with respect to Company’s capital stock (whether in cash, stock or property (or any combination thereof) in respect of or redeem, purchase or acquire any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(10) reclassify, split, combine, subdivide or (E) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock;
(11) other than (1i) pursuant to the forfeiture of, or withholding of Taxes in connection with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice receivables facilities and with the terms of the Company Stock Plans securitizations as in effect on the date of this Agreement (or as modified after the date of this Agreement hereof and disclosed in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by Disclosure Letter and renewals thereof in the Company or any other wholly owned Subsidiary Ordinary Course of the Company);
Business, (ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries refinancing of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan Company’s indebtedness under its credit facility as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan hereof and disclosed in the ordinary course Company Disclosure Letter, and (iii) indebtedness incurred to finance the capital expenditures permitted by Section 5.1(a)(12) and guarantees thereof, incur any indebtedness for borrowed money or guarantee such indebtedness of business consistent with past practice that does not materially increase the cost of such Company Plan another Person, or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant issue or provide sell any transaction debt securities or retention bonuses to any director, officer, employee warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries;
(12) except for the capital expenditures set forth in Section 5.1(a)(12) of the Company Disclosure Letter and asset acquisitions otherwise permitted by Section 5.1(a)(3) (without giving effect to the exception therein for capital expenditures as permitted by this clause (12)), make or authorize any capital expenditure;
(13) enter into any contract or other agreement (x) that would have been a Material Contract as described in Section 3.18 (d), (Cf) or (g) had it been entered into prior to the date of this Agreement, (y) other than in the Ordinary Course of Business, that involves annual consideration in excess of $50,000 or (z) that involves annual consideration in excess of $250,000 and is not terminable by Company and its Subsidiaries without additional payment or penalty (including by any acceleration of remaining amounts), upon not more than 90 days’ notice;
(14) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or by applicable Laws or except as Company, based upon the advice of its independent auditors after consultation with Parent, determines in good faith is advisable to conform to best accounting practices;
(15) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity for an amount to be paid by Company or any of its Subsidiaries in excess of $25,000 or that would be reasonably likely to have any adverse impact on the operations of Company or any of its Subsidiaries;
(16) other than in the Ordinary Course of Business, (i) amend or modify in any material respect adverse to Company or its Subsidiaries, or terminate or waive any material right or benefit of Company or its Subsidiaries under, any Material Contract, or (ii) cancel, modify or waive any debts or claims held by it or waive any rights;
(17) sell, lease, license or otherwise dispose of any assets of Company or its Subsidiaries except (i) in the Ordinary Course of Business or obsolete assets or (ii) as set forth in Section 5.1(a)(17) of the Company Disclosure Letter;
(18) except as (x) required pursuant to existing written, binding agreements in effect prior to the date of this Agreement or as otherwise required by applicable Laws, (y) set forth in Section 5.1(a)(18) of the Company Disclosure Letter or (z) the costs and expenses of which will be a Transaction Expense or Severance Amount, (i) enter into any commitment to provide any severance or termination benefits to (or amend any existing arrangement with) any director, officer or employee of Company or any of its Subsidiaries, other than for severance or termination benefits to employees (other than officers) in the Ordinary Course of Business consistent with past practice and pursuant to the terms of plans, programs or arrangements in effect prior to the date of this Agreement and disclosed on Section 3.18 or 3.25 of the Company Disclosure Letter, (ii) increase the compensationbenefits payable under any existing severance or termination benefit policy or employment agreement (other than as required to be increased pursuant to the existing terms of any such policy or agreement or as a result of ordinary pay raises or promotions), bonus or pension(iii) enter into any employment, welfare severance, change in control, termination, deferred compensation or other benefits of similar agreement (or amend any such existing agreement) with any director, officer or employee of the Company or any of its SubsidiariesSubsidiaries other than pursuant to the terms of any plan or agreement in effect on the date hereof and disclosed on Section 3.18 or 3.25 of the Company Disclosure Letter, (iv) establish, adopt, amend or terminate any employee or director compensation or other benefit, employment or severance plan, program or agreement (including Employee Benefit Plans, each, a “Compensation Plan”), except for technical amendments in the ordinary course Ordinary Course of business consistent with past practice with respect Business, provided that such amendments do not materially increase the cost of such arrangements to Company, (1v) employees below increase the 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 changeof, (D) increase the severance make any new awards under any Compensation Plan to, or termination payments or benefits payable pay any bonus to any director, officer, employee employee, consultant or other service provider independent contractor of the Company or any of its Subsidiaries, except for increases, new awards or payments in the Ordinary Course of Business for employees who are not officers of Company, (Evi) take any action to fund or in any other way secure the payment of compensation or benefits under any Compensation Plan, except as required pursuant to the terms thereof as in effect as of the date of this Agreement, (vii) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Plan Compensation Plan, to the extent not already required in any such Compensation Plan, or (including viii) enter into any equity-based awards)collective bargaining agreements; provided, however, that the prohibitions contained in the foregoing clauses (i) and (v) shall not apply in connection with newly hired or newly promoted employees, in each case to the extent consistent with past practice;
(19) take any action that may reasonably be expected to jeopardize the validity of any of the Communications Licenses or result in the revocation, surrender or any adverse modification of, forfeiture of, or fail to renew under regular terms, any of the Communications Licenses, (Fb) change fail to prosecute with due diligence any actuarial or other assumptions used to calculate funding obligations pending applications with respect to the Communications Licenses, including any Company Plan renewals thereof, and (c) with respect to Communications Licenses, fail to make all material filings and reports and pay all material fees necessary or to change reasonably appropriate for the manner in which contributions to continued operation of the Business, as and when such plans approvals, consents, permits, licenses, filings, or reports or other authorizations are made necessary or the basis on which such contributions are determined appropriate or (Gd) forgive fail to initiate appropriate steps to renew any loans to directors, officers or employees of the material Licenses held by Company or any of its Subsidiaries;Subsidiaries that are scheduled to terminate prior to or within 60 days after the Effective Time or to prosecute any pending applications for any material License; or
(iv20) incur agree or commit to do any Indebtedness of the foregoing.
(b) Parent shall not knowingly take or issue permit any warrants of its Subsidiaries to take any action or other rights refrain from taking any action the result of which would be reasonably and foreseeably likely to acquire any Indebtednessprevent the consummation of the Merger by the Termination Date. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as Company may approve in writing or (C) as set forth in Section 5.1(b) of the Parent Disclosure Letter, Parent will not and will not permit its Subsidiaries to:
(1) adopt or propose any material change in Parent’s certificate of incorporation or by laws or other applicable governing instruments or amend any term of the shares of Parent Stock;
(2) merge or consolidate Parent or Merger Sub with any other Person, sell all or substantially all of Parent’s assets or adopt a plan of liquidation of Parent;
(3) enter into or acquire any new line of business that (i) is material to Parent and its Subsidiaries taken as a whole and (ii) is not strategically related to the current business or operations of Parent and its Subsidiaries;
(4) except for shares of Parent Stock issued for fair value in arm’s length transactions and other than the issuance of shares in the ordinary course of business consistent with past practice in a principal amount not practices pursuant 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 SubsidiariesParent employee benefit plans, taken as a wholeissue, than existing Indebtednesssell, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednesspledge, (B) except with respect to the Bridge Facility, in replacement dispose 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 respect to the Retained Businessgrant, transfer, lease, license, sellguarantee, assignencumber, let lapseor authorize the issuance, abandon, cancel, mortgagesale, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game productiondisposition, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Businessgrant, 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 guarantee or encumbrance of, any shares of its capital stock of Parent or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of Parent to Parent or another wholly owned Subsidiary of Parent), or securities convertible or exchangeable into or exercisable forfor any shares of such capital stock, or any options, warrants warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or other rights of any kind to acquire, acquire any such shares, except (A) for any 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 shares of such awards and the Company capital stock or such convertible or exchangeable securities;
(5) declare, set aside or pay any dividend or distribution (whether in cash, stock or property or any combination thereof) on any shares of Parent Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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 on any shares of capital stock of any Subsidiary, other than by wholly owned Subsidiaries;
(6) reclassify, split, combine or subdivide, or repurchase, redeem or otherwise acquire at prices above fair market value, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for, or for any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);its capital stock; or
(ix7) with respect to the Retained Business, 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 agree or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees Parent, each covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent or the Company, as applicable, shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)), the Company shall, its business and its Subsidiaries’ businesses shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business be conducted in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present officers, employees and agents, except as (i) otherwise expressly contemplated or required by this Agreement, (ii) required by applicable Law or (iii) set forth on Section 6.1(a) of the Company Disclosure Letter, as it relates to the Company and its Subsidiaries’ present employees , or on Section 6.1(a) of the Parent Disclosure Letter, as it relates to Parent and agents.
(b) its Subsidiaries. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior until the Effective Time, except as (A) expressly contemplated or required by this Agreement, (B) required by applicable Law, (C) required by any Benefit Plan or collective bargaining agreement, (D) as approved in writing by the Company or Parent (as applicable) (such approval not to the First 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 in the Company Overview Presentationcase of Parent’s approval, and except as (1) required by applicable Lawwith respect to Section 6.1(a)(iv), (2) expressly required by the Transaction Documents vi), (including in connection with the Separation and the Distributionx), (xi), (xii), (xvi), (xvii), (xiv), (xx) or (3xxi), and in the case of the Company’s approval, with respect to Section 6.1(a)(iv), (vi), (vii), (x), (xi), (xii), (xix), (xx) otherwise expressly disclosed in or (xxi)) or (E) set forth on Section 5.01(b6.1(a) of the Company Disclosure Letter), as it relates to the Company shall and its Subsidiaries, or on Section 6.1(a) of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries, each Party, on its own account, will not and shall not permit any of will cause its Subsidiaries not to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate or articles of incorporation or bylaws (or comparable governing documents) (documents other than amendments that solely effect ministerial changes to the governing such documents of any Subsidiary of the Company and that would not prevent, delay or impair adversely affect the Initial consummation of the Merger or the other Transactions), transactions contemplated by this Agreement;
(B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cii) declare, set aside aside, make or pay any dividend or other distribution (whether payable in cash, stock stock, property or property (or any a combination thereof) with respect to any of its capital stock or other equity interests (other than dividends paid by a wholly owned Subsidiary of such Party to such Party or another wholly owned Subsidiary of such Party);
(iii) except for any transactions among or solely involving a Party’s wholly owned Subsidiaries or among wholly owned Subsidiaries of a Party’s Subsidiaries, merge or consolidate itself or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its material assets, operations or businesses;
(iv) acquire assets or businesses, whether by merger, consolidation, purchase or otherwise, from any other Person with a fair market value or purchase price, in the case of the Company, in excess of $2,000,000 individually or $10,000,000 in the aggregate or, in the case of Parent, in excess of $6,000,000 individually or $30,000,000 in the aggregate, in any transaction or series of related transactions, other than acquisitions of goods, services and supplies in the ordinary course of business;
(v) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, or otherwise enter into any Contract or understanding with respect of to the voting of, any shares of its capital stock (except for or equity interests) or of any of its Subsidiaries (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary other than in respect of equity-based awards outstanding as of the Company to another direct or indirect wholly owned Subsidiary date of this Agreement, in each case in accordance with their terms and the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letterplan documents), or securities convertible or exchangeable into or exercisable for any shares of such capital stock (D) enter into any agreement with respect to the voting of its capital stockor equity interests), or (E) purchaseany options, repurchase, redeem warrants or otherwise other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(vi) create or incur any encumbrance on any assets of such Party or any of its Subsidiaries, other than Permitted Liens or encumbrances incurred in connection with the incurrence of Indebtedness to the extent permitted under Section 6.1(a)(x);
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person, except, in the case of Parent, any such transaction not to exceed $3,000,000 individually or $15,000,000 in the aggregate;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock (or any equity interests) or securities convertible or exchangeable into or exercisable for any shares of its capital stock (or equity interests), other than (1) pursuant to the 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 to (A) 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 capital stock or other acquisitions equity interests of securities of any a wholly owned Subsidiary of the Company or Parent, as applicable, (B) the acquisition of shares of Company Common Stock or Parent Ordinary Shares by the Company or any other wholly owned Subsidiary Parent, respectively, that are tendered by holders of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing to satisfy the obligations to pay the exercise price or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding Tax withholding obligations with respect to any Company Plan or to change such awards, and (C) the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of acquisition by the Company or any Parent of its Subsidiariesequity-based awards in connection with the forfeiture of such awards;
(ivix) incur sell, transfer, lease, divest or otherwise dispose of, whether by merger, consolidation, sale or otherwise, any Indebtedness assets, business or issue a division of any warrants or other rights to acquire any Indebtedness, except (A) business with a value in the ordinary course case of business consistent with past practice the Company, in a principal amount not to exceed excess of $400,000,000 2,000,000 individually or $10,000,000 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 Facilityor, in replacement ofthe case of Parent, in excess of $6,000,000 individually or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to $30,000,000 in 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 programsaggregate, in each case issued, made other than sales of inventory 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 obsolete equipment in the ordinary course of business consistent with past practice;
(vx) with respect incur, assume, guarantee or otherwise become liable for, prepay, redeem or defease any Indebtedness (including the issuance of any debt securities, warrants or other rights to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ixacquire any debt security), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than except for (A) in connection with the repair case of Parent, Indebtedness for borrowed money incurred in the ordinary course of business not to exceed $30,000,000 individually or $50,000,000 in the aggregate, (B) Indebtedness in replacement of facilitiesexisting Indebtedness for borrowed money on terms substantially consistent with or more favorable to Parent than the Indebtedness being replaced, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion C) guarantees of which that is not covered by insurance is less than $100,000,000Indebtedness of its wholly owned Subsidiaries otherwise incurred in compliance with this Section 6.1(a)(x) or (D) Indebtedness incurred by Parent owed to any of its wholly owned Subsidiaries or by any of Parent’s wholly owned Subsidiaries and owed to Parent or any of its wholly owned Subsidiaries, or by the Company owed to any of its wholly owned Subsidiaries or by any of the Company’s wholly owned Subsidiaries and owed to the Company or any of its wholly owned Subsidiaries;
(xi) make or authorize any payment of, or accrual or commitment for, capital expenditures in excess of $12,000,000, in the case of the Company, or $45,000,000, in the case of Parent, except (A) any such expenditure to the extent reasonably necessary to avoid a material business interruption as 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 such Party or its Subsidiaries, or (B) expenditures that the Company or Parent reasonably determines are necessary to maintain the safety and integrity of any asset or property in response to any unanticipated and subsequently discovered events, occurrences or developments (provided that the Company or Parent, as applicable, will use its reasonable best efforts to consult with the other Party prior to making or agreeing to any such capital expenditure);
(xii) (A) enter into any Contract or other arrangement (other than any Contract that is expressly permitted or contemplated to be entered into by this Agreement) that would have been a Material Contract had it been entered into prior to this Agreement, (B) materially amend, modify, supplement, waive, terminate, assign, convey or otherwise transfer, in whole or in part, any Material Contract, or (C) forgive, compromise, cancel, modify or waive any debts or claims held by it or waive any rights having in each case of this clause (C) a value in excess of, in the case of the Company, $1,000,000 individually or $5,000,000 in the aggregate or, in the case of Parent, $3,000,000 individually or $15,000,000 in the aggregate;
(xiii) enter into or modify any Contract relating to, or otherwise enter into, modify, implement or consummate, a Related Party Transaction;
(xiv) other than in the ordinary course of business, settle any action, suit, claim, hearing, arbitration, investigation or other proceedings for an amount, in the case of the Company, in excess of $1,000,000 individually or $5,000,000 in the aggregate or, in the case of Parent, in excess of $3,000,000 individually or $15,000,000 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 writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that would restrict in a material respect the future activity or conduct of such Party or any of its Subsidiaries or involve the admission of any criminal liability;
(xv) make any changes with respect to financial accounting policies or procedures, except as required by GAAP or IFRS, as applicable, or any interpretation thereof, including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or Law, including pursuant to SEC or AMF rule or policy;
(xvi) other than in the ordinary course of business, make, change or revoke any material Tax election, adopt or change any material Tax accounting method, file any material amended Tax Return, take any action which would reasonably be expected to cause the Parent to be treated as a “domestic corporation” pursuant to Section 7874(b) of the Code as a result of the Merger, take any action which would reasonably be expected to cause the Company to be treated as an “expatriated entity” within the meaning of Section 7874(a)(2) of the Code as a result of the Merger, settle or compromise 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 such Party’s Reports, or surrender any right to claim a refund of a material amount of Taxes;
(xvii) other than in accordance with the terms and regular expiration thereof, terminate or permit any material Company Permit (in the case of the Company) or Parent Permit (in the case of Parent) to lapse or fail to apply on a timely basis (subject to any cure periods) for any renewal of any renewable material Company Permit (in the case of the Company) or Parent Permit (in the case of Parent);
(xviii) other than on account of changes in the insurance industry generally in the United States or France, make or agree to any material changes to be made to any insurance policies so as to materially affect the insurance coverage of the Party or its Subsidiaries or assets following the Effective Time;
(xix) enter into, terminate, adopt or amend any employment, change in control or severance agreement or any other Benefit Plan or collective bargaining agreement, except for (A) any amendment to any Benefit Plan (excluding employment, change in control, severance or similar agreement with any individual officer, director or employee) that does not increase the cost of such plan or the benefits provided thereunder to such Party or its Subsidiaries, or (B) actions permitted to be taken by clause (xx) below without the consent of the applicable Party;
(xx) in the case of the Company and its Subsidiaries, (A) increase or change the compensation or benefits payable to any Employees (other than executive officers), other than salary or wage increases for Employees (other than executive officers) in the ordinary course of business and consistent with past practice and which, in the aggregate, do not exceed the previous year’s aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget compensation for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(vall Employees (other than executive officers) of the Company Disclosure Letter;
(vi) 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Propertyby more than 3%, (B) increase or change the granting of compensation or benefits payable to any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per licenseEmployees who are executive officers, (C) sales pay or grant, or commit to pay or grant any bonus or incentive compensation, (D) grant or accelerate the vesting of Intellectual Property any equity-based awards or other compensation or amend or modify the terms of any such outstanding awards, under any Company Benefit Plan, except as provided in this Agreement, (E) grant any transaction or retention bonuses or any discretionary bonus (including bonus plans that exist as of the date hereof), (F) pay annual bonuses or performance bonuses, other than for completed periods based on actual performance through the end of the applicable performance period, or if the Company is contractually obligated to in connection with a fair market value less termination of employment, (G) increase or change the severance terms applicable to any Employee, (H) terminate the employment or services of any Employee that is more senior than a Senior Vice President, other than for cause, or (I) hire any officer, employee, independent contractor or consultant who has target annual compensation greater than $35,000,000 individually if the transaction is not 200,000;
(xxi) in the ordinary course or $75,000,000 individually in any event (other than transactions among case of the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations implement any store closures or mass layoff of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreementsemployees;
(viixxii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose enter into any new line of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock business outside of the Retained Subsidiaries) with existing businesses of a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company Party and the Retained its Subsidiaries;
(viiixxiii) in the case of Parent, permit Merger Sub to incur any obligation or liability, engage in any business or activity of any type or kind whatsoever or enter into any agreement or arrangement with any Person, except for obligations incurred in connection with respect to SpinCo its incorporation, the due diligence investigation of the Company and its Subsidiaries or the negotiation and consummation of this Agreement and the SpinCo Subsidiariestransactions contemplated hereby and thereby; or (xxiv) agree, issue, deliver, sell, grant, transfer, authorize or encumber, or authorize commit to do any of the issuance, delivery, sale, grant, transfer or encumbrance of, any shares foregoing actions prohibited by clauses (i) through (xxiii) of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except this
(Ab) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on From the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement in accordance with the existing terms of such awards Article VIII, Parent and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) shall not take or (C) by wholly owned permit any of their respective Subsidiaries to the Company take or agree to take 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);
(ix) with respect to the Retained Business, 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 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 action that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, to prevent, materially delay impair or materially impair delay the consummation of the Transactions;Merger.
(xc) Nothing contained in this Agreement shall give Parent or the Company, directly or indirectly, the right to control or direct the other than capital expenditures made Party’s operations prior to the Effective Time. Prior to the Effective Time, each Party will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations. Nothing in accordance this Agreement, including any of the actions, rights or restrictions set forth in this Agreement, will be interpreted in such a way as to require compliance by any Party if such compliance would result in the violation of any rule, regulation or policy of any federal, state, provincial, local or foreign court or Governmental Entity with Section 5.01(b)(vjurisdiction over enforcement of any Antitrust Laws (any such Governmental Entity, a “Governmental Antitrust Entity”) and other than purchases and licenses of film and television and production programming (includinor applicable Law.
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from From and after the execution date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, except (unless the following exceptions set forth in clauses (i) through (iv), the “Interim Covenant Exceptions”) (i) as otherwise required or expressly contemplated by this Agreement, (ii) as may be required by a Governmental Entity or required by applicable Law or Order, (iii) as may be consented to in writing by Parent shall otherwise approve in writing, (which approval consent shall not be unreasonably withheld, conditioned or delayed), and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3iv) as otherwise expressly disclosed set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to conduct its business in the Retained Business ordinary course of business and use commercially reasonable efforts to preserve intact its business organization, keep available the services of its and their present officers and key employees, and maintain its existing business relationships and goodwill, including with material customers, suppliers and other business partners; provided, however, that no action or failure to take an action with respect to matters specifically addressed by the provisions of Section 6.1(b) shall constitute a breach of this Section 6.1(a) unless such action or failure to take action would constitute a breach of such provision of Section 6.1(b).
(b) From the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, other than pursuant to any Interim Covenant Exception, the Company shall not, and shall cause its Subsidiaries not to:
(i) adopt any (A) change in the Company’s Organizational Documents (except for ministerial amendments) or (B) material changes to the Organizational Documents of any of the Company’s Subsidiaries that, in the case of this clause (B), would be adverse to Parent;
(ii) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, except for any such plan solely among or between the Company and any of its Wholly Owned Subsidiaries or among or between any of the Company’s Wholly Owned Subsidiaries, in each case, to the extent such actions would not reasonably be expected to result in any material Taxes;
(iii) acquire, directly or indirectly, by merger, consolidation, acquisition of equity interests or assets or otherwise, any Person or its business, other than (A) transactions among the Company and its Wholly Owned Subsidiaries or among the Company’s Wholly Owned Subsidiaries, in each case, to the extent such transactions would not reasonably be expected to result in any material Taxes or (B) acquisitions of inventory or other goods in the ordinary course of business;
(iv) transfer, sell, lease, license, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any material Encumbrance (other than a Permitted Encumbrance) upon, any assets (excluding any equity interests of the Company or any of its Subsidiaries, which are subject to Section 6.1(b)(v), and excluding any Intellectual Property Rights, which are subject to Section 6.1(b)(xviii)), except (A) sales of inventory or other goods or licenses made in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each (B) sales of its Subsidiaries to, solely obsolete assets or (C) as expressly required pursuant to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 terms of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and Material Contracts in furtherance of, the foregoing, the Company covenants and agrees as effect prior to itself and its Subsidiaries that, from and after the date of this Agreement and made available to Parent prior to the First Effective Time date of this Agreement;
(unless Parent shall v) issue, sell, divest, grant, transfer, lease, license, guarantee, Encumber (other than with Permitted Encumbrances of the type described in clause (j) of the definition thereof) or otherwise approve enter into any Contract or other agreement with respect to the voting of, any equity interests of the Company or any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such equity interests, or any options, warrants or other rights of any kind to acquire any such equity interests or such convertible or exchangeable securities, other than any (A) such transaction among or between the Company and any of its Wholly Owned Subsidiaries or among or between the Company’s Wholly Owned Subsidiaries, (B) issuance in writingrespect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms as of the date of this Agreement or (C) issuance in respect of Company Equity Awards granted after the date hereof under the Stock Plans without violation of this Agreement pursuant to the form award agreements previously provided to Parent;
(vi) amend, which approval modify, extend, renew or terminate any material Lease, and shall not be unreasonably withheldenter into any material new lease, conditioned sublease, license or delayedother agreement for the use or occupancy of any real property, and which determination shall take into account other than in the ordinary course of business consistent with past practice;
(vii) purchase any real property or sell any Owned Real Property;
(viii) make any loans, advances, guarantees or capital contributions to or investments in, or otherwise extend any Indebtedness to, any Person (other than to or from the Company Overview Presentationand any of its Wholly Owned Subsidiaries or among any of its Wholly Owned Subsidiaries), and except as other than (1A) required by applicable Law, (2) expressly required guarantees made by the Transaction Documents (including Company or its Subsidiaries in the ordinary course of business consistent with past practice in connection with the Separation acquisition of goods and the Distribution) services or (3B) otherwise expressly disclosed advances of reimbursable business expenses to employees in Section 5.01(bthe ordinary course of business consistent with past practice;
(ix) of the Company Disclosure Letter)declare, the Company shall not and shall not permit set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its Subsidiaries to:
capital stock or other equity interests (i) except including with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)Company Shares), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments except for dividends paid by any Wholly Owned Subsidiary to the governing documents of Company or to any other Wholly Owned Subsidiary of the Company that would not preventCompany;
(x) reclassify, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any 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 Shares), other than any such transactions solely between or among the Company and its Wholly Owned Subsidiaries;
(1xi) pursuant (A) create, incur, assume or guarantee any Indebtedness of the type described in clauses (a), (b), (c), (d), (e), (f) or (g) of the definition thereof in excess of $15,000,000 in principal amount outstanding at any one time, except for incurrences of Indebtedness and guarantees under the Company Credit Agreement (including any requests for increases to the forfeiture ofcommitment amounts thereunder, or withholding provided, that the aggregate amount 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 any such increases after the date of this Agreement and prior to the Closing Date shall not exceed $10,000,000) in accordance with the terms ordinary course of this Agreement) business or (2) purchases, repurchases, redemptions or other acquisitions guarantees of securities of any wholly owned Subsidiary Indebtedness of the Company by Company’s Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 6.1(b), (B) prepay, redeem, repurchase, defease, satisfy, discharge, cancel or otherwise terminate any such Indebtedness of the Company or any of its Subsidiaries, other wholly owned Subsidiary than payments of Indebtedness under the Company Credit Agreement, except in each case of clause (A) and (B) for any such transactions solely between or among the Company and its Wholly Owned Subsidiaries, or (C) create, assume, incur or guarantee any obligations, liabilities or undertakings in respect of interest rate and currency obligation swaps, h▇▇▇▇▇ or similar arrangements or in respect of annuity insurance products created or entered into in the ordinary course of business consistent with past practice;
(xii) make or commit to make any, capital expenditures in excess of $10,000,000 in the aggregate, except (A) as contemplated by the Company’s capital budget made available to Parent on or prior to the date of this Agreement or (B) to the extent reasonably necessary in connection with an emergency, including as it relates to protecting human health and safety;
(xiii) (A) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement, other than Contracts in the ordinary course of business consistent with past practice (including in connection with the expiration or renewal of any such Company Material Contract) provided, that such Contract shall not include any provision referred to in Section 4.11(a)(ix)(A) and Section 4.11(a)(ix)(E) or (B) take any action set forth on Section 6.1(b)(xiii)(B) of the CompanyCompany Disclosure Schedule.
(xiv) other than with respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 6.1(b)(viii), Section 6.1(b)(xi) and Section 6.13, terminate, materially modify, materially amend or waive any material right under any Company Material Contract, other than in the ordinary course of business consistent with past practice (including in connection with the expiration or renewal of any such Company Material Contract);
(iixv) merge or consolidate other than with any other Personrespect to Transaction Litigation, or restructureany Tax claim, reorganize audit, assessment or completely dispute, which shall be governed exclusively by Section 6.16 and Section 6.1(b)(xvii), respectively, (A) settle, waive, release, assign, compromise or partially liquidate enter into any Contract with respect to any Proceeding other than any compromise or settlement that (A) is for an amount net of insurance in excess of $2,500,000 individually or $5,000,000 in the aggregate, (B) does not impose injunctive relief or other non-monetary obligation on the Company or any of its Subsidiaries (other than transactions customary confidentiality and de minimis contractual obligations in the applicable compromise or settlement agreement that are incidental to an award of monetary damages thereunder), (C) does not involve any criminal liability or the type contemplated admission of wrongdoing by the Company, any of its Subsidiaries or any of their respective officers or directors and (D) does not provide for the license of any material Intellectual Property Rights or the termination or modification or amendment of any license of material Intellectual Property Rights, or (B) take any action set forth on Section 5.01(b)(vii6.1(b)(xv)(B) 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions)Disclosure Schedule;
(iiixvi) make any material changes with respect to any financial accounting policies or procedures, except as expressly required by any Company Plan as changes in effect on the date hereof: GAAP, applicable Law or SEC rule or policy;
(A) establishmake (except in the ordinary course of business consistent with past practice), adopt, amend change or terminate revoke any material Company Plan Tax election, (B) change any material Tax accounting method, (C) file any amended Tax Return, (D) enter into any closing agreement (or amend the terms of any outstanding equity-based awards other agreement with any Governmental Entity) with respect to Taxes or any Tax allocation or sharing agreement (other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan commercial agreement entered into in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofrelate primarily to Taxes), (BE) settle or pay any income or other material Tax claim, audit, assessment or dispute, (F) extend or waive the application of any statute of limitations regarding the assessment or collection of any Tax (other than with respect to customary automatically granted extensions of time within which to file Tax Returns) or initiate any voluntary disclosure or similar program, (G) file any income or other material Tax Return in a manner inconsistent with past practices or (H) surrender any right to claim a refund of a material amount of Taxes;
(xviii) (A) sell, assign, transfer or grant or provide any transaction or retention bonuses license to any director, officer, employee or material Owned IPR (other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except than non-exclusive licenses granted in the ordinary course of business consistent with past practice with respect practice), (B) cancel, abandon or otherwise allow to lapse or expire any material Registered Owned IPR, other than expirations or abandonment of any such Registered Owned IPR at the end of the applicable statutory term, (C) disclose any Trade Secret or other material confidential information included in Owned IPR (other than, in each case of the foregoing in this clause (C), (1) employees below pursuant to non-disclosure agreements or other Contracts in effect as of the level date of Executive Vice President and this Agreement, (2) employees at to the Company’s or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationits Subsidiaries’ Representatives, bonus consultants or pension, welfare contractors who are bound by confidentiality obligations or other benefits prior to such change, (3) as required by applicable Law) or (D) disclose, distribute, escrow, or make available, or grant any rights with respect to, any source code or other technology included in the Company Software;
(xix) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement, (A) increase in any manner the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination payments pay of any current or benefits payable to any directorformer employee, officer, employee director or other individual service provider of the Company or any of its Subsidiaries, (EB) become a party to, establish, adopt, amend, modify, commence participation in or terminate any Company Benefit Plan or any plan, policy, program, contract, agreement or 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 or otherwise, (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 of, compensation or benefits under any Company Benefit Plan (including any equity-based awards)or otherwise, (FE) 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 determined, except as may be required by GAAP or (GF) forgive terminate the employment or service of any loans to directorsemployee, officers officer, director or other individual service provider or Third Party Worker of the Company or its Subsidiaries with an annual salary or wage rate or consulting fees in excess of $200,000 other than for cause;
(xx) (A) become a party to, establish, adopt, amend, commence participation in or terminate any Labor Agreement or recognize or certify any labor union, labor organization, works council or similar organization as the bargaining unit of any employees of the Company or any of its Subsidiaries, (B) implement or announce any employee layoffs, furloughs, plant closings or other similar actions that would trigger notice obligations under the WARN Act, (C) waive or release any noncompetition, nonsolicitation, nondisclosure or other restrictive covenant obligation of any current or former employee or independent contractor of the Company or any of its Subsidiaries;
(ivxxi) incur enter into any Indebtedness transactions or issue Contracts with any warrants affiliate or other rights Person that would be required to acquire be disclosed by the Company under Item 404 of Regulation S-K of the SEC; or
(xxii) agree, authorize or commit to do any Indebtednessof the foregoing.
(c) Nothing set forth in this Agreement shall give Parent, except (A) in directly or indirectly, the ordinary course of business consistent with past practice in a principal amount not right to exceed $400,000,000 in control or direct the aggregate at any time outstanding on prevailing market terms Company’s or on terms substantially consistent with or more beneficial its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company and its SubsidiariesSubsidiaries shall exercise, taken as a wholeconsistent with the terms and conditions of this Agreement, than existing Indebtedness, complete control and with a maturity date no more than 10 years supervision over their respective operations.
(d) From and after the date execution and delivery of this Agreement, until the earlier of the Contract evidencing such Indebtedness, (B) except with respect to Effective Time and 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 termination 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 pursuant to Article VIII, Parent 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 timenot, and shall cause its Subsidiaries and controlled Affiliates not to, directly or indirectly (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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, consolidationconsolidation or otherwise), purchase of property acquire, purchase, lease or assets, licenses license 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 its Retained Subsidiaries shall enter into any such a transaction that wouldwith (or agree to acquire, purchase, lease, or license or otherwise enter into a transaction with) any Person if doing so would reasonably be expected to, prevent, to prevent or materially delay the obtaining of any authorization, consent, Order or materially impair approval of any Governmental Entity or the consummation expiration or termination of any applicable waiting period necessary to consummate the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 1 contract
Sources: Merger Agreement (Masimo Corp)
Interim Operations. (a) The Company Each of Laguna and Orca covenants and agrees as to itself and its Subsidiaries that, from and after the execution date hereof and until the earlier of the Laguna Effective Time or the termination of this Agreement and prior in accordance with its terms, unless Laguna (in the case of any action or omission proposed with respect to Orca or any Subsidiary of Orca) or Orca (in the First Effective Time (unless Parent case of any action or omission with respect to Laguna or any Subsidiary of Laguna) shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, delayed or conditioned or delayed, by the party from whom it is requested) and except as (1) required by applicable Law, (2) expressly required by Self-Regulatory Organization, the Transaction Documents (including in connection with the Separation and the Distribution Orca Scheme or as expressly contemplated by this Agreement or, in the Final Step Plan) or (3) case of Orca, as otherwise expressly disclosed set forth in Section 5.01(a) 5.1 of the Company Orca Disclosure Letter or, in the case of Laguna, as otherwise set forth in Section 5.1 of the Laguna Disclosure Letter), the Company shall, and shall cause :
(a) each of it and its Subsidiaries to, shall use its commercially reasonable best efforts (i) to conduct the Retained Business its business in the ordinary and usual course of business consistent with past practice, practice and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts (ii) to preserve the Retained Business’ intact its business organization intact and consistent with prior practice maintain the Retained Business’ its existing relations and goodwill with all Governmental EntitiesEntities (including applicable Regulatory Authorities) and Self-Regulatory Organizations, clients, customers, suppliers, distributors, licensors, creditors, lessors, employees employees, stockholders and business associates and others having material business dealings other Persons with the Retained Business (including material content providerswhich it or Laguna or Orca, studiosas applicable, 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thathas material business relations, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:applicable;
(i) except with respect to SpinCo and the SpinCo neither it nor its Subsidiaries shall amend, modify, waive, rescind or otherwise change any provisions of its Organizational Documents; (other than in the case of clause (A))ii) neither Laguna nor Orca, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not preventas applicable, delay or impair the Initial Merger or the other Transactions), (B) shall split, combine, subdivide combine or reclassify its outstanding shares of capital stock or other equity interests; (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Ciii) neither it nor its Subsidiaries shall declare, set aside or pay any type of dividend or distribution other distribution, whether payable in cash, stock stock, property or property (or any a combination thereof) , in respect of any capital stock or other equity interests, as appropriate, other than dividends payable by direct or indirect wholly owned Subsidiaries of Laguna or Orca, as applicable, to Laguna or Orca, respectively, or another of its direct or indirect wholly owned Subsidiaries in the ordinary and usual course of business (including in connection with acquisitions entered into after the date of this Agreement as permitted by Section 5.1(h)) or to service existing indebtedness for borrowed money; (iv) neither it nor its Subsidiaries shall adopt a plan of merger, consolidation or complete or partial liquidation or resolutions providing for a merger, consolidation or complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; and (v) except (x) for the acquisition by such party of shares of its capital stock (except for (1) any dividends or distributions paid other equity interests in connection with the surrender of such shares by a direct holders of Laguna Stock Awards or indirect wholly owned Subsidiary Orca Stock Awards, as applicable, in order to pay the exercise price of such Stock Awards in accordance with the Company to another direct or indirect wholly owned Subsidiary terms of such Stock Awards as in effect on the Company or date of this Agreement and Disclosed to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)other party, (Dy) enter into any agreement for the withholding or disposition of shares of capital stock or other equity interests to satisfy withholding Tax obligations with respect to Laguna Stock Awards or Orca Stock Awards, as applicable, granted pursuant to the voting Laguna Stock Plans and the Orca Stock Plans, as applicable, in accordance with the terms of such Stock Awards as in effect on the date of this Agreement and Disclosed to the other party, neither it nor its capital stock, or (E) purchase, Subsidiaries it shall repurchase, redeem or otherwise acquire any shares of its any capital stock or other equity interests of Laguna or Orca or their respective Subsidiaries, as applicable, or any securities convertible into or exchangeable or exercisable for any such shares of capital stock or other equity interests, as applicable;
(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, profits interests, commitments or rights of any kind to acquire, capital stock or other equity interests, or any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with its stockholders on any shares matter or any other property or assets, except for (x) Laguna Shares or Orca Shares (as applicable) issuable or transferable pursuant to Laguna Stock Awards or Orca Stock Awards outstanding on or awarded prior to the date hereof or made by Laguna or Orca, as applicable, (y) in amounts not to exceed the maximum amounts set forth respectively, in the case of Orca, on Section 5.1 of the Orca Disclosure Letter or, in the case of Laguna, on Section 5.1 of the Laguna Disclosure Letter, or (z) issuances to Subsidiaries of Laguna or Orca, as applicable, in connection with internal reorganizations entered into in the ordinary and usual course of business solely among the Subsidiaries of Laguna or Orca, as applicable, which will not adversely affect the Intended Tax Treatment; (ii) incur any indebtedness for borrowed money (including any guarantee of indebtedness) or issue any debt securities except for borrowing in amounts not to exceed $25,000,000 in the aggregate (including pursuant to any drawdowns of credit facilities outstanding as of the date hereof); or (iii) make or authorize or commit to any material capital expenditures, other than in the ordinary and usual course of business and consistent with past practice; provided that, to the extent permitted by Law, it shall inform the other party of material capital expenditures not contemplated by such party’s capital budget;
(d) neither it nor any of its capital stock Subsidiaries shall (other than (1i) pursuant to the forfeiture ofterminate, establish, adopt, enter into, or withholding materially amend any Benefit Plan, as the case may be, or any other arrangement that would be a Laguna Benefit Plan or an Orca Benefit Plan if in effect on the date of Taxes this Agreement; (ii) materially increase the salary, wage, bonus, fringe benefits or other compensation of any director, manager, officer or employee or enter into any contract, agreement, commitment or arrangement to do any of the foregoing; provided, however, that any compensation or benefits that vest, accelerate or result in any payment or funding in connection with respect toany of the transactions contemplated by this Agreement shall not be considered a breach of the foregoing clauses (i) and (ii); (iii) enter into any contract, Company Restricted Stock Unitsagreement, Company Deferred Stock Units commitment or Company Performance Stock Unitsarrangement providing for the payment to any director, manager, officer or employee of such party or the funding of compensation or benefits in each case in accordance with past practice and with connection with, contingent upon, or the terms of which are materially altered in connection with, any of the Company Stock Plans transactions contemplated by this Agreement either alone or, except as provided below, in conjunction with any other event; or (iv) provide, with respect to any stock option, restricted stock, restricted stock unit or other equity-related award, that the vesting of any such stock option, restricted stock, restricted stock unit or other equity-related award or any Benefit Plan shall accelerate or otherwise be affected by or result in any payment or funding in connection with any of the transactions contemplated by this Agreement, except (x) with respect to the foregoing clauses (i)—(iv), as required by applicable Law or the terms of any Benefit Plan existing and in effect on the date of this Agreement (or as modified after and Disclosed to the date of this Agreement in accordance with the terms of this Agreement) other party or (2y) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of with respect to the Company by the Company or any other wholly owned Subsidiary of the Company);
foregoing clause (ii) merge or consolidate with any other Person), or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary usual course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, practice;
(Be) 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business or as may be required by applicable Law or the terms of any Benefit Plan existing and in effect on the date of this Agreement and that is set forth, in the case of Orca, in Section 5.1 of the Orca Disclosure Letter or, in the case of Laguna, that is set forth in Section 5.1 of the Laguna Disclosure Letter, neither it nor any of its Subsidiaries shall establish, adopt, enter into, materially amend or terminate any collective bargaining or similar agreement with a labor union or similar organization;
(f) neither it nor any of its Subsidiaries shall lease, license, transfer, exchange or swap, mortgage (including securitizations) pledge, abandon, allow to lapse, or otherwise dispose of (whether by way of merger, consolidation, sale of stock or assets, or otherwise) any portion of its assets, including the capital stock or other equity interests of its Subsidiaries except for (i) dispositions of assets that, individually or in the aggregate with all other such dispositions, have fair market value of less than $25,000,000; (ii) transactions between it and any of its direct or indirect Subsidiaries or transactions between such Subsidiaries; or (iii) activities in the ordinary and usual course of business consistent with past practice with respect to practice;
(1g) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or neither it nor any of its SubsidiariesSubsidiaries shall, (E) take any action to accelerate except in the vesting ordinary and usual course of business and consistent with past practices, sell, lease, license, transfer, exchange or payment of compensation or benefits under any Company Plan swap, mortgage (including securitizations) pledge, abandon, allow to lapse or otherwise dispose of any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to Material Intellectual Property of such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company party or any of its Subsidiaries;
(ivh) incur neither it nor any Indebtedness of its Subsidiaries shall acquire or issue any warrants or other rights agree to acquire (whether by merger, consolidation, purchase or otherwise) any IndebtednessPerson, division or assets (including real property), except for acquisitions: (Ai) entered into on an arm’s length basis; (ii) the expected gross expenditures and commitments (including the amount of any indebtedness assumed) of which do not exceed, in the aggregate, $25,000,000; and (iii) which are not reasonably likely, individually or in the aggregate, to prevent or materially delay the satisfaction of the conditions set forth in Section 6.1(e);
(i) neither it nor any of its Subsidiaries shall settle or compromise (other than any claims or litigation brought by Laguna against Orca or brought by Orca against Laguna arising out of or relating to this Agreement) any material claims or litigation, if such settlement or compromise would involve, individually or together with all such other settlements or compromises, the payment of money by such party or its Subsidiaries in excess of $25,000,000 over the available insurance coverage or applicable reserves, if any, at the time of such settlement or would involve any admission of material wrongdoing or any material conduct requirement or restriction by such party or its affiliates, except, in each case, 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 usual course of business consistent with past practice, ;
(Ej) 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or neither it nor any of its Subsidiaries shall modify, renew, amend or (excluding expirations in accordance with their terms) terminate in any material respect to such Indebtedness (and Parent and any of its SubsidiariesMaterial Contracts or waive, including, following the Distribution, the Retained Subsidiaries, shall not have release or assign any obligations material rights or claims thereunder in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings excess of $20,000,000 individually or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that in the aggregate principal amount of Indebtedness at or enter into or amend any time outstanding under this clause (G) shall not exceed Contract that, if existing on the amount permitted in Section 5.01 of the Company Disclosure Letter; provideddate hereof, furtherwould be a Material Contract, 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 thereofexcept, 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 and usual course of business consistent with past practice or as permitted pursuant Section 5.1(c)(ii) or 5.1(c)(iii), or 5.1(d);
(k) neither it nor any of its Subsidiaries shall make or change any material Tax election, adopt or change any material method of Tax accounting, file any material amended Tax Return, enter into a closing agreement or advance pricing agreement in connection with respect of a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior material amount of Taxes, settle or compromise any material audit, assessment, notice, Tax claim or proceeding relating to entering into hedging activities in connection with Indebtedness Taxes, surrender any material right to claim a refund or offset of any Taxes, consent to (or request) any extensions or waiver of the type described limitation period applicable to any material Tax claim or assessment, or change the classification of Laguna or Orca, as applicable, or any of their Subsidiaries for U.S. Tax purposes, except, in clauses (G) each case, to the extent otherwise required by Law 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;
(vl) neither it nor any of its Subsidiaries shall permit any material change in its financial accounting principles, policies or practices, except to the extent that any such changes in financial accounting principles, policies or practices shall be required by changes in GAAP or SEC rules and regulations or Regulation S-X of the Exchange Act and, in each case, authoritative interpretations thereof;
(m) neither it nor any of its Subsidiaries shall enter into any Contract that grants “most favored nation” status to any counterparty, except in the ordinary and usual course of business consistent with past practice, or any “non-compete” or similar Contract that, in any case, would materially restrict the business of the Topco Group following the Laguna Effective Time with respect to the Retained Businessengaging or competing in any line of business or in any geographic area;
(n) neither it nor any of its Subsidiaries shall make any material loans, advances or capital contributions to, or investments in, any other Person (other than any wholly owned Subsidiary), other than with respect than: (i) any routine travel, relocation (of non-executive employees) and business advances in the ordinary course of business to acquisitions employees of businessesit or its Subsidiaries and (ii) trade credit to customers, which is subject to Section 5.01(b)(ix)in either case, and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) made in the ordinary course of business consistent with past practice practice;
(o) neither it nor any of its Subsidiaries shall enter into any material new line of business outside of its existing business segments;
(p) neither it nor any of its Subsidiaries shall convene any regular or special meeting (or any adjournment or postponement thereof) of the stockholders of it or its Subsidiaries other than (i) the stockholder meetings to adopt this Agreement and approve the Combinations and (ii) regular annual meetings to address matters arising in the aggregate not ordinary course consistent with past practice other than this Agreement and the Combinations;
(q) neither it nor any of its Subsidiaries shall implement or announce any material plant closing, material reduction in excess labor force or other material group layoff of 120% employees or service providers other than routine employee terminations for cause or following performance reviews in the ordinary course of business and consistent with past practice;
(r) subject to Section 5.2, neither it nor any of its Subsidiaries shall take any action that would reasonably be expected to prevent or materially impair or delay the consummation of the amounts reflected Combinations or any of the other transactions contemplated by this Agreement (including the satisfaction of the conditions set forth in ARTICLE VI); and
(s) neither it nor any of its Subsidiaries shall authorize or enter into an agreement, arrangement or understanding to do any of the Company’s capital expenditure budget for each of 2017, 2018 and 2019 foregoing set forth in Section 5.01(b)(v5.1(a) through (r) if Laguna or Orca, as applicable, would be prohibited by the terms of Section 5.1(a) through (r) from doing the foregoing. Nothing contained in this Agreement shall give (x) Laguna, directly or indirectly, the right to control or direct the operations of Orca or Topco, or (y) Orca or Topco, directly or indirectly, the right to control or direct the operations of Laguna, prior to the filing of the Company Disclosure Letter;
Orca Scheme Order with the Registrar and the consummation of the Laguna Merger, respectively. Prior thereto, each of Laguna and its Subsidiaries, on the one hand, and Orca and its Subsidiaries (vi) including Topco), on the other hand, shall exercise, consistent with respect the terms and conditions of this Agreement, complete unilateral control and supervision over their business operations. Notwithstanding anything to the Retained Businesscontrary in this Agreement, transferany actions or omissions (a) that are reasonably prudent or reasonably necessary to mitigate the effects of the COVID-19 pandemic and the Effects resulting therefrom, leaseor (b) required or prudent to comply with applicable Law, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon guidelines or otherwise dispose best practices of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses Governmental Entity or ordinary course security interests Orders in connection with or in response to the production or financing of film COVID-19 pandemic and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensesthe Effects resulting therefrom shall, in each case, 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 be considered to have been taken in the “ordinary course or $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinbus
Appears in 1 contract
Sources: Business Combination Agreement (Ortho Clinical Diagnostics Holdings PLC)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First earlier to occur of (i) the date on which the designees of Parent and/or Merger Sub on the board of directors of the Company constitute a majority of the members of the Company’s board of directors and (ii) the Effective Time (the earlier of such dates, the “Control Date”) (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including business of it and its Subsidiaries shall be conducted in connection the ordinary and usual course consistent with past practice and to the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries 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 efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorslandlords, licensors, creditors, lessorslicensees, employees and business associates and others having material business dealings with associates. Notwithstanding 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, foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Control Date, except (unless i) as otherwise contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld), conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) is required by applicable Law, (2) expressly required Law or by the Transaction Documents (including in connection with the Separation and the Distribution) any Governmental Entity or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 7.1 of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(ia) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation (including by way of any certificates of designation) or bylaws or other applicable governing instruments;
(b) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company;
(c) (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 $500,000 in any transaction or series of related transactions, other than amendments acquisitions pursuant to Contracts in effect as of the governing documents date of any Subsidiary this Agreement, all of which are identified on Section 6.1(q) of the Company that would not preventDisclosure Schedule;
(d) issue, delay sell, dispose of, grant, transfer or impair subject to any Lien, or authorize the Initial Merger issuance, sale, disposition, grant or the other Transactions)transfer of or Lien on, (B) split, combine, subdivide or reclassify its outstanding any shares of capital stock of the Company or any of its Subsidiaries, including, without limitation shares of Series A Junior Participating Preferred Stock (except in each case, other than the issuance or grant of Shares upon the exercise of Company Options that are outstanding as of the date hereof), or securities convertible or exchangeable into or exercisable for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, capital stock or property (other equity interests, or any combination thereof) in respect options, warrants or other rights of any kind to acquire any shares of its such capital stock or such convertible or exchangeable securities;
(except for e) make any loans, advances or capital contributions to or investments in any Person (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $500,000 in the aggregate;
(f) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to the Company any other direct or (2indirect wholly owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(g) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, acquisition of any such capital stock or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units other securities tendered by current or Company Performance Stock Units, former employees or directors in each case in accordance with past practice and connection with the terms exercise of the currently outstanding Company Stock Plans as in effect on the date Options);
(h) incur any indebtedness for borrowed money or guaranty such indebtedness of this Agreement another Person (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 wholly owned Subsidiary of the Company by the Company or any other than a wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 compensationeach case for indebtedness, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business and consistent with past practice in a principal amount not to exceed $400,000,000 practice, for borrowed money under credit facilities, lines of credit and other debt or borrowing arrangements reflected in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to Financial Statements; provided, however that neither the Company and nor its Subsidiaries, taken as a whole, than Subsidiaries shall draw down on any amounts under its existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) credit facilities 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, necessary to comply with letters of credit, bank guaranteesunder credit facilities, security lines of credit and other debt or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, borrowing arrangements reflected in each case issued, made or entered into the Company’s most recent financial statements included in the Company Reports issued from time to time in the ordinary course of business consistent in an amount not to exceed $1,000,000 in the aggregate outstanding at any given time;
(i) make any material changes with past practicerespect to accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(Ej) commercial paper issued make, alter or revoke any Tax accounting method or material Tax election, or settle or compromise any Tax liability or otherwise pay or consent to any assessment as the result of an audit, file any amended Tax Return, enter into any closing agreement relating to Taxes, or waive or extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice in a principal amount not business);
(k) transfer, sell, lease, exclusively license, surrender, divest, cancel, abandon or otherwise dispose of, or subject to exceed $250,000,000 in the aggregate at any time outstandingLien, (F) Indebtednessany assets, the proceeds of which will be used to finance all product lines 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations businesses of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, includingother than inventory, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof supplies 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 other assets in the ordinary course of business consistent with past practice;
(vl) except as expressly contemplated by this Agreement, required pursuant to the Benefit Plans in effect on the date of this Agreement disclosed in Section 6.1(h)(i) of the Company Disclosure Schedule, pursuant to any employment or separation agreement disclosed in Section 6.1(h)(vi) of the Company Disclosure Schedule or any collective bargaining agreement disclosed in Section 6.1(m) of the Company Disclosure Schedule, or as otherwise required by applicable Law, including to comply with Section 409A of the Code, (i) grant or provide any severance or termination payments or benefits to any officers, employee, independent contractor or consultant of the Company or any of its Subsidiaries, (ii) 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 respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) non-executive employees in the ordinary course of business consistent with past practice and practice, (iii) enter into any new, or amend the terms of any existing, employment agreement or Benefit Plan with any member of management of the Company or any of its Subsidiaries, (iv) grant any equity or equity-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, to the price or value of any Shares or other equity securities of the Company or any of its 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 terms of any outstanding Company Option, or (viii) terminate or materially amend any existing, or adopt any new, Benefit Plan (other than changes that may be necessary to comply with applicable Law, in each case that do not materially increase the costs of any such Benefit Plans); provided, 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 delayed); provided, further, that the Company shall take such actions as shall be necessary to cause any employee hired by the Company or any of its Subsidiaries after the date hereof to not be an “Eligible Employee” within the meaning of the Company’s Special Severance Plan authorized by the Company’s board of directors on May 7, 2007;
(m) 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 6.1(s);
(o) make any capital expenditures in excess of $100,000 individually or $300,000 in the aggregate not in excess of 120% of the amounts reflected over and above those capital expenditures identified in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 plan set forth in Section 5.01(b)(v7.1(o) of the Company Disclosure LetterSchedule;
(vip) with respect enter into any rights agreement, establish any stockholder rights plan (or similar plan commonly referred to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place as a Lien upon “poison pill”) or otherwise dispose of enter into any material Intellectual Property; provided that this clause Contract (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (case other than transactions among the Stock Plans existing on the date hereof and Company Options issued thereunder) under which the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties may become obligated to sell or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, otherwise issue, deliverregister, sellredeem, grantrepurchase, transfer, or encumber, or authorize the issuance, delivery, sale, grantvote, transfer or encumbrance of, dispose of any shares of its capital stock or any securities convertible other securities; or
(q) except as provided in Section 7.2 and Section 7.3, agree, authorize or exchangeable into commit to do any of the foregoing. Nothing contained in this Agreement (including, without limitation, this Section 7.1) is intended to give Parent, directly or exercisable forindirectly, the right to control or direct the Company’s or any optionsof its Subsidiaries’ operations prior to the Control Date, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of nothing contained in this Agreement in accordance with is intended to give the existing terms Company, directly or indirectly, the right to control or direct Parent’s or any of such awards its Subsidiaries’ operations. Prior to the Control Date, each of Parent, Merger Sub and the Company Stock Plansshall exercise, (B) Investment Preferred Stock (as defined 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 Bridge Facility) continued operation of the Company and the Subsidiaries, the Company will reasonably confer in good faith on a regular basis with one or (C) more representatives of Parent, designated by wholly owned Subsidiaries Parent to the Company or to any other wholly owned Subsidiary in writing, regarding operational matters, and the general status of ongoing operations of the Company; provided that, for the avoidance Company and will notify Parent promptly 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);
(ix) with respect to the Retained Business, 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 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 occurrence that has had or may reasonably be expected to have a Company Material Adverse Effect or that, individually or $200,000,000 in the aggregate in any yearaggregate, in each case to acquire any business, whether by merger, consolidation, purchase of property has materially delayed 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 its Retained Subsidiaries shall enter into any such transaction that wouldimpaired, or would reasonably be expected to, prevent, to materially delay or materially impair the impair, consummation of the Transactions;
(x) other than capital expenditures made transactions contemplated by this Agreement, or that, individually or in accordance 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 5.01(b)(v) 8.1 or 8.2; 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 acknowledges that Parent does not and other than purchases and licenses will not waive any rights it may have under this Agreement as a result of film and television and production programming (includinsuch notice or consultations.
Appears in 1 contract
Sources: Merger Agreement (Topps Co Inc)
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries thatrequired by applicable Law, from and after the execution of (ii) as otherwise expressly contemplated by this Agreement and prior or (iii) as set forth in Schedule 6.01(b), (iv) as required by any Governing Documents of such entities or (v) as consented to the First Effective Time in writing by HESM (unless Parent shall otherwise approve in writing, which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letterconditioned), during the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, period from and after the date of this Agreement and prior to until the First earlier of the Effective Time (unless Parent or the termination hereof, each HIP Entity shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend conduct its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, (EB) commercial paper issued use commercially reasonable efforts to maintain and preserve intact its business organization and the goodwill of those having business relationships with it, (C) use commercially reasonable efforts to keep in full force and effect all material Permits and all material insurance policies maintained by the HIP Entities, other than changes to such policies made in the ordinary course of business consistent business, and (D) use commercially reasonable efforts to comply in all material respects with past practice in a principal amount not to exceed $250,000,000 in all applicable Laws and the aggregate at any time outstanding, requirements of all Material Contracts.
(Fb) Indebtedness, Without limiting the proceeds of which will be used to finance all or any portion generality of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that foregoing, during the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 period from the date of this Agreement in until 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 earlier of the type described in clauses Effective Time or the termination hereof, except (GA) as required by applicable Law, (B) as otherwise expressly contemplated by this Agreement or the other Transaction Documents or (HC) aboveas set forth in Schedule 6.01(b), none of the HIP Entities shall, without the prior written consent of HESM (Kwhich consent will not be unreasonably withheld, delayed or conditioned):
(i) Indebtedness and replacements and refinancings thereof incurred adopt or propose any change to any of their Organizational Documents as in connection with effect on the funding date 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 practicethis Agreement;
(vii) with respect to issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the Retained Businessissuance, other than with respect to acquisitions of businessessale, which is subject to Section 5.01(b)(ix)pledge, and other than with respect to film and television production and programming (including sports rights) with third parties or video game productiondisposition, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 respect to the Retained Businessgrant, transfer, lease, license, guarantee or encumbrance of, any equity securities of the HIP Entities, 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 equity securities or such convertible or exchangeable securities or interests;
(iii) declare, set aside or pay any distributions in respect of any of their equity securities or split, combine or reclassify any of their equity securities, other than cash distributions to their respective equity holders in accordance with their respective Organizational Documents;
(iv) settle, propose to settle or compromise any action before a Governmental Authority if such settlement, proposed settlement or compromise (A) with respect to the payment of monetary damages, involves the payment of monetary damages that exceed $1,000,000 in the aggregate (together with all other settlements or compromises after the date of this Agreement), net of any amounts covered by insurance that the HIP Entities expect to be promptly paid by the applicable insurer, (B) that imposes any material equitable or non-monetary relief, penalty or restriction on any HIP Entity or (C) that would reasonably be expected to affect the rights or defenses available to any HIP Entity in any related or similar claims that, individually or in the aggregate, are material to the HIP Entities, taken as a whole;
(v) recommend, propose, announce, adopt or vote to adopt a plan of complete or partial dissolution or liquidation, in each case, that would (A) prevent or materially impede or delay the ability of the Parties to satisfy any of the conditions to, or the consummation of, the transactions set forth in this Agreement or (B) adversely affect in a material way the rights of holders of the securities of any Party;
(vi) transfer, sell, assignlease, let lapse, abandon, cancellicense, mortgage, pledge, place a Lien upon surrender, encumber, divest, cancel or abandon or otherwise dispose of any of the HIP Entities’ material Intellectual Property; provided that this clause (vi) shall not restrict assets, product lines or businesses, including any equity interests of any of the HIP Entities, except (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production goods or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 services provided in the ordinary course of business and sales of obsolete assets, or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (DB) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not 1,000,000 in the ordinary course aggregate;
(vii) except (w) as set forth in Schedule 6.01(b)(vii), (x) transactions solely between or $100,000,000 individually among the HIP Entities and/or the HESM Entities that will not result in any event obligation or liability to any party other than the HIP Entities and/or the HESM Entities, (y) borrowings permitted under the HIP Credit Agreement or (z) in connection with the Financing Transactions, (A) incur, assume or guarantee any indebtedness for borrowed money, (B) transactions among issue, assume or guarantee any debt securities, (C) grant any option, warrant or right to purchase any debt securities, or (D) issue any securities convertible into or exchangeable for any debt securities of others, other than any such actions contemplated in (A) through (D), as would not, taken together, result in the Company and incurrence or guarantee of indebtedness or issuance of debt securities with a value in excess of $1,000,000 in the Retained Subsidiariesaggregate;
(viii) make any change to any of their accounting policies or procedures, except as required by changes after the date hereof in accordance with GAAP;
(ix) (A) change any material method of Tax accounting, (B) make, change or revoke any material Tax election, (C) settle or compromise any material liability for Taxes, (D) file any materially amended Tax Return, (E) enter into any written agreement with any Governmental Authority with respect to SpinCo and Taxes, (F) surrender any right to claim a refund for Taxes, (G) consent to an extension of the SpinCo Subsidiaries, issue, deliver, sell, grant, transferstatute of limitations applicable to any Tax claim or assessment, or encumber(H) take any action or fail to take any action that would reasonably be expected to cause any HIP Entity (other than HIP Holdings and ▇▇▇▇ Infrastructure Partners Finance Corporation) to be treated, for U.S. federal income Tax purposes, as a corporation; or
(x) agree, authorize or authorize commit to do any of the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except foregoing.
(Ac) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on From the date of this Agreement until the Closing Date, each of HESM Entities and HIP Parties shall promptly notify the other Parties in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 spend in excess writing of (Ai) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event event, condition 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 circumstance that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would could reasonably be expected to, prevent, materially delay or materially impair the consummation to result in any of the Transactions;
conditions set forth in Article V not being satisfied at the Effective Time, and (xii) other than capital expenditures made any material breach by the notifying Party of any covenant, obligation or agreement contained in accordance with this Agreement; provided, however, that the delivery of any notice pursuant to this Section 5.01(b)(v6.01(c) and other than purchases and licenses of film and television and production programming (includinshall not limit or otherwise affect the remedies available hereunder to the notified Party.
Appears in 1 contract
Sources: Partnership Restructuring Agreement (Hess Midstream Partners LP)
Interim Operations. (a) The Company covenants Sellers and agrees as to itself and its Subsidiaries RMST agree that, from the date hereof until the earlier of the Closing and after the execution of date this Agreement and prior is validly terminated (the “Interim Period”), except (i) as set forth in Section 5.1(a) of the Seller Disclosure Letter, (ii) as may be required by the Bankruptcy Court, (iii) as may be required by applicable Law (including with respect to the First Effective Time Bankruptcy Cases) or Governmental Entity, (unless Parent shall otherwise approve iv) as may be permitted by this Agreement (including pursuant to the Bidding Procedures Order) or (v) as may be approved by Purchaser in writing, which approval shall not be unreasonably withheld, conditioned or delayed, the Sellers and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company RMST shall, and shall cause each of its Subsidiaries their Affiliates to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practicepractice (including with respect to ordering and purchasing Inventory, maintaining the Artifacts and Exhibitry and making capital, sales and marketing expenditures). Without limiting the Company foregoing, during the Interim Period, Sellers and RMST shall, and shall cause each of its Subsidiaries their Affiliates to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to (i) conduct the Business in compliance with all applicable Laws, (ii) preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill their current relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others any Persons having material business dealings with the Retained Business (including material content providersemployees, studiossuppliers, authorsvendors, producerscustomers, 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 ofclients, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)contractors), (Aiii) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments maintain the assets, properties, business records and facilities relating to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger Transferred Assets or the other Transactions)Business in their current working order, (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in perform on a current basis all obligations under 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 Assumed Contracts 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 Assumed Real Property Leases and (2v) overdraft facilities or cash management programs, in each case issued, made or entered into pay all Liabilities of DinoKing in the ordinary course of business consistent with past practice.
(b) In furtherance of the foregoing, during the Interim Period, except (i) as set forth in Section 5.1(b) of the Seller Disclosure Letter, (Eii) commercial paper issued as may be required by the Bankruptcy Court, (iii) as may be required by applicable Law (including with respect to the Bankruptcy Cases) or Governmental Entity, (iv) as may be permitted by this Agreement (including pursuant to the Bidding Procedures Order) or (v) as may be approved by Purchaser in writing, the Sellers and RMST will not, and will cause their Affiliates not to:
(i) amend or otherwise change their certificate of incorporation or bylaws or other applicable organizational documents;
(ii) issue, sell or dispose of any equity securities of any Seller or RMST or redeem or repurchase any equity securities or equity-based award of any Seller or RMST, or securities convertible into, or exchangeable or exercisable for, any such equity securities or awards, or any rights of any kind to acquire any such equity securities or such convertible or exchangeable securities, other than by a wholly-owned Subsidiary of any such Seller to such Seller or another wholly-owned Subsidiary of such Seller;
(iii) with respect to the Business sell, lease, transfer or otherwise dispose of (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any Transferred Assets or RMST Assets, in each case other than dispositions of Inventory and other assets in the ordinary course of business consistent with past practice or pursuant to existing Contracts in a principal an amount not to exceed exceeding $250,000,000 50,000 in the aggregate at any time outstanding, aggregate;
(Fiv) 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness the Business acquire (and Parent and its Subsidiarieswhether by merger, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings consolidation or replacements thereof and acquisition of commitments thereunder, and any refinancings stock or replacements of any such refinancing assets 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), (Iotherwise) any amendmentcorporation, refinancing partnership or renewal of the existing revolving and term loan facilities of the YES Facility and other business organization or division thereof or any refinancing thereofassets, 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 case other than purchases of the Company as of the date of this Agreement Inventory and other assets in the ordinary course of business consistent with past practice or pursuant to existing Contracts in connection with a Sky Acquisition an amount not exceeding $50,000 in the aggregate;
(v) incur, assume, refinance or guarantee any Indebtedness for borrowed money or issue any debt securities, or assume or guarantee any Indebtedness for borrowed money of any Person, except for borrowings 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 guarantees in the ordinary course of business under the DIP Agreement and consistent with past practicethe terms of the Cash Budget;
(vvi) cancel, compromise, waive or release any right with respect to any Transferred Asset;
(vii) make any loans, advances or capital contributions to, or investments in, any other Person (other than to any wholly-owned Subsidiary of any such Seller);
(viii) make or authorize any capital expenditures in excess of $50,000 in the aggregate for all projects of the Sellers and RMST;
(ix) enter into or amend, modify, supplement, restate or renew in any respect or cancel or terminate or waive any rights under or with respect to any Material Contract, Real Property Lease or Permit;
(x) increase any payments required to be paid under or pursuant to any Assumed Contract or Material Contract, Assumed Real Property Lease or Permit (whether or not in connection with obtaining any Consents) by Purchaser after the Closing, or increase, or take any action not required by the terms thereof that would result in any increase in, any operating expenses of any Assumed Real Property Lease;
(xi) fail to maintain in full force and effect the existing insurance policies maintained by the Sellers or RMST with respect to the Retained BusinessBusiness or the Transferred Assets (“Insurance Policies”) or to replace such Insurance Policies with comparable insurance policies covering the Sellers or RMST with respect to the Business and Transferred Assets, and the Sellers and RMST and their respective properties, assets and businesses;
(xii) other than as required pursuant to the terms of any Benefit Plan in effect on the date hereof or as required by applicable Law: (A) increase the salaries, wages or benefits of Seller Employees, (B) enter into any severance, change-in-control, retention, employment or other agreement with any director or independent contractor of the Sellers or RMST or any Seller Employee, (C) establish, adopt, terminate 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; (D) take any action to fund the payment of compensation or benefits under any Benefit Plan; (E) exercise any discretion to accelerate the vesting or payment or any compensation or benefit under any Benefit Plan or (F) extend an offer of employment to any natural Person who, if so employed as of the date hereof, would be a Seller Employee, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and for employees who are not officers;
(xiii) settle or compromise any litigation, claim or proceeding for an amount that exceeds $50,000 in the aggregate not in excess of 120% of or that imposes any injunction, equitable relief, limitation or Lien against the amounts reflected in the Company’s capital expenditure budget for each of 2017Transferred Assets or RMST Assets or commence any litigation, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letterclaim or proceeding;
(vixiv) with respect declare, set aside, make or pay any dividend or other distribution of any assets to the Retained Businessany Affiliate or other Person holding direct or indirect equity interests in any Seller or RMST;
(xv) grant, transfer, leaseassign, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Seller and RMST Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course , other than Excluded Assets or pursuant to non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of such 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 granted in the ordinary course or $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreementsbusiness;
(viixvi) enter into any agreement with any labor union or labor organization, including but not limited to any collective bargaining agreement;
(xvii) make, change or revoke any election related to Taxes, settle or compromise any claim related to Taxes, enter into any agreement related to Taxes, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment, or change any taxable period or any Tax accounting method;
(xviii) make any change in the reserving or accounting policies, practices or principles in effect on the date hereof, other than any change required by applicable Law or GAAP;
(xix) permit or allow any Transferred Asset or RMST Asset to become subject to a Lien;
(xx) change in any respect the cash management practices, policies or procedures of Sellers or RMST with respect to collection of accounts receivable, establishment of reserves for uncollectible accounts receivable, accrual of accounts receivable, payment of accounts payable, purchases, prepayment of expenses or deferral of revenue, from Sellers’ or RMST’s practices, policies and procedures with respect thereto as of the date hereof, including taking (or omitting to take) any action that would have the effect of delaying or postponing the payment of any accounts payable to post-Closing periods that would otherwise be expected to be paid in pre-Closing periods;
(xxi) make any intercompany transfers of funds or Liabilities including any transfers between any of the Sellers and RMST;
(xxii) introduce any material change with respect to the Retained operation of the 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 including any Intellectual Propertymaterial change in the types, which is governed by Section 5.01(b)(vi))nature, except for composition or quality of products or services sold in the Business;
(Axxiii) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not deviate from past practice in the ordinary course of business with respect to ordering or $100,000,000 individually in any event or (B) transactions among the Company maintenance of Inventory and the Retained SubsidiariesArtifacts & Exhibitry;
(viiixxiv) except with respect file any motion to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, pay any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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 pre-Petition Date claims 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)Person;
(ixxxv) with respect to prepay any expenses unless expressly set forth in the Retained BusinessCash Budget; or
(xxvi) agree, 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 authorize or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 foregoing.
(c) Nothing contained in this Agreement is intended to give Purchaser, directly or indirectly, the right to control or direct the Business or the operations of the agreement for such acquisition); provided that neither Sellers or RMST prior to the Company nor any Closing, and nothing contained in this Agreement is intended to give the Sellers, directly or indirectly, the right to control or direct Purchaser’s or its Subsidiaries’ operations. Prior to the Closing, each of Purchaser and the Sellers and RMST shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinits Subsidiaries’ respective operations.
Appears in 1 contract
Sources: Asset Purchase Agreement (Premier Exhibitions, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned)), and except as (1) otherwise expressly contemplated by this Agreement or required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Laws or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, the Company shall, and its Subsidiaries shall cause each the business of it and its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business be conducted in the ordinary course of business consistent with past practice, practice and the Company shall, it and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, shall use commercially their respective reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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) associates. Without limiting the generality ofof the foregoing, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly contemplated or specifically permitted by this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, delayed or conditioned (other than with respect to subsections (i), (ii), (iii), (iv), (vi), (vii), (viii), (x), (xiii), (xiv), (xvi), (xviii), (xix), (xx), (xxi), (xxii) (collectively, the “specified operating covenants”) or delayed(xxiii) (but solely in the case of subsection (xxiii), and with respect to the specified operating covenants), in which determination shall take into account cases (involving the Company Overview Presentationspecified operating covenants) Parent may withhold its consent in its sole discretion)), and except (C) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or any Governmental Entity or (3D) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws or other applicable governing instruments of the Company or any of its Subsidiaries;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person;
(iii) other than capital expenditures, which shall be subject to subparagraph (ix) of this Section 6.1(a), make any acquisition of all or substantially all of the capital stock or assets of any other Person, whether by way of stock purchase, asset purchase, merger or otherwise (any such transaction, an “Acquisition”), with a value or purchase price in the aggregate in excess of $10 million in any transaction or series of related transactions (and the Company shall provide reasonable advance notice to Parent of the consummation of any Acquisition with a value or purchase price in excess of $10 million), or make more than three Acquisitions in the aggregate, other than Acquisitions pursuant to Contracts in effect as of the date of this Agreement, copies of which have been provided to Parent or made available on the Company Data Site prior to the date hereof; (“Company Data Site,” as used in this Agreement, means the on-line data room established by the Company with Intralinks, Inc., by which the Company provided access to documents and materials to Parent and Merger Sub in connection with the transactions contemplated by this Agreement);
(iv) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments to (A) the governing documents issuance of any Shares upon the settlement of RSUs under the Stock Plan (and dividend equivalents thereon, if applicable) in accordance with the terms of the Stock Plan or (B) the issuance of shares by a wholly-owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly-owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding 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 v) make any such transaction by a wholly loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned subsidiary Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transactionCompany), ;
(Cvi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another the Company or to any other direct or indirect wholly wholly-owned Subsidiary of the Company Company) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(vii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant the acquisition of any Shares tendered by current or former employees or directors in order to the forfeiture of, or withholding of pay 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 connection with the terms settlement of RSUs and other awards under 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the CompanyPlan);
(iiviii) merge or consolidate with enter into any other PersonContracts relating to interest rate protection, or restructureincur, reorganize issue, modify, renew, syndicate or completely or partially liquidate refinance any Indebtedness (other than transactions (i) any letters of credit issued in the type contemplated by Section 5.01(b)(viiordinary course of business, (ii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations the refinancing of a Subsidiary any existing Indebtedness of the Company in which such Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice (provided that does not materially increase the cost of any such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofrefinancing Indebtedness so incurred must be voluntarily prepayable without premium, (B) grant or provide any transaction or retention bonuses to any director, officer, employee penalties or other service provider costs in excess of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except $500,000 in the ordinary course of business consistent with past practice with respect to (1aggregate) employees below the level of Executive Vice President and (2iii) 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 swap agreements 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 collar agreements entered into in the ordinary course of business consistent with past practice, );
(Eix) commercial paper issued except for reasonable expenditures related to operational emergencies that are not in excess of $1 million individually or $2.5 million in the ordinary course aggregate, make or authorize any capital expenditures in excess of business consistent with past practice in a principal amount not to exceed $250,000,000 6 million 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 $9,000,000,000aggregate; provided, furtherthat in the case of any expenditures related to operational emergencies, that Parent will respond to any request for consent hereunder within 24 hours of receiving such request;
(x) make any material changes with respect to financial or Tax accounting policies or procedures, except as required by applicable Law or by changes in GAAP;
(xi) settle any litigation or other proceedings before a Governmental Entity (other than with respect to any Tax audits, litigation or proceedings) for an amount in excess of $3 million individually or $10 million in the Separation Agreement shall provide that SpinCo shall assume aggregate;
(xii) except to the obligations extent required by Law, make any material Tax election;
(xiii) enter into any settlement, compromise or closing agreement with respect to any material Tax liability or Tax refund or file any amended Tax Return with respect to any material Tax;
(xiv) transfer, sell, lease, license, mortgage, 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 its Subsidiaries, including capital stock of any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 other than sales of inventory 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 parts in the ordinary course of business consistent with past practice or pursuant to Contracts in connection with a Sky Acquisition and not for speculative purposes; provided that force on the date of this Agreement, transactions solely among the Company shall consult with and/or its wholly-owned Subsidiaries that would not result in any increase (other than a de minimis increase) in the Tax liability of the Company and its Subsidiaries or pursuant to Contracts in effect prior to the date of this Agreement, copies of which have been provided or made available to Parent prior to entering into hedging activities the date hereof;
(xv) except as required pursuant to a Benefit Plan in connection with Indebtedness effect prior to the date of this Agreement or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to Service Providers of the type described in clauses (G) or (H) aboveCompany Group except for new hires, (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;
, (vB) increase the compensation to any Service Provider in excess, in the aggregate, of 3.75% of the current aggregate compensation of Service Providers as of the date hereof (provided that any such increase is in the ordinary course of business consistent with past practice), (C) other than, with respect to medical or dental Benefit Plans, as would not reasonably be expected, individually or in the Retained Businessaggregate, other than with respect to acquisitions result in material expense or liability to the Company or any of businessesits Subsidiaries, which is subject to Section 5.01(b)(ix)establish, and other than with respect to film and television production and programming (including sports rights) with third parties adopt, terminate or video game productionmaterially amend any Benefit Plan or any plan, which is subject to Section 5.01(b)(x)program, make arrangement, policy or commit to any capital expenditures other than (A) agreement that would be a Benefit Plan if it were in connection with existence on the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) date hereof or (BD) grant any equity or equity-based awards; provided, that the Company may issue (i) RSUs in respect of not more than 200,000 Shares in the ordinary course of business consistent with past practice and in (ii) additional RSUs on a contingent basis such that the aggregate not in excess issuance of 120% such additional RSUs is subject to the termination of this Agreement; it being understood and agreed that 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) Company or a Subsidiary of the Company Disclosure Lettermay make offers of employment to newly hired non-executive employees in the ordinary course of business consistent with past practice that are not inconsistent with the terms of this subsection (xv);
(vixvi) with respect to adopt a plan or agreement of complete or partial liquidation or dissolution of the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Company or any of its Subsidiaries;
(xvii) grant any Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests other than Permitted Liens and except in connection with Indebtedness permitted under Section 6.1(a)(viii);
(xviii) in the production case of Subsidiaries of the Company which are organized in jurisdictions other than a state of the United States, make any investment in debt or financing equity securities issued by the Company or any of film and television programming its Subsidiaries organized under the laws of a state of the United States;
(xix) permit any of its Subsidiaries or video game productionany of its or their respective directors, letting lapseofficers, abandonmentmanagers, and cancellationsemployees, and Liens that are ordinary course independent contractors, representatives or agents to promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, any non-exclusive licensesU.S. official, in each case, in violation 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation AgreementsFCPA;
(viixx) adopt or implement any stockholder rights plan or amend the Rights Plan, in each case, in any manner adverse to Parent or Merger Sub;
(xxi) unless such action is permitted by Section 6.2, waive, release, fail to enforce, or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement to which the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon Company or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiariesparty;
(viiixxii) except with respect enter into, amend, waive or terminate any transaction that would be required 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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued be disclosed pursuant to Company Restricted Stock Units, Company Performance Stock Units Section 5.1(r) if entered into at any time after the Applicable Date and Company Deferred Stock Units outstanding prior to or 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Companyhereof; 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
(ixxxiii) with respect to the Retained Businessagree, 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 authorize or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 foregoing.
(b) Parent shall not knowingly take or permit any of its Retained Subsidiaries shall enter into Affiliates to take any such transaction action that would, or would reasonably be expected toto adversely affect, prevent, materially prevent or delay or materially impair in any material respect the consummation of the Transactions;Merger.
(xc) other than capital expenditures made If the Company obtains actual knowledge of any activities of the Company or any of its Subsidiaries, including those activities of their respective directors, officers, managers, employees, independent contractors, representatives or agents, that the Company reasonably believes to be in accordance with Section 5.01(b)(v) violation of the FCPA, the Company shall, and other than purchases shall cause each of its Subsidiaries to use their reasonable best efforts to, cease such activities. The Company shall, and licenses shall cause its Subsidiaries to use their reasonable best efforts to, take all actions required by law to remediate any actions taken by the Company or its Subsidiaries, or any of film and television and production programming (includintheir respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of the FCPA.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including as set forth in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(aPart 4.1(a) of the Company Disclosure Letter)Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, use its reasonable best efforts to conduct its business in the Retained Business ordinary course and use reasonable best efforts to maintain and preserve 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 relations. 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 (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, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the Company shall not (and shall not permit any Company Subsidiary to):
(i) amend the Organizational Documents of the Company;
(ii) split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of the Company’s capital stock or other equity interests of the Company or any Company Subsidiary;
(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 the Company’s capital stock or the capital stock or other equity interest of any Company Subsidiary, other than dividends or distributions only to the extent paid by any wholly owned Company Subsidiary 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 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, and the Company shallsell, and shall cause each 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 Subsidiaries tocapital stock or other equity interests, solely to other than (A) shares of Company Common Stock issuable upon exercise of Company Options or the extent related to the Retained Businessvesting or settlement of Company RSUs, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 in each case outstanding as of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior in accordance with the terms of the applicable award; (B) pursuant to the First Effective Time (unless Parent shall otherwise approve Company ESPP in writing, which approval shall not be unreasonably withheld, conditioned or delayed, the ordinary course of business and which determination shall take into account in accordance with the Company Overview Presentation, terms thereof and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents of this Agreement (including Section 4.8 hereof); (C) in connection with the Separation exercise of Company Warrants; and (D) the Distributionissuance of the Additional Shares pursuant to Section 2.17 of the INSU Merger Agreement;
(vi) sell, assign, transfer, lease or license to any third party, or encumber, or otherwise dispose of (3by merger, consolidation, operation of law, division or otherwise), any Company IP or material assets of the Company, other than (A) otherwise expressly disclosed sales of inventory, goods or services in Section 5.01(bthe 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 LetterSchedule; (C) as security for any borrowings permitted by Section 4.1(a)(viii), the Company shall not and shall not permit any of its Subsidiaries to:
; or (iD) except with respect licenses granted to SpinCo and the SpinCo Subsidiaries (customers or other than third parties in the case ordinary course of clause (A))business, (A) amend its certificate including any licenses granted in the operation of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary enterprise business solutions line of the Company that would not prevent, delay (the “EBS Business”);
(vii) directly or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, indirectly repurchase, redeem or otherwise acquire any shares of its 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 into or exercisable for any shares of its the Company’s or any Company Subsidiary’s capital stock or equity interests, except (other than (1A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the forfeiture ofexercise 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 withholding settlement of Taxes with respect toCompany Options and Company RSUs, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitsas applicable, in each case in accordance with past practice and with the terms of the applicable award and (C) in connection with the exercise of Company Stock 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 rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances or capital contributions to any other Person, 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 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 Agreement, would constitute a Material Contract (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 except for renewals of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan existing Material Contract in the ordinary course of business consistent and Contracts entered into or renewed in connection with past practice 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)(x)(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 changes in GAAP or SAP or as required by applicable Legal Requirements;
(xii) 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 Company Return prepared in a manner materially increase the cost of such Company Plan inconsistent with past practice, settle or benefits provided under such Company Plan based on the cost on the date hereofcompromise any material liability for Taxes or any Tax audit, (B) grant or provide any transaction or retention bonuses to any directorclaim, officer, employee or other service provider proceeding relating to a material amount of Taxes, 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 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 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) sell, transfer, assign, license, or otherwise dispose of (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 its Subsidiariesthe Company, (C) increase including, for the compensationavoidance of doubt, bonus or pensionany sale, welfare transfer, assignment, license, or other benefits disposition of, or mortgage, encumbrance or exchange of any director, officer such material Intellectual Property to or employee 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 Company IP License or any of its Subsidiariesrights, except 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 consistent and for licenses granted in the connection with past practice with respect to the EBS Business;
(1xiv) employees below (i) make any capital expenditure that is not contemplated by the level of Executive Vice President and (2capital expenditure budget set forth in Part 4.1(a)(xiv)(i) 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined Disclosure Schedule or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(ivii) incur any Indebtedness cash expenditures or issue any warrants obligations or other rights to acquire any Indebtednessliabilities except cash expenditures, except obligations or liabilities incurred (A) in the ordinary course of business consistent or (B) in connection with past practice 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 principal amount 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 exceed any individual litigation, claim, suit, action or matter, or $400,000,000 250,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to be paid by 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 do not impose any restriction on the Bridge Facility, in replacement of, Company’s business or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the business of 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 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) (A) amend any material Company Permits in a manner that adversely impacts the Company’s ability to conduct its wholly owned Subsidiariesbusiness in any material respect or (B) 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 its reasonable business judgment or in the ordinary course of business, or (DB) 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;
(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;
(xxiv) (i) alter or amend in 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 or commitment with any insurance regulatory authority, in the case of each of clauses (i) and (ii) other than in the ordinary course of business; or
(xxv) authorize, approve or enter into any agreement or make any commitment to take any of the actions described in clauses “(i)” through “(xxiv)” of this sentence.
(b) 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 not drawn upon and payments are not triggered therebythe Company shall otherwise give its prior consent in writing, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities as set forth in Part 4.1(b) the Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements or cash management programs(4) as expressly permitted or required by this Agreement, in each case issuedParent shall, made or entered into and shall cause the Parent Subsidiaries to, conduct its business in the ordinary course of in all material respects and use reasonable best efforts to maintain and preserve intact its business consistent with past practiceorganization. Without limiting the foregoing, (E) commercial paper issued in during 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 period from the date of this Agreement in through the ordinary course earlier of business consistent with past practice the Closing or in connection with a Sky Acquisition and not for speculative purposes; provided that the termination of this Agreement, except (1) to the extent the Company shall consult with Parent otherwise give its prior to entering into hedging activities consent in connection with Indebtedness of the type described in clauses (G) or (H) abovewriting, (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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 1 contract
Sources: Merger Agreement (Lemonade, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement July 20, 2020 and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing in advance (which approval shall not be unreasonably withheld, conditioned delayed or delayedconditioned)), and except as (1) otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation its business and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each business of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practiceOrdinary Course and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related consistent therewith, it and its Subsidiaries shall (i) preserve their business organizations in good standing pursuant to the Retained Business, subject to compliance with the specific matters set forth below, applicable Law and (ii) use their respective commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ respective present officers, employees and agents, except as otherwise expressly required by this Agreement or as required by a Governmental Entity or applicable Law, provided that no action by the Company with respect to matters permitted by any provision of clauses (i)-(xxii) of Section 7.1(b) below shall be deemed a breach of the obligations under this sentence unless such action would constitute a breach of such other provision.
(b) Without limiting the generality of, and in furtherance of, the foregoing, from July 20, 2020 until the Company covenants and agrees Effective Time, except as to itself and its Subsidiaries thatotherwise expressly (A) contemplated by this Agreement, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve B) required by a Governmental Entity or applicable Law, (C) approved in writing, writing in advance (which approval shall not be unreasonably withheld, conditioned delayed or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1conditioned) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Parent or (3D) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company Disclosure Letter), the Company has not and shall not and has not and shall not permit any of its Subsidiaries to:
(i) except adopt or propose any change in (x) the Company’s Organizational Documents or (y) any Subsidiary’s Organizational Documents;
(ii) merge or consolidate itself or any of its Subsidiaries with respect to SpinCo and the SpinCo Subsidiaries (any other than in the case of clause (A))Person, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a transactions among its wholly owned subsidiary Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) (A) acquire (1) (by merger, consolidation or acquisition of stock or assets) any other Person or (2) to the Company which remains a wholly owned Subsidiary after consummation extent in excess of such transaction$5,000,000 in the aggregate, any material equity in any other Person therein or (B) enter into any joint venture, legal partnership or similar arrangement (other than commercial agreements with partners in the Ordinary Course that do not involve the formation of an entity with any third Person or require equity investing);
(iv) except as otherwise permitted under clause (xvii) below and except for issuances under the ESPP authorized under Section 3.5(c), (C) declareissue, set aside sell, pledge, dispose of, grant, transfer, encumber, or pay authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into or amend any dividend Contract or distribution payable in cashunderstanding with respect to the voting of, stock or property (or any combination thereof) in respect of any shares of its capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or Company Equity Awards or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities (other than the issuance of shares (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries, (B) in respect of Company Warrants and Company Equity Awards, in each case outstanding as of July 20, 2020 and issued in accordance with their terms in effect as of July 20, 2020 and, as applicable, the Stock Plan or (C) under the ESPP);
(v) create or incur any Encumbrance (other than a Permitted Encumbrance or as otherwise permitted by Section 7.1(b)(x));
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its wholly owned Subsidiaries) in excess of $250,000 in the aggregate;
(vii) make any loans or advances to, guarantees for the benefit of, or enter into any other material transaction with any Company Employee or Affiliates other than advances for business, travel-related, relocation or other similar expenses in accordance with currently existing Company policy;
(viii) 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 or other equity or voting interest (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(ix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, or (E) purchaseoffer to redeem, repurchase, redeem repurchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock, other than the withholding of shares of Company Common Stock to satisfy the exercise price or withholding Tax obligations upon the exercise, vesting or settlement of outstanding Company Equity Awards in accordance with their terms and, as applicable, the Stock Plan;
(x) unless otherwise permitted by Section 7.1(b)(xvii), incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) trade payables incurred in the Ordinary Course and intercompany loans or advances between or among the Company and/or its direct or indirect wholly-owned Subsidiaries, (B) other Indebtedness not to exceed $750,000 in the aggregate or (C) guarantees of Indebtedness of wholly owned Subsidiaries otherwise incurred in compliance with this Section 7.1;
(xi) except as set forth in the Company’s capital budget, make or authorize any capital expenditures in excess of $1,000,000 in the aggregate during any fiscal quarter (it being understood that any portion of the capital expenditures budget for any fiscal quarter and such $1,000,000 in excess thereof not expended in such fiscal quarter, beginning with the first quarter of the fiscal year ended March 31, 2021, may be carried forward and, together with any amount otherwise permissible pursuant to this paragraph (xi), expended in any future fiscal quarter; provided that any excess amount not expended in the final quarter of a fiscal year will not be carried forward into the next fiscal year);
(xii) other than in the Ordinary Course, enter into any Contract that would have been a Material Contract 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 Material Contract, other than (1A) pursuant to expirations of any such Contract in the 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 Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Personsuch Contract, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses non-exclusive licenses, covenants not to any director▇▇▇, officerreleases, employee waivers or other service provider of rights under Intellectual Property Rights owned by the Company or any of its Subsidiaries, in each case, granted in the Ordinary Course;
(xiii) settle, release, waive or compromise any Proceedings except solely for monetary payments of no more than $750,000 individually or $1,500,000 in the aggregate, net of applicable insurance payments, recoveries or proceeds, or on a basis that would (A) prevent or materially delay consummation of the Merger or the Transactions, or (B) result in the imposition of any term or condition that would materially restrict the future activity or conduct of the Company or its Subsidiaries or a finding or admission of a criminal violation of Law;
(xiv) make any changes (other than di minimis changes) with respect to accounting policies or procedures, except as required by GAAP or applicable Law;
(xv) (A) make, change or revoke any income or other material Tax election, (B) adopt or change any Tax accounting method, (C) increase the compensationfile any amended Tax Return, bonus (D) enter into any closing agreement with respect to any Taxes, (E) settle any material Tax claim, audit, assessment or pensiondispute, welfare (F) surrender any right to claim a refund of a material amount of Taxes, (G) consent to any extension or other benefits waiver of any directorlimitation period with respect to any material Tax claim or assessment, officer (H) enter into any Tax sharing or employee similar agreement or arrangement, (I) fail to pay any material Tax that becomes due and payable or (J) incur any Taxes outside of the Company Ordinary Course;
(xvi) transfer, sell, lease, license, divest, cancel, mortgage, pledge, surrender, encumber, abandon or allow to lapse or expire or otherwise dispose of any assets (tangible or intangible), rights, properties, product lines or businesses, in whole or in part, material to it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except for (A) sales of obsolete assets in the ordinary course Ordinary Course, (B) sales, leases or other dispositions of business consistent assets (not including services) with past practice with respect a Fair Value not in excess of $5,000,000 in the aggregate other than pursuant to (1) employees below the level of Executive Vice President Material Contracts in effect prior to July 20, 2020 and (2C) employees at or above non-exclusive licenses entered into in 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, Ordinary Course and (D) increase Encumbrances securing Indebtedness permitted under this Section 7.1(b) and (E) Permitted Encumbrances;
(xvii) except as required pursuant to the terms of any Company Benefit Plan in effect as of July 20, 2020 or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any Company Employee or other service provider, (B) increase the compensation or benefits payable to any director, officer, employee Company Employee or other service provider of provider, except for annual merit-based increases in base salary or base wages in the Ordinary Course for Company Employees or any of its Subsidiariesother service providers who are not directors or Executive Officers and whose annual base compensation is less than $250,000 (with no such increase to exceed three (3) percent (3%)), (EC) establish, adopt, enter into, amend or terminate any material Company Benefit Plan or other material benefit or compensation plan, program, policy, agreement or arrangement that would be a Company Benefit Plan if in effect on July 20, 2020, (D) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan other than vesting acceleration of all Company Options and Company RSUs in the Merger as contemplated by Section 3.5(b), (including E) grant any equity-based new awards, or amend or modify the terms of any outstanding awards (including, without limitation, any Company Equity Awards), (F) 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 or determined, except as may be required by GAAP, (G) forgive any loans, issue any loans or advance any loans to directorsany current or former Company Employees, officers (H) hire or engage any employee or engage any independent contractor (who is a natural person) with an annual base salary or wage rate or consulting fees in excess of $275,000 or (I) terminate the employment or engagement of any Company Employee or other service provider whose annual base compensation exceeds $275,000 other than for cause;
(xviii) recognize any union, works council or other labor organization as the representative of any of the employees of the Company or any of its 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 wholeor enter into, 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 ofmodify, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the terminate any 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 thereofLabor Agreement, in each case, so long except as required by applicable Law;
(xix) implement or announce any employee layoffs or location closings, that would implicate the aggregate principal amount thereof does not exceed $2,500,000,000WARN Act;
(xx) enter into any Contract which contains a change in control or similar provision that would be triggered in connection with this Agreement or the Merger;
(xxi) other than in the Ordinary Course, amend or modify in any material respect, or extent, renew or terminate any lease, sublease, license or other agreement for the use or occupancy of any real property, or enter into any new lease, sublease, license or other agreement for the use or occupancy of any real property;
(Jxxii) hedging maintain insurance at less than current levels or otherwise in compliance a manner inconsistent with the hedging strategy past practice in any material respects;
(xxiii) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company as or other Person covered by Item 404 of Regulation S-K promulgated by 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 purposesSEC that would be required to be disclosed pursuant to Item 404; 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;or
(vxxiv) with respect to the Retained Businessagree, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, from and after the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement in accordance with Article IX (the “Interim Period”) (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), 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 its commercially reasonable best efforts to conduct its business in accordance with applicable Law, to the Retained Business in the ordinary course of business extent consistent with past practicethe foregoing, shall use and the Company shall, and shall cause each of its Subsidiaries 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 efforts to preserve the Retained Businessmaintain its and its Subsidiaries’ organization intact business and maintain the Retained Business’ existing assets and relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees employees, agents and business associates and others having material business dealings with the Retained Business (including material content providersassociates; provided that, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees 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 agents.
(bif 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, of and in furtherance ofof the foregoing sentence, during the foregoingInterim Period, the Company covenants and agrees except as otherwise expressly contemplated or required by this Agreement, required by applicable Law, as approved in writing by Parent (such approval not to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentationexcept that Parent may withhold, and except as (1) required condition or delay approval of actions contemplated by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the DistributionSection 7.1(a)(iii) or (3Section 7.1(a)(iv) otherwise expressly disclosed in Parent’s sole discretion), or set forth in the corresponding subsection of Section 5.01(b7.1(a) of the Company Disclosure Letter), the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) adopt or publicly propose any change in its Organizational Documents (other than to correct scrivener’s errors or immaterial or ministerial amendments);
(ii) merge or consolidate the Company or any of its Subsidiaries 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, directly or indirectly by merger, consolidation, acquisition of stock or assets or otherwise, any business, Person or assets from any other Person with a fair market value or purchase price in excess of $7,500,000 in any individual transaction or series of related transactions or $30,000,000 in the aggregate, 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;
(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 SpinCo Intellectual Property Rights and outsourcing, in connection with services provided in the SpinCo Subsidiaries 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, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract or other agreement, understanding or arrangement (whether oral or written) with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock, or any options, warrants or other rights of any kind to acquire any such shares of capital stock or such convertible or exchangeable securities (other than in the case of clause (A)), (A) amend its certificate proxies or voting agreements solicited by or on behalf of incorporation the Company in order to obtain the Requisite Company Vote or bylaws in connection with any annual meeting of the Company’s stockholders or (or comparable governing documentsB) the issuance of shares of such capital stock (other than amendments to the governing documents of any 1) by a Wholly Owned Subsidiary of the Company that would not preventto the Company or another Wholly Owned Subsidiary of the Company, delay (2) in respect of Company Equity Awards outstanding as of the date of 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 impair (3) pursuant to the Initial Merger ESPP in accordance with its terms and subject to Section 4.2(c));
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or 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 aggregate;
(vii) declare, set aside, make or pay any dividend or other Transactionsdistribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares), except for (Bi) 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 distribution is in accordance with the requirements of the joint venture, operating or similar Contract of any of the JVs;
(viii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any 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 may effect or cause to be effected the actions referred to in this clause (viii) 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) above);
(ix) 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 (including the issuance of any debt securities or any warrants or other rights to acquire any debt security) or enter into any hedging agreements, except for (subject, in each case, to Section 7.1(a)(xii)) (A)
(1) pursuant 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 forfeiture 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 withholding accrual or commitment for, capital expenditures, except (1) capital expenditures in 2022 in an amount not in excess 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 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 Stock Plans as and its Subsidiaries shall be permitted to make emergency capital expenditures in effect on 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 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 modified after soon as reasonably practicable following such discussion (including, for the date avoidance of this Agreement 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 this Agreement) or (2) purchasessuch Contract with no further action by the Company, repurchases, redemptions any of its Subsidiaries or other acquisitions 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 securities of Business;
(xiii) cancel, modify or waive any wholly owned Subsidiary of the Company debts or claims held by or owed to the Company or any other wholly owned Subsidiary of its Subsidiaries having in each case a value in excess of $2,000,000 individually or $10,000,000 in the Company)aggregate outside the Ordinary Course of Business;
(iixiv) merge other than in the Ordinary Course of Business, reduce the amount of insurance coverage or consolidate fail to use commercially reasonable efforts to renew or replace any existing Insurance Policies;
(xv) other than with respect to Transaction Litigation, any other PersonProceeding 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 restructure, reorganize or completely or partially liquidate which would reasonably be expected to (other than transactions of the type contemplated by Section 5.01(b)(viiA) 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required consummation of the transactions contemplated by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofthis Agreement, (B) grant have a materially negative impact or provide impose any transaction material restriction on the operations of the Company and its Subsidiaries or retention bonuses to (C) involve any directorcriminal liability, officer, employee any admission of material wrongdoing or other service provider of any material wrongful conduct by the Company or any of its Subsidiaries;
(xvi) make any changes with respect to accounting policies, procedures, methods, principals or practices, except as required by changes in GAAP or applicable Law;
(xvii) 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 Tax Return; enter into any closing agreement with respect to material Taxes; settle or compromise any material Tax claim, audit, assessment or dispute; 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;
(xviii) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement, as may be required to comply with applicable Law or as set forth on Section 5.13(a) of the Company Disclosure Letter, (A) increase in any manner 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 the date of this Agreement, (C) increase grant any new awards, or amend or modify the compensation, bonus or pension, welfare or other benefits terms of any directoroutstanding awards, officer or employee of the under any Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 changeBenefit Plan, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) 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 benefits under any Company Plan (including any equity-based awards)Benefit Plan, (FE) 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 or determined, except as may be required by GAAP, (GF) forgive any loans or issue any loans to directorsany Company Employee (other than routine travel advances issued in the Ordinary Course of Business), officers (G) hire any employee or employees 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 (H) terminate 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, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization;
(xx) enter into any new line of business;
(xxi) amend, terminate or allow to lapse any material Licenses held by the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 1 contract
Sources: Merger Agreement (LHC Group, Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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) associates. Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents this Agreement, (including B) as Parent may approve in connection with the Separation and the Distributionwriting (such approval not to be unreasonably withheld or delayed) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws by-laws or other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(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 $100,000 in any transaction or series of related transactions, other than acquisitions pursuant to Material Contracts in effect as of the date of this Agreement or pursuant to Section 6.1(a)(x) below;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments to the governing documents issuance of any shares by a wholly-owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly-owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding 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 exercise of Company Options or warrants to purchase Shares that are outstanding on the date of this Agreement;
(except for v) create or incur any such transaction by a wholly owned subsidiary Lien material to the Company or any of its Subsidiaries on any assets of the Company which remains or any of its Subsidiaries having a wholly value in excess of $500,000;
(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 after consummation of such transaction), the Company) in excess of $500,000 in the aggregate;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company any other direct or (2indirect wholly-owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock;
(other than (1ix) pursuant to the forfeiture ofincur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units issue 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 (sell any debt securities or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions warrants or other acquisitions rights to acquire any debt security of securities of any wholly owned Subsidiary of the Company by the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed $500,000 in the aggregate;
(x) except as set forth in the capital budgets set forth in Section 6.1(i)(x) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $500,000 in the aggregate during any 12 month period;
(xi) other wholly owned Subsidiary than 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;
(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 business of the Company), enter into any new license agreement with respect to the Intellectual Property or IT Assets of the Company;
(iixiii) merge amend any existing license agreement with respect to the Intellectual Property or consolidate with any other Person, or 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 IT Assets of the Company in which such Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice and in a manner that does is not materially increase adverse to the cost Company;
(xiv) make any changes with respect to accounting policies or any material change in accounting procedures, except as required by changes 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 Tax election, change an annual accounting period, file any amended Tax Return, enter into any closing agreement, waive or extend any statute of limitation with respect to Taxes, settle or compromise any Tax liability, claim or assessment (other than the payment in the ordinary course of business of Taxes that are due and payable), or surrender any right to claim a refund of Taxes;
(xviii) transfer, sell, lease, license, mortgage, 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, businesses or interests therein of the Company Plan or benefits provided under such its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with the sale of Company Plan based on products and services in the cost on ordinary course of business and sales of obsolete assets and except for sales, leases, licenses 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 hereofof this Agreement;
(xix) 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, (Bi) grant or provide any transaction severance or retention bonuses termination payments or benefits to any director, officer, officer or employee or other service provider of the Company or any of its Subsidiaries, (Cii) increase the compensation, bonus or pension, welfare welfare, severance or other benefits of 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 for increases in base salary in the ordinary course of business consistent with past practice with respect to (1) for employees below the 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 changewho are not officers, (Diii) increase establish, adopt, amend or terminate any Benefit Plan or amend the severance or termination payments or benefits payable to terms of any director, officer, employee or other service provider of the Company or any of its Subsidiariesoutstanding equity-based awards, (Eiv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Benefit Plan, (Fv) 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 determined, except as may be required by GAAP; or (Gvi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(ivxx) incur knowingly take any Indebtedness action or issue omit to take any warrants or other rights action that is reasonably likely to acquire result in any Indebtedness, except (A) in of 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 conditions to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after Merger set forth in Article VIII not being satisfied or is reasonably likely to prevent the date consummation of the Contract evidencing such IndebtednessMerger; or
(xxi) agree, authorize or commit to do any of the foregoing.
(Bb) except with respect Prior to making any written or material oral communications to the Bridge Facilitydirectors, in replacement of, officers 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations 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 respect 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 such Indebtedness (review and comment on the communication; and Parent and its 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 cooperate 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) providing 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;mutually agreeable communication.
(vc) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) Parent shall not restrict (A) ordinary course non-exclusive licenses knowingly take or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 permit any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or take any action that is reasonably likely to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair prevent the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinMerger.
Appears in 1 contract
Interim Operations. (a1) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First earlier of the Merger 1 Effective Time and the termination of this Agreement in accordance with its terms, (w) unless Parent shall otherwise approve consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned delayed or delayedconditioned), and which determination shall take into account the Company Overview Presentation, and (x) except as otherwise expressly permitted by this Agreement, (1y) except as required by applicable LawLaws, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed except as set forth in Section 5.01(b5.1(a) of the Company Disclosure Letter, the business of it and its Subsidiaries shall be conducted in the Ordinary Course of Business, and, to the extent consistent therewith, it shall, and it shall cause its Subsidiaries to, use its and their respective commercially reasonable efforts to preserve their business organizations, preserve their assets and properties in good repair and condition and preserve their relationships with those persons having significant business dealings with them to the end that their good will and ongoing businesses shall be unimpaired at the Closing. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the earlier of the Merger 1 Effective Time and the termination of this Agreement in accordance with its terms, except (X) as otherwise expressly permitted by this Agreement, (Y) as Parent may consent in writing (such consent not to be unreasonably withheld, delayed or conditioned), or (Z) as set forth in Section 5.1(a) of the Company shall Disclosure Letter, it will not and shall will not permit any of its Subsidiaries to:
(ia) adopt or propose any change in the Company’s articles of incorporation or bylaws or the organizational documents of any of the Company’s Subsidiaries;
(b) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly-owned Subsidiaries and except in connection with respect to SpinCo and any transaction in accordance with Section 5.1(a)(xiii), or restructure, reorganize or completely or partially liquidate;
(c) other than (A) in connection with the SpinCo exercise or settlement of Company Equity Awards, (B) as permitted by Section 5.1(a)(xi), or (C) as disclosed in Section 5.1(a)(xi) of the Company Disclosure Letter, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any of its Subsidiaries (other than the issuance of 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, other than (i) grants of Company Equity Awards to new hires in the case Ordinary Course of clause Business or (A))ii) grants of Company Equity Awards up to $100,000, in the aggregate, to non-executive officer employees;
(Ad) amend its certificate of incorporation make any loans, advances or bylaws (capital contributions to or comparable governing documents) investments in any Person (other than amendments to the governing documents between itself and any of any Subsidiary of the Company that would not prevent, delay its direct or impair the Initial Merger or the other Transactionsindirect Subsidiaries), other than advances to employees in the Ordinary Course of Business;
(B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Ce) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another it or to any other direct or indirect wholly wholly-owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(f) other than in connection with tax withholdings related to a Company Equity Award, reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its the Company’s capital stock or any securities convertible or exchangeable into or exercisable for any shares of the Company’s capital stock;
(g) incur any indebtedness or guarantee any indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any of its debt securities or of any of its Subsidiaries, except for (A) guarantees incurred in compliance with this Section 5.1(a) by it of indebtedness of its wholly-owned Subsidiaries, or (B) interest rate swaps on customary commercial terms consistent with past practice;
(h) except as may be required as a result of a change in applicable Law or GAAP or as required by the Company’s auditors or accountants, make any changes with respect to accounting policies or procedures;
(i) except as may be required as a result of a change in applicable Law, make, change or revoke any material Tax election, material method of Tax accounting or any annual Tax accounting period;
(j) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse (except with respect to patents expiring in accordance with their terms) or expire or otherwise dispose of any of its material assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries, except (A) in connection with services and products provided in the Ordinary Course of Business and sales of obsolete assets, (B) Liens securing indebtedness in accordance with Section 5.1(a)(vii), (C) pursuant to Contracts in effect prior to the date of this Agreement, and (D) assets with a fair market value of less than $500,000 in the aggregate;
(k) other than (1A) pursuant to the 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 as set forth on Section 5.1(a)(xi) of the Company Stock Plans Disclosure Letter, (B) as required by any Company Benefit Plan 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 (2C) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: applicable Law, (A1) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan any compensation or benefits benefit provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to be provided to any director, officer, current or former employee or other service provider of the Company or any of its Subsidiaries, other than increases in the Ordinary Course of Businesses and increases in compensation to certain employees, who are non-executive officers, which are reasonably necessary to bring such compensation to market level compensation, (C2) enter into or adopt any new Company Benefit Plan or amend in any material respect or terminate any Company Benefit Plan, (3) accelerate the funding or vesting of any compensation or benefit, or (4) make any material contribution to any Company Benefit Plan other than contributions made in the Ordinary Course of Business;
(l) enter into, materially amend or terminate any Company Material Contract (or any Contract that would be a Company Material Contract if it were in effect as of the date of this Agreement), except that the Company and its Subsidiaries may (x) enter into Contracts of the types described in clauses (B), (F)(II) or (F)(V) of Section 4.1(t)(i)) and (y) amend Company Material Contracts, so long as such Contracts and amendments will not, in the aggregate, increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee liabilities of the Company and its Subsidiaries by greater than $500,000;
(m) acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or substantially all of the assets of any of its Subsidiariesthe foregoing, except other than (A) purchases of inventory and other assets in the ordinary course Ordinary Course of business consistent with past practice with respect Business or pursuant to (1) employees below the level of Executive Vice President existing Contracts, and (2B) employees at assets with a fair market value of no greater than $500,000 in the aggregate;
(n) make any payment or above the level of Executive Vice President in respect of increases of less accrual of, or commit to, capital expenditures for any period that are greater than 7.5105% of compensation relative the capital expenditures reflected in the Company’s capital expenditure budget provided to their compensation, bonus or pension, welfare or other benefits Parent prior to such changethe date hereof;
(o) compromise, settle or agree to settle any Action (D) increase including any Action relating to this Agreement or the severance transactions contemplated hereby), or termination payments consent to the same, other than compromises, settlements or benefits payable to any director, officer, employee or other service provider agreements with no obligation of the Company or any of and its Subsidiaries, (E) take any action to accelerate the vesting or Subsidiaries other than payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except cash (A) in the ordinary course Ordinary Course of business consistent with past practice in a principal amount Business or (B) not to exceed $400,000,000 300,000 in the aggregate at for all such compromises, settlements and agreements under this clause (B); or
(p) agree, authorize or commit to do any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to of the Company and its Subsidiariesforegoing.
(2) Parent agrees that, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of this Agreement and prior to the Contract evidencing such Indebtednessearlier of the Merger 1 Effective Time and the termination of this Agreement in accordance with its terms, (Bw) unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, delayed or conditioned), (x) except with respect as otherwise expressly permitted by this Agreement, (y) except as required by applicable Laws, or (z) except as set forth in Section 5.1(b) of the Parent Disclosure Letter, the business of it and its Subsidiaries shall be conducted in the Ordinary Course of Business, and, to the Bridge Facilityextent consistent therewith, it shall, and it shall cause its Subsidiaries to, use its and their respective commercially reasonable efforts to preserve their business organizations, preserve their assets and properties in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent good repair and condition and preserve their relationships with or more beneficial those persons having significant business dealings with them to the Company end that their good will and its Subsidiaries, taken as a whole, than ongoing businesses shall be unimpaired at the Indebtedness being replaced or refinanced, Closing. Without limiting the generality of and in each case with a maturity date no more than 10 years after furtherance of the foregoing, from the date of this Agreement until the Contract evidencing such Indebtednessearlier of the Merger 1 Effective Time and the termination of this Agreement in accordance with its terms, except (X) as otherwise expressly permitted by this Agreement, (CY) intercompany Indebtedness among as the Company and its wholly owned Subsidiaries, may consent in writing (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 such consent not to exceed $250,000,000 be unreasonably withheld, delayed or conditioned), or (Z) as set forth in the aggregate at any time outstanding, (FSection 5.1(b) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend Parent Disclosure Letter, it will not and will not permit its Subsidiaries to:
(and fees and expenses a) adopt or propose any change in connection therewithParent’s certificate of incorporation or bylaws or the organizational documents of any of Parent’s Subsidiaries;
(b) merge 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company consolidate itself or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiariesany other Person, 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 except for 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 transactions among its wholly-owned Subsidiaries and except in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent any transaction in accordance 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 (HSection 5.1(b)(xiii), (I) any amendmentor restructure, refinancing reorganize 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 completely 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 practicepartially liquidate;
(vc) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair exercise or replacement settlement of facilitiesParent Equity Awards, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) issuances pursuant to redemptions of Common Units (as defined in Parent Certificate of Incorporation) pursuant to the GH LLC Agreement in the ordinary course Ordinary Course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017Business, 2018 and 2019 set forth (C) as permitted by Section 5.1(b)(xi), or (D) as disclosed in Section 5.01(b)(v5.1(b)(xi) of the Company Parent Disclosure Letter;
(vi) with respect to , issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the Retained Businessissuance, sale, pledge, disposition, grant, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 guarantee or encumbrance of, any shares of its capital stock or of any of its Subsidiaries (other than the issuance of shares by its wholly-owned Subsidiary to it or another of its wholly-owned Subsidiaries), or securities convertible or exchangeable into or exercisable forfor any shares of such capital stock, or any options, warrants or other rights of any kind to acquire, acquire any such shares, except (A) for any 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 shares of such awards and the Company Stock Planscapital stock or such convertible or exchangeable securities, other than (Bi) Investment Preferred Stock (as defined grants of Parent Equity Awards to new hires in the Bridge Facility) Ordinary Course of Business or (Cii) grants of Parent Equity Awards up to $100,000, in the aggregate, to non-executive officer employees;
(d) make any loans, advances or capital contributions to or investments in any Person (other than between itself and any of its direct or indirect Subsidiaries), other than advances to employees in the Ordinary Course of Business;
(e) 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 wholly any direct or indirect wholly-owned Subsidiaries Subsidiary to the Company it or to any other wholly direct or indirect wholly-owned Subsidiary Subsidiary) or enter into any agreement with respect to the voting of the Company; provided thatits capital stock;
(f) other than in connection with tax withholdings related to a Parent Equity Award, for the avoidance reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any 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 Parent’s capital stock or any securities convertible or exchangeable into or exercisable forfor any shares of Parent’s capital stock;
(g) incur any indebtedness or guarantee any indebtedness of another Person, or issue or sell any options, debt securities or warrants or other rights to acquireacquire any of its debt securities or of any of its Subsidiaries, any such shares except for purposes of (A) guarantees incurred in compliance with this Section 5.01(b)(viii)5.1(b) by it of indebtedness of its wholly-owned Subsidiaries, or (B) interest rate swaps on customary commercial terms consistent with past practice;
(ixh) except as may be required as a result of a change in applicable Law or GAAP or as required by Parent’s auditors or accountants, make any changes with respect to accounting policies or procedures;
(i) except as may be required as a result of a change in applicable Law, make, change or revoke any material Tax election, material method of Tax accounting or any annual Tax accounting period;
(j) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse (except with respect to patents expiring in accordance with their terms) or expire or otherwise dispose of any of its material assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries, except (A) in connection with services and products provided in the Retained BusinessOrdinary Course of Business and sales of obsolete assets, other than capital expenditures made (B) Liens securing indebtedness in accordance with Section 5.01(b)(v5.1(b)(vii), (C) pursuant to Contracts in effect prior to the date of this Agreement, and (D) assets with a fair market value of less than $500,000 in the aggregate;
(k) 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 spend in excess of (A) $25,000,000 if as set forth on Section 5.1(b)(xi) of the transaction is not in the ordinary course and $50,000,000 in any event or Parent Disclosure Letter, (B) $50,000,000 individually as required by any Parent Benefit Plan in effect on the date of this Agreement, or $200,000,000 (C) as required by applicable Law, (1) materially increase any compensation or benefit provided or to be provided to any current or former employee or other service provider of Parent or any of its Subsidiaries, other than increases in the aggregate Ordinary Course of Businesses and increases in compensation to certain employees, who are non-executive officers, which are reasonably necessary to bring such compensation to market level compensation, (2) enter into or adopt any new Parent Benefit Plan or amend in any yearmaterial respect or terminate any Parent Benefit Plan, (3) accelerate the funding or vesting of any compensation or benefit, or (4) make any material contribution to any Parent Benefit Plan other than contributions made in each case to acquire the Ordinary Course of Business;
(l) enter into, materially amend or terminate any business, whether by merger, consolidation, purchase of property Parent Material Contract (or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value Contract that would be a Parent Material Contract if it were in effect as of the date of the agreement for such acquisitionthis Agreement); provided , except that neither the Company nor any of Parent and its Retained Subsidiaries shall may (x) enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation Contracts of the Transactionstypes described in clauses (B), (F)(II) or (F)(V) of Section 4.2(t)(i)) and (y) amend Parent Material Contracts, so long as such Contracts and amendments will not, in the aggregate, increase the liabilities of Parent and its Subsidiaries by greater than $500,000;
(xm) acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or substantially all of the assets of any of the foregoing, other than (A) purchases of inventory and other assets in the Ordinary Course of Business or pursuant to existing Contracts, and (B) assets with a fair market value of no greater than $500,000 in the aggregate;
(n) make any payment or accrual of, or commit to, capital expenditures made for any period that are greater than 105% of the capital expenditures reflected in accordance with Section 5.01(b)(vParent’s capital expenditure budget provided to the Company prior to the date hereof;
(o) and compromise, settle or agree to settle any Action (including any Action relating to this Agreement or the transactions contemplated hereby), or consent to the same, other than purchases compromises, settlements or agreements with no obligation of Parent and licenses its Subsidiaries other than payment of film and television and production programming cash (includinA) in the Ordinary Course of Business or (B) not to exceed $300,
Appears in 1 contract
Interim Operations. (a) The Except (i) as described in Section 5.1(a) of the Company Disclosure Letter, (ii) as otherwise expressly required or permitted by this Agreement or any other Transaction Document, (iii) as required by applicable Law or (iv) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed, or denied), the Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Closing, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to operate the business of it and its Subsidiaries in the ordinary course consistent with past practice and to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 agentsCompany’s executive officers.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Closing, except (unless w) as described in the corresponding subsection of Section 5.1(b) of the Company Disclosure Letter, (x) as otherwise expressly required or permitted by this Agreement or any Transaction Document, (y) as required by applicable Law or (z) as Parent shall otherwise approve consent to in writing, writing (which approval consent shall not be unreasonably withheld, conditioned conditioned, delayed or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letterdenied), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)Subsidiaries’ Organizational Documents;
(ii) (A) merge or consolidate itself or any of its Subsidiaries with any other Person, except for transactions among its wholly owned Subsidiaries or restructure(B) adopt or enter into a plan of complete or partial liquidation, reorganize dissolution, merger, consolidation, restructuring, recapitalization 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 reorganization of the Company in which such Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions)its Subsidiaries;
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms acquire assets outside of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent from any other Person with past practice that does not materially increase a value or purchase price in the cost aggregate in excess of such Company Plan $250,000, or benefits provided under such Company Plan based on the cost on the date hereofacquire any business or entity (whether by merger or consolidation, (B) grant by purchase of substantially all assets or provide equity interests or by any other manner), in each case, in any transaction or retention bonuses to any directorseries of related transactions, officer, employee other than acquisitions or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect transactions pursuant to (1) employees below the 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 Contracts to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(iv) sell, lease, license or otherwise dispose of any of its material assets or properties, except (A) for sales, leases, licenses or other dispositions in the ordinary course of business and (B) for sales, leases, licenses or other dispositions of assets and properties with respect a fair market value not in excess of $250,000 in the aggregate or (C) pursuant to such Indebtedness Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (Gv) Indebtedness except pursuant to awards granted under the Bridge FacilityStock Plan (which, refinancings or replacements thereof and of commitments thereunderfor clarity, 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 may be granted after the date of this Agreement in the ordinary course of business consistent with past practice (including grants to new hires)), issue, sell, grant or in connection with a Sky Acquisition and not for speculative purposes; provided that authorize the issuance, sale or grant of any shares of capital stock or other securities of the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness or any of its Subsidiaries (other than issuances by a wholly owned Subsidiary of the type described in clauses Company to the Company or another wholly owned Subsidiary of the Company), or any options, warrants, convertible securities, subscription rights or other similar rights entitling its holder to receive or acquire any shares of such capital stock or other securities of the Company or any of its Subsidiaries;
(Gvi) reclassify, split, combine, subdivide, redeem or (H) aboverepurchase, (K) Indebtedness and replacements and refinancings thereof incurred any of capital stock of the Company or options, warrants or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except in connection with the funding repurchase, net exercise or settlement of Star India Private Limited and awards under the Stock Plan or the withholding of shares to satisfy Tax obligations with respect to awards under the Stock Plan;
(vii) declare, set aside, make or pay any dividend or distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or enter into any agreement with respect to the voting of its capital stock;
(viii) 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), other than in the ordinary course of business;
(ix) incur any Indebtedness for borrowed money or guarantee any 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; 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 except for Indebtedness for borrowed money indebtedness and lease financing incurred in the ordinary course of business consistent with past practice;
(vx) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any make capital expenditures other than in an amount not in excess of $1,000,000, in the aggregate;
(Axi) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement, other than in connection the ordinary course of business;
(xii) amend or modify in any material respect or terminate any Company Material Contract, or waive or release any material rights, claims or benefits under any Company Material Contract, in each case, other than in the ordinary course of business;
(xiii) make any material changes with respect to its accounting policies or procedures, except as required by changes in Law or GAAP;
(xiv) settle any Proceeding, except in the repair ordinary course of business or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if where such settlement is covered by insurance or if involves only the portion payment of which that is monetary damages in an amount not covered by insurance is less more than $100,000,000250,000 in the aggregate;
(xv) or (B) except in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017practice: (A) file any material amended Tax Return, 2018 and 2019 set forth in Section 5.01(b)(v(B) of the Company Disclosure Letter;
make, revoke or change any material Tax election, (viC) adopt or change any material Tax accounting method or period, (D) enter into any agreement with a Governmental Entity with respect to the Retained Businessmaterial Taxes, transfer(E) settle or compromise any examination, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place audit or other action with a Lien upon Governmental Entity of or otherwise dispose of relating to any material Intellectual Property; provided that this clause Taxes or settle or compromise any claim or assessment by a Governmental Entity in respect of material Taxes, or (viF) shall enter into any Tax sharing or similar agreement (excluding any commercial contract not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensesprimarily related to Taxes), in each case, of Intellectual Property, to the extent such action could reasonably be expected to have any adverse and material impact on Parent;
(Bxvi) 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 except in the ordinary course of business or $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) with respect pursuant to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose terms of any properties or assets (including capital stock Company Benefit Plan in effect as of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Plansor as required by Law, (BA) Investment Preferred Stock (as defined in materially increase the Bridge Facility) annual salary or (C) by wholly owned Subsidiaries to the Company consulting fees or to 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 target annual cash bonus opportunity of any shares of capital stock Company Employee with an annual salary 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);
(ix) with respect to the Retained Business, 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 spend consulting fees 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 250,000 as of the date of this Agreement, (B) enter into, establish, adopt, amend, or terminate any material Company Benefit Plan, (C) take any action to accelerate the agreement vesting or lapsing of restrictions or payment or funding of compensation or benefits under any Company Benefit Plan, (D) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or consulting fees in excess of $250,000 or (E) terminate the employment of any executive officer other than for such acquisition); provided cause or due to death or disability;
(xvii) sell, assign, exclusively license, abandon, or allow to lapse any material Company Intellectual Property, other than in the ordinary course of business consistent with past practice;
(xviii) other than as required by applicable Law, become a party to, establish, adopt, amend, commence participation in or enter into any collective bargaining or similar labor union Contract;
(xix) fail to use commercially reasonable efforts to keep current and in full force and effect, or to comply with the requirements of, or to apply for or renew, any Permit, approval, authorization, consent, license, registration or certificate issued by any Governmental Entity that neither is material to the conduct of the business of the Company nor and its Subsidiaries, taken as a whole;
(xx) file any prospectus supplement or registration statement or consummate any offering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxi) fail to maintain, cancel or materially change coverage under, in a manner materially detrimental to the Company or any of its Retained Subsidiaries, any insurance policy maintained with respect to the Company and its Subsidiaries shall and their assets and properties;
(xxii) enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation material new line of business outside of the Transactions;business currently conducted by the Company and its Subsidiaries as of the date of this Agreement; or
(xxxiii) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses agree or authorize to do any of film and television and production programming (includinthe foregoing.
Appears in 1 contract
Interim Operations. (a) The Company ▇▇▇▇▇▇ covenants and agrees as to itself and its Subsidiaries that, from and after the execution date hereof and until the earlier of the termination of this Agreement and prior pursuant to its terms or the First Effective Time (unless Parent VeriFone shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior until the earlier of the termination of this Agreement pursuant to its terms or the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents this Agreement, (including B) as VeriFone may approve in connection with the Separation and the Distribution) writing or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company ▇▇▇▇▇▇ Disclosure Letter), the Company shall ▇▇▇▇▇▇ will not and shall will not permit any of its Subsidiaries to:
(i) adopt or propose any change in its articles of association or other applicable governing instruments, except in accordance with respect Section 6.18(a) hereof;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly-owned Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(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 $2 million in any transaction or series of related transactions, other than acquisitions pursuant to SpinCo Contracts in effect as of the date of this Agreement and set forth in the SpinCo ▇▇▇▇▇▇ Disclosure Letter;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any its Subsidiaries (other than in the case issuance of clause (A)shares by a 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, except for the options that are planned to be granted under the ▇▇▇▇▇▇ 2006 Share Incentive Plan as set forth in Section 5.1(b)(i) of the ▇▇▇▇▇▇ Disclosure Letter;
(Av) amend create or incur any Lien material to it or any of its certificate Subsidiaries on any of incorporation its assets or bylaws any of its Subsidiaries;
(vi) make any loans, advances or comparable governing documents) capital contributions to or investments in any Person (other than amendments to the governing documents between itself and any of any Subsidiary of the Company that would not prevent, delay its direct or impair the Initial Merger or the other Transactionsindirect wholly-owned Subsidiaries), ;
(B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any the Special Cash Dividend or dividends or other distributions paid by a any direct or indirect wholly wholly-owned Subsidiary to ▇▇▇▇▇▇ or to any wholly-owned Subsidiary of the Company to another direct ▇▇▇▇▇▇) or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)stock;
(iiix) merge incur any indebtedness for borrowed money or consolidate with any other guarantee such indebtedness of another Person, or restructureissue or sell any debt securities or warrants or other rights to acquire any of its debt securities or of any of its Subsidiaries, 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: for (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken indebtedness for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowed money incurred in the ordinary course of business consistent with past practices (x) not to exceed $10 million in the aggregate or (y) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries or (C) interest rate swaps on customary commercial terms consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost and in compliance with its risk management policies in effect on the date hereofof this Agreement and not to exceed $10 million of notional debt in the aggregate;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the ▇▇▇▇▇▇ Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $5 million in the aggregate;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles;
(xii) other than the Israeli Tax Assessment (as defined 5.1(n) of the ▇▇▇▇▇▇ Disclosure Letter) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance or calling solely for a cash payment in an amount less than $5 million and including a full release of ▇▇▇▇▇▇ and its affiliates, as applicable;
(xiii) except in connection with the filing with the ITA of the Stock Option Plan (November 2004), make any material Tax election or make any application with any Governmental Entity or, except as set forth in Section 6.15, seek any tax ruling from a Governmental Entity, if there is a risk that such ruling may result in any terms, restrictions, liabilities or obligations being imposed on ▇▇▇▇▇▇ (or any ▇▇▇▇▇▇ Subsidiary) or its shareholders (including VeriFone);
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $5 million in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement;
(xv) except as required pursuant to Contracts in effect as of the date of this Agreement and set forth in Section 5.1(h)(i) of the ▇▇▇▇▇▇ Disclosure Letter, or as otherwise required by applicable Law, (Bi) grant or provide any transaction severance or retention bonuses termination payments or benefits to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee or of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to practice, (1ii) employees below increase the 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 welfare, severance or other benefits prior to such changeof, (D) increase the severance pay any bonus to, or termination payments or benefits payable make any new equity awards to any of its director, officer, officer or employee or other service provider of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (Eiii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including of its benefit plans, to the extent not already provided in any equity-based awards)such benefit plans, (Fv) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP; or (Gvi) forgive any loans to any of its or of any of its Subsidiaries’ directors, officers or employees;
(xvi) 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;
(xvii) take any action that would reasonably be expected to result in a material increase in Tax liability (or a corresponding loss of Tax attributes) other than in the ordinary course of business; or
(xviii) agree, authorize or commit to do any of the foregoing.
(b) ▇▇▇▇▇▇ shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries’ directors, officers or employees pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, provide VeriFone with a copy of the Company intended communication and provide VeriFone a reasonable period of time to review and comment on the communication, and the parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) VeriFone covenants and agrees as to itself and its Significant Subsidiaries that, after the date hereof and prior to the Effective Time (unless ▇▇▇▇▇▇ shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, VeriFone will not:
(i) adopt or propose any change in its certificate of incorporation;
(ii) merge or consolidate itself or any of its Significant Subsidiaries with any other Person, except for any such transactions among its wholly-owned Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) 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);
(iv) incur any Indebtedness reclassify, split, combine, subdivide or issue any warrants or other rights to acquire any Indebtednessredeem, 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses acquire, directly or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 ofindirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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 its 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)stock;
(ixv) with respect take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Retained BusinessMerger set forth in Article VII not being satisfied; or
(vi) agree, 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 authorize or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 1 contract
Interim Operations. (a) The Except as set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees as to itself and its Subsidiaries and undertakes as to itself and its Subsidiaries to use commercially reasonable efforts in relation to its Joint Ventures as though for the purpose of the remainder of this Article VI its Joint Ventures were Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed, and except as (1) required by applicable Law, (2) otherwise expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by this Agreement):
(a) its and its Subsidiaries' businesses shall be conducted in the Final Step Planordinary and usual course (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 (3) otherwise expressly disclosed in Section 5.01(a) services materially different from existing products or services of the Company Disclosure Letter)and its Subsidiaries, to enter into or engage in new lines of business, to utilize new distribution methods, expand into new geographic territories outside of the United States, or to exit any current business of the Company shallor its Subsidiaries, without Parent's prior written approval);
(b) to the extent consistent with (a) above it and shall cause each of its Subsidiaries to, shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve its business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ its existing relations and goodwill with Governmental Entities, customers, suppliers, reinsurers, distributors, licensors, creditors, lessors, employees and business 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.associates;
(bc) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval it shall not be unreasonably withheld(i) issue, conditioned sell, pledge, dispose of or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required encumber any capital stock owned by applicable Law, (2) expressly required by the Transaction Documents (including it in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
Subsidiaries; (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (Aii) amend its certificate of incorporation Charter or bylaws by-laws or amend, modify or terminate the Rights Agreement except as contemplated by Section 5.1(o)(ii); (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (Biii) split, combine, subdivide combine or reclassify its outstanding shares of capital stock stock; (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)iv) authorize, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any other than dividends or distributions paid by a from its direct or indirect wholly wholly-owned Subsidiary of Subsidiaries and other than regular quarterly dividends paid by the Company to another direct or indirect wholly owned Subsidiary on its Common Shares not in excess of $.09 per share, with usual record and payment dates and in accordance with the Company or to the Company Company's past dividend policy; or (2v) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, except in connection with any of 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 into or exercisable for any shares of its stock;
(d) 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 other property or assets (other than (1) Shares issuable pursuant to options outstanding on the 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 date hereof under any 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the CompanyPlans);
; (ii) merge other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or consolidate with encumber any other Personproperty or assets (including capital stock of any of its Subsidiaries) or incur or modify any material indebtedness or other liability; (iii) make or authorize or commit for any capital expenditures, including entering into capital lease obligations, other than in amounts not exceeding $1 million in the aggregate or, by any means, make any acquisition of, or restructureinvestment in, reorganize assets or completely stock of any other Person or partially liquidate entity, including by way of assumption reinsurance, in excess of $100,000 individually or $1 million in the aggregate (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 Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement ordinary course investment and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactionsreinsurance activities);
; (iiiiv) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adoptenter into, amend or terminate any material Company Plan Contract or (v) permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of business;
(e) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any employee benefit or incentive plan or employment or other agreement (including the terms Compensation and Benefit Plans) or hire or terminate the employment of key employees, or increase the salary, wage, bonus or other compensation of any outstanding equity-based awards employees except increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases);
(f) neither it nor any of its Subsidiaries shall pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction of claims, liabilities or obligations legally due and payable and arising in the ordinary and usual course of business and such other claims, liabilities or obligations as shall not exceed $1 million in the aggregate and other than regular semi-annual payments paid by MMI Capital Trust I on its 7 5/8% Series B Capital Trust Securities (the "Trust Securities") pursuant to the Indenture, dated December 23, 1997, between The Chase Manhattan Bank and the Company, pursuant to which the Trust Securities were issued;
(g) neither it nor any of its Subsidiaries shall make, change or revoke any Tax election, settle or compromise any material Tax liability arising in any audit, change its method of accounting if such action taken change would have a material impact on Taxes, enter into any closing or other agreement with respect to a material amount of Taxes, file a request for purposes refund of replacinga material amount of Taxes (but not including the prosecution of any refund claim pending on the date hereof), renewing or extending a broadly applicable material Company Plan file an amended Tax Return if such Tax Return is materially different from the original return to which it relates, except, in each case, (i) in the ordinary course of business and consistent with the Company's past practice that does in respect of the Tax at issue in the jurisdiction in question or (ii) with the consent of Parent, such consent not materially increase to be unreasonably withheld;
(h) neither it nor any of its Subsidiaries shall enter into any agreement containing any provision or covenant limiting in any material respect the cost ability of such the Company Plan or benefits provided under such Company Plan based on the cost on the date hereofany Subsidiary or Affiliate to (A) sell any products or services of or to any other Person, (B) grant 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 any transaction products or retention bonuses services to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, Subsidiaries or Affiliates;
(Ci) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or neither it nor any of its SubsidiariesSubsidiaries shall enter into any new quota share or other reinsurance transaction (A) which does not contain standard cancellation and termination provisions, (B) which, except in the ordinary course of business consistent with past practice with respect business, materially increases or reduces the Company Insurance Subsidiaries' consolidated ratio of net written premiums to gross written premiums or (1C) employees below pursuant to which $1 million or more in gross written premiums are ceded by the 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 severance or termination payments or benefits payable Company Insurance Subsidiaries to any director, officer, employee or Person other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of than the Company or any of its Subsidiaries;
(ivj) 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or neither it nor any of its Subsidiaries with respect shall take any action or omit to such Indebtedness take any action that would cause any of its representations and warranties herein to become untrue in any material respect;
(and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have k) neither it nor 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; providedInsurance Subsidiaries will alter or amend in any material respect their existing underwriting, furtherclaim handling, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G)loss control, (H) Indebtedness assumed investment, actuarial, financial reporting or accounting practices, guidelines or policies or 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 material assumption underlying an actuarial practice or in connection with a Sky Acquisition and not for speculative purposespolicy, except as may be required by GAAP or SAP; 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;and
(vl) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 it nor any of its Retained Subsidiaries shall will authorize or enter into an agreement to do any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 1 contract
Sources: Merger Agreement (Mmi Companies Inc)
Interim Operations. (a) The Company Seller covenants and agrees as to itself and its Subsidiaries that, from and after except as (w) set forth in Section 5.1 of the execution of this Agreement and prior to the First Effective Time Company Disclosure Schedule, (unless Parent shall x) as Purchaser may otherwise approve consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed), and except as (1y) required by this Agreement, or (z) required by applicable LawLaw or Governmental Order, from the date of this Agreement until the Closing, it will cause the Company and each of the Company’s Subsidiaries to conduct their respective businesses in the Company Ordinary Course of Business and, to the extent consistent therewith and subject to prudent management of workforce needs and on-going programs in force as of the date hereof (2) expressly required by to the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed extent such programs are set forth in Section 5.01(a) 5.1 of the Company Disclosure LetterSchedule), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries 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 efforts to preserve their respective business organizations intact, maintain in effect their respective Governmental Authorizations that are required for the Retained Businesscontinued operation of the Company’s and its Subsidiaries’ organization respective businesses as they are presently conducted, to preserve intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, their respective customers, supplierssuppliers and employees, distributorseach in all material respects, licensorsto make the regulatory filings as the Company and its Subsidiaries would have otherwise made in the Company Ordinary Course of Business and to maintain with financially responsible insurance companies (or through self insurance, creditors, lessors, employees consistent with past practice) insurance in such amounts and business associates against such risks and others having material business dealings losses as are customary for companies engaged in their respective businesses and consistent with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services past practice of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Closing, except as (unless Parent shall A) set forth in Section 5.1 of the Company Disclosure Schedule, (B) as Purchaser may otherwise approve consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed), and which determination shall take into account (C) required by this Agreement (provided that, actions taken to comply with the obligation in the first sentence of this Section 5.1(a) to act in the Company Overview PresentationOrdinary Course of Business shall not be included within the scope of this clause (C)), and except as or (1D) required by applicable LawLaw or Governmental Order, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) Seller will cause each of the Company Disclosure Letter), and each of the Company shall Company’s Subsidiaries not and shall not permit any of its Subsidiaries to:
(i) except with respect adopt any change to SpinCo and the SpinCo Subsidiaries (its Organizational Documents other than amendments which are ministerial in the case of clause nature or otherwise immaterial;
(A)), ii) (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide combine or reclassify any of its outstanding limited liability interests or shares of capital stock (or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for limited liability interests or shares of its capital stock, directly or indirectly redeem, repurchase or otherwise acquire any limited liability interests or shares of its capital stock, except for any such transaction in the Company Ordinary Course of Business by a wholly owned subsidiary Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transactiontransaction and that does not adversely affect the Company and its Subsidiaries taken as a whole, (B) merge or consolidate itself with any other Person, except for any merger or consolidation among wholly owned Subsidiaries of the Company that does not adversely affect the Company and its Subsidiaries taken as a whole, or (C) restructure, reorganize or completely or partially liquidate or dissolve itself (except as permitted by clause (B) in the Company Ordinary Course of Business that does not adversely affect the Company and its Subsidiaries taken as a whole);
(iii) issue or sell, or authorize the issuance or sale of (x) any shares of its limited liability company interest or capital stock, as applicable (other than the issuance of shares of limited liability company interest or capital stock, as applicable, by the Company to Seller or by a wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary of the Company), (Cy) any securities convertible into or exercisable for any shares of its limited liability company interest or capital stock, as applicable, or (z) any options, calls, warrants or other rights to acquire any shares of its limited liability company interest or capital stock, as applicable, or such convertible or exercisable securities;
(iv) declare, set aside or pay any dividend or distribution other distribution, payable in cash, stock or property (property, with respect to its limited liability company interest or any combination thereof) in respect of any shares of its capital stock stock, as applicable (except for (1) any dividends or other distributions declared, set aside or paid by a any direct or indirect wholly owned Subsidiary of the Company to another the Company or to any other direct or indirect wholly owned Subsidiary of the Company) in excess of $25 million in each calendar quarter between the date hereof and the Closing Date (other than any distributions made in respect of any repayment of Indebtedness outstanding to Subsidiaries of Parent (other than the Company and its Subsidiaries) and the payment of any “make-whole” premium payable in accordance with the terms of such borrowings upon prepayment thereof);
(v) create or incur any Indebtedness or guarantee Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire its debt securities or enter into any “keep well” or other agreement to maintain the financial condition of another Person, or enter into any arrangement having the same economic effect as the foregoing (including any capital leases, “synthetic leases” or conditional sale or other title retention agreements), except for (i) Indebtedness or issuances or sales of debt securities or warrants or other rights to acquire its debt securities incurred under existing credit facilities, commercial paper facilities, lines of credit or the extension or refinancing thereof or the extension or refinancing of any other Indebtedness (provided that (x) with respect to the entry into, extension or renewal of any Indebtedness, such Indebtedness shall only be entered into, extended or renewed as it matures, on commercially reasonable terms and shall be prepayable at the Closing and (y) to the extent that after the date hereof, the Company and its Subsidiaries incur any additional Indebtedness owed to Seller and its Affiliates, such additional Indebtedness shall be on terms substantially similar to the Affiliate Indebtedness in existence on the date hereof, except that it may omit provisions for “make-whole” payments), (ii) guarantees in connection with the extension or refinancing of Indebtedness permitted by this Section 5.1(a)(v), (iii) Indebtedness used solely to fund Unplanned Capital Expenditures or related non-capital expenditures; and (iv) Indebtedness not exceeding $600 million in the aggregate;
(vi) make any loans or advances or capital contributions to, or investments in, any other Person (other than loans or advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $5 million in the aggregate;
(2vii) normal semiannual cash dividends create or incur any Lien (other than Permitted Liens) on its material properties or assets;
(viii) other than in the Common Stock Company Ordinary Course of Business, acquire any business or any division thereof (by merger, consolidation, or acquisition of stock or assets or any other business combination) from any other Person (other than the Company or its Subsidiaries) in excess of $5 million in any one transaction (or related series of transactions) and $20 million in the aggregate, other than acquisitions pursuant to Contracts, to which it is a party or by which it is bound, in effect as described of the date of this Agreement, solely to the extent such Contracts have been provided to Purchaser prior to the date hereof and are set forth in Section 5.01(b)(i5.1(a) of the Company Disclosure LetterSchedule;
(ix) permit any capital expenditure to be made which is not in accordance with “good utility practice”;
(x) other than (x) in the Company Ordinary Course of Business, (y) to the Company or any of its Subsidiaries or (z) pursuant to Contracts, to which it is a party or by which it is bound, in effect as of the date of this Agreement, solely to the extent such Contracts have been provided to Purchaser prior to the date hereof and are set forth in Section 5.1(a)(x) of the Company Disclosure Schedule, sell, lease or otherwise dispose of any of its assets or properties having an aggregate value in excess of $20 million, except for sales of obsolete assets in the Company Ordinary Course of Business;
(xi) other than in the Company Ordinary Course of Business or as otherwise expressly permitted by this Section 5.1, enter into, amend, modify or terminate (other than at the end of a term) any Company Material Contract in any material respect (or any Contract that would be a Company Material Contract if in existence on the date hereof);
(xii) make any material changes with respect to its financial or regulatory accounting principles or procedures (other than as required by changes in GAAP or applicable regulatory accounting requirements);
(xiii) settle or compromise any material Action (other than the Rate Cases or any other federal or state regulatory proceeding), if such settlement or compromise, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the post-Closing operation of its business or will require a material payment by the Company or its Subsidiaries; provided that, before entering into any settlement or compromise of any material Action, which Purchaser may settle or compromise under this Section 5.1(a)(xiii), Seller consults with Purchaser with respect to such settlement or compromise;
(xiv) except as required by Contracts or Benefit Plans, in each case in effect as of the date of this Agreement and set forth on Section 3.12(a) or Section 5.1(a) of the Company Disclosure Schedule, (A) grant any new (or increase the) rights to severance or termination payments or benefits to any of its current or former directors, officers or employees (other than to officers or employees newly hired or promoted to fill any vacancies in the Company Ordinary Course of Business consistent with past practice), (B) except as in the Company Ordinary Course of Business consistent with past practice, pay any severance or termination payments or benefits to any of its current or former directors, officers or employees, (C) increase the salary, annual bonus opportunity, long-term incentive opportunity or other compensation opportunities of any of its current or former directors, officers or employees, except for (1) increases in salary, annual bonus opportunity and long-term incentive opportunity in connection with promotions and (2) any annual increases in salary (and, to the extent based on salary, any corresponding increases in annual bonus or long-term incentive opportunities) for 2011 that are in the Company Ordinary Course of Business consistent with past practices, (D) enter into pay any agreement with respect to bonus or long-term incentive amounts in excess of the voting of its capital stockamounts earned based on actual performance, or (E) purchaseestablish, repurchaseadopt, redeem enter into, amend or otherwise acquire terminate, or materially increase the benefits under, any shares of its capital stock Company Benefit Plan or any securities convertible plan, agreement, program, policy, trust, fund, or exchangeable into or exercisable for any shares other arrangement that would be a Company Benefit Plan if it were in existence as of its capital stock (the date of this Agreement, other than (1) agreements with newly hired or promoted officers or employees, (2) routine or administrative amendments to Company Benefit Plans that do not materially increase the costs under the Company Benefit Plans, or (3) as expressly permitted by other provisions of this Section 5.1(a)(xiv), (F) enter into or materially amend any collective bargaining agreement, (G) loan or advance any money or other property to any present or former director, consultant, officer, or employee of the Company or its Subsidiaries, other than routine (1) travel or expense advances or (2) tax equalization advances to expatriate employees, (H) grant any equity or equity-based compensation awards, with respect to equity interests of the Company or any of its Subsidiaries or that are payable by the Company or its Subsidiaries, or (I) change the actuarial or other assumptions used to calculate the funding obligations or contribution rates of any Company Benefit Plan subject to Title IV of ERISA, except as may be required by GAAP or applicable Law;
(xv) except for Tax items for which Seller is responsible pursuant to this Agreement, make or change any material Tax election, change any annual accounting period in respect of material Taxes, adopt or change any accounting method with respect to material Taxes, file any amended material Tax Return, enter into any material closing agreement, settle or compromise any proceeding with respect to any material Tax claim or assessment relating to the forfeiture ofCompany or any of its Subsidiaries, surrender any right to claim a refund of material Taxes, or withholding consent to any extension or waiver of Taxes the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(xvi) modify in any material respect the Company Trading Guidelines, other than modifications that are not less restrictive to the Company and its Subsidiaries or permit the Net Company Position to be outside of the risk parameters that are set forth in the Company Trading Guidelines, except for waivers or exceptions granted or utilized consistent with respect tothe terms of the Company Trading Guidelines after consultation with Purchaser;
(xvii) except for transactions between (x) the Company and its Subsidiaries or (y) among the Company’s Subsidiaries, in each case in the Company Restricted Stock UnitsOrdinary Course of Business and that do not adversely affect the Company or its Subsidiaries, redeem, repurchase, defease, cancel, prepay, forgive or otherwise acquire any Indebtedness or any debt securities or rights to acquire debt securities of the Company Deferred Stock Units or any of its Subsidiaries, other than (A) at stated maturity, (B) any required amortization payments and mandatory prepayments and (C) Indebtedness arising under the agreements disclosed in Section 5.1(a) of the Company Performance Stock UnitsDisclosure Schedule, in each case in accordance with past practice and with the terms of the Company Stock Plans instrument governing such Indebtedness 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights to the extent that, after the date hereof and prior to the Closing, Seller does not cause the Company to distribute all amounts that it is permitted to distribute to Seller pursuant to Section 5.1(a)(iv) hereof, Seller may cause the Company to pay to Seller or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not its Affiliates an amount equal to be an issuance, sale or grant such undistributed amount pursuant to the repayment of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or existing Indebtedness owed by the Company to Seller and its Affiliates (other rights to acquire, any such shares for purposes of this Section 5.01(b)(viiithan the Company and its Subsidiaries));
(ixxviii) with respect to the Retained Business, 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 productionthe Rate Cases, which are addressed in Section 5.18 hereof, agree or consent to any material agreement or material modifications of existing agreements or course of dealings with any Governmental Authority in respect of the operations of their businesses, except (w) as required by Law or applicable Governmental Orders, (x) to obtain or renew the Governmental Authorizations, (y) agreements in the Company Ordinary Course of Business consistent with past practice or (z) to effect the consummation of the transactions contemplated hereby to the extent such agreements or modifications are not reasonably likely, individually or in the aggregate, to have a Company Material Adverse Effect;
(xix) other than with respect to new Indebtedness permitted pursuant to this Section 5.1(a), enter into, amend, modify, terminate (except as such termination is subject required pursuant to Section 5.01(b)(x), spend 5.7 hereof) or commit to spend in excess of waive any rights under any Contract with (A) $25,000,000 if Seller or any of its Affiliates (other than the transaction is not in the ordinary course Company and $50,000,000 in any event its Subsidiaries) or (B) $50,000,000 individually with any executive officer or $200,000,000 director, or (other than on arm’s-length terms in the aggregate Company Ordinary Course of Business) any Person in which such executive officer or director or any yearimmediate family member of such executive officer or director, 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactionshas over a 10% interest;
(xxx) other than fail to maintain a reasonable level of working capital expenditures made in accordance consistent with Section 5.01(b)(v) past practice and other than purchases and licenses of film and television and production programming (includin“goo
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after During the execution period commencing on the date of this Agreement and prior to ending on the First earlier of the Effective Time and the termination of this Agreement pursuant to Article VII (unless the “Pre-Closing Period”), except (i) as required, expressly permitted or otherwise expressly contemplated under this Agreement or the other Transaction Documents or as required by applicable Law, (ii) with the prior written consent of Parent shall otherwise approve in writing, (which approval shall consent will not be unreasonably withheld, conditioned or delayed), and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3iii) otherwise expressly disclosed as set forth in Section 5.01(a5.1(a) of the Company Disclosure Letter), the Company shallwill, and shall will cause each of its Subsidiaries to, use its commercially reasonable best efforts to (A) conduct its and each of its Subsidiaries’ business and operations in the Retained Business ordinary course in a manner consistent with past practice, (B) keep available the services of the current directors, officers, employees, key service providers and consultants of the Company and each of its Subsidiaries and (C) preserve the goodwill and current relationships of the Company and each of its Subsidiaries with material customers, suppliers and other Persons with which the Company or any of its Subsidiaries has business relations.
(b) Without limiting the generality of Section 5.1(a), during the Pre-Closing Period, except (x) as required, expressly permitted or otherwise expressly contemplated under this Agreement or the other Transaction Documents or as required by applicable Law, (y) with the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned or delayed), or (z) as set forth in Section 5.1(b) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries will:
(i) (A) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any shares of capital stock or other equity interests, except for dividends declared prior to the date of this Agreement or paid by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, or (B) repurchase, redeem or otherwise reacquire, directly or indirectly, any shares of capital stock or other equity or voting interests or any rights, warrants or options to acquire any shares of capital stock or other equity or voting interests, other than to satisfy the exercise price and/or Tax obligations with respect to Company Equity Awards upon exercise, vesting, or settlement, in each case, in accordance with the applicable Company Equity Plan;
(ii) adjust, split, combine, subdivide, recapitalize, reclassify or otherwise amend the terms of any shares of Company Common Stock or other equity or voting interests;
(iii) sell, issue, grant, deliver, pledge, transfer, encumber or authorize the issuance, sale, delivery, pledge, transfer, encumbrance or grant by any the Company or any of its Subsidiaries (other than pursuant to agreements in effect as of the date of this Agreement and made available to Parent and except for transactions between the Company and any wholly owned Subsidiary of the Company or between wholly owned Subsidiaries of the Company) of (A) any capital stock or other equity interest of the Company or any of its Subsidiaries, (B) any option, call, warrant, restricted securities or right to acquire any capital stock or other equity interest of the Company or any of its Subsidiaries (other than pursuant to the Company Equity Plans in the ordinary course of business) or (C) any instrument convertible into or exchangeable for any capital stock or other equity interest of the Company or any of its Subsidiaries (except pursuant to the exercise, vesting or settlement of Company Equity Awards outstanding as of the date hereof in accordance with the terms governing such Company Equity Awards);
(iv) except as required by Company Benefit Plans in effect as of the date of this Agreement, (A) increase the compensation or other benefits payable or that could become payable by the Company or any of its Subsidiaries or provided to the Company’s directors, officers or employees, (B) enter into any change of control, severance or retention agreement with any employee of the Company (except for severance agreements entered into with employees in the ordinary course of business in connection with terminations of employment), or (C) establish, adopt, enter into or amend any Company Benefit Plan, take any action to accelerate rights under any Company Benefit Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Benefit Plan if it were in existence as of the date of this Agreement or make any contribution to any Company Benefit Plan, other than contributions required by Law, the terms of such Company Benefits Plans as in effect on the date hereof, or that are made in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely except as would not result in a material increase in cost to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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.Company;
(bv) Without limiting make any capital expenditures or incur any obligations or liabilities in respect thereof that exceed the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date amount of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required capital expenditures contemplated by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) Company’s existing capital budget, a copy of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:which has been made available to Parent;
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (Avi) amend its certificate or modify the Articles of incorporation Incorporation or bylaws the Bylaws (or the comparable governing documents) (other than amendments to the governing organizational documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company’s Subsidiaries);
(iivii) merge repurchase, prepay, create or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness indebtedness for borrowed money or issue any warrants debt securities or other rights to acquire assume, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise) the obligations any IndebtednessPerson for borrowed money, 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(vviii) with respect enter into any Contract that would, if entered into prior to the Retained Businessdate hereof, be a Company Material Contract, or modify, amend, extend or voluntarily terminate (other than with respect to acquisitions non-renewals occurring in the ordinary course of businessesbusiness) any Company Material Contract, which is subject to Section 5.01(b)(ix)or waive, and other than with respect to film and television production and programming release or assign any rights or claims thereunder;
(including sports rightsix) with third parties enter into any new line of business or video game productiondiscontinue or change any existing line of business;
(x) compromise, which is subject to Section 5.01(b)(x)waive, make discharge, settle or commit to satisfy any capital expenditures Action involving the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $100,000 individually or $500,000 in the aggregate, other than (A) any Action brought against Parent or Merger Sub arising out of breach of this Agreement by Parent or Merger Sub and (B) the settlement of claims, liabilities or obligations adequately reserved against on the Company Balance Sheet, provided, that, neither the Company nor any of its Subsidiaries shall settle or agree to settle any Action which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business;
(xi) change any of the accounting methods, principles or practices used by it unless required by a change in GAAP or applicable Law;
(xii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or other reorganization (other than this Agreement or otherwise in connection with the repair or replacement of facilitiesTransactions), properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) adopt or implement any shareholder rights plan or similar arrangement, (C) acquire (by merging or consolidating with, by purchasing any equity interest in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% or portion of the amounts reflected assets of, or by any other manner) any equity interest in the Company’s capital expenditure budget for each of 2017a Person, 2018 and 2019 set forth in Section 5.01(b)(vor (D) of the Company Disclosure Letter;
(vi) with respect to the Retained Businessacquire, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon abandon, allow to lapse, fail to prosecute or otherwise maintain in full force and effect, dispose of or encumber (other than Permitted Liens) any material Intellectual Property; provided that assets, other than, in the case of this clause (vi) shall not restrict (A) ordinary course D), acquisitions or dispositions of materials and inventory, sales or leases of inventory and grants of non-exclusive licenses of, or ordinary course security interests covenants with respect to, Intellectual Property (excluding abandoned Registered Intellectual Property that the Company considers obsolete or not material to its business as currently conducted or presently contemplated to be conducted in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensesits business judgment), in each case, in the ordinary course of business;
(xiii) sell, dispose of, transfer, assign, encumber, pledge, abandon, dedicate to the public, fail to maintain, or allow to lapse, in whole or in part, any Company-Owned IP (excluding abandoned Registered Intellectual PropertyProperty that the Company considers obsolete or not material to its business as currently conducted or presently contemplated to be conducted in its business judgment);
(xiv) grant to any other Person any license, or enter into any release, immunity or covenant not to sue with respect to any Company-Owned IP (other than the grant of non-exclusive licenses entered into in the ordinary course of business);
(xv) (A) make, rescind or change any material Tax election or settle or compromise any material Tax liability or Action, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per licensechange its taxable year, (C) sales change any material method of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries)accounting for Tax purposes, (D) licensesamend any material Tax Return, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreementsenter into any closing agreement or other agreement with any tax authority, except, in each case, as required by applicable Law;
(viixvi) enter into any collective bargaining agreement or other labor-related agreement or arrangement with respect to any labor union or other employee association, or recognize or certify any labor union or other employee association as the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon bargaining representative for the employees of the Company or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including Subsidiaries, in all cases, except as required by applicable Law;
(xvii) terminate, amend or modify in any Intellectual Propertymaterial respect, which is governed by Section 5.01(b)(vi))or fail to exercise renewal rights with respect to, any Insurance Arrangements;
(xviii) enter into any Contract with a Sanctioned Person in violation of Sanctions;
(xix) enter into any Affiliate Transaction or enter into any Contract contemplating or relating to an Affiliate Transaction;
(xx) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) sales, leases, licenses or other dispositions extensions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect credit 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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued customers pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the terms of a Contract entered into prior to the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plansmade available to Parent, (B) Investment Preferred Stock (as defined advances to directors, officers and other employees for reasonable and documented out-of-pocket travel and other business-related expenses, in each case in the Bridge Facility) ordinary course of business and in compliance with the Company’s policies related thereto, or (C) by loans, advances or capital contributions to, or investments in, direct or indirect wholly owned Subsidiaries of the Company;
(xxi) adversely amend, modify or fail to renew or otherwise maintain any Company Permits;
(xxii) commence or terminate the employment of any employee of the Company or any of its Subsidiaries (except for employees earning less than $200,000 in total annual base salary); or
(xxiii) authorize, commit or agree to do 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 foregoing.
(c) The Company may request prior written consent from Parent (such consent not to be an issuanceunreasonably withheld, sale conditioned 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);
(ixdelayed) with respect to the Retained Businessactions proscribed in this Section 5.1 by delivering notice pursuant to Section 8.7.
(d) The Company, on the one hand, and Parent and Merger Sub, on the other than capital expenditures made hand, acknowledge and agree that (i) nothing contained in accordance this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or any of its Subsidiaries prior to the Effective Time, (ii) prior to the Effective Time, the Company will exercise, consistent with Section 5.01(b)(vthe terms and conditions of this Agreement, control and supervision over its and its Subsidiaries’ operations, and (iii) and other than notwithstanding anything to the contrary in this Agreement, no consent of Parent will be required with respect to film and television production and programming or video game production, which is subject any matter set forth in this Section 5.1 to Section 5.01(b)(x), spend or commit to spend in excess the extent the requirement 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 such consent would be a violation 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinapplicable Law.
Appears in 1 contract
Sources: Merger Agreement (Logility Supply Chain Solutions, Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to date hereof until the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed), and except as otherwise expressly permitted by this Agreement or as required in writing by a Governmental Entity (1including Gaming Authorities) of competent jurisdiction or required by applicable Law, (2) expressly required by the Transaction Documents Laws (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure LetterGaming Laws), the Company shall, it shall and shall cause each of its Subsidiaries to, use its reasonable best efforts to shall conduct the Retained Business their businesses in all material respects in the ordinary course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance consistent with the specific matters set forth belowforegoing, the Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization intact their business organizations substantially intact, maintain satisfactory relationships with customers and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others suppliers having material business dealings with them, maintain the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) effectiveness of the Company’s Licenses and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) their key employees. Without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly permitted by this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except withheld or conditioned) (C) as required in writing by a Governmental Entity (1including Gaming Authorities) of competent jurisdiction or required by applicable Law, (2) expressly required by the Transaction Documents Laws (including in connection with the Separation and the DistributionGaming Laws) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b6.1(a) of the Company Disclosure Letter)Schedule, the Company shall will not and shall not permit any of will cause its Subsidiaries not to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws of the Company;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person;
(iii) make any acquisition of all or substantially all of the capital stock or assets of any other Person, whether by way of stock purchase, asset purchase, merger or otherwise (other than amendments to the governing documents formation of new wholly-owned Subsidiaries), or of any other assets of any other Person for which the fair market value of the total consideration paid by the Company and its Subsidiaries exceeds $250,000 individually or $500,000 in the aggregate;
(iv) issue, sell, deliver, pledge, dispose of, grant, transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, delivery, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock or voting debt of the Company or any of its Subsidiaries (other than (A) upon conversion of Preferred Stock outstanding as of the date hereof in accordance with the terms thereof and (B) the issuance of shares or other equity securities by a wholly-owned Subsidiary of the Company that would not prevent, delay to the Company or impair another wholly-owned Subsidiary of the Initial Merger or the other TransactionsCompany), or securities convertible or exchangeable into or exercisable for any shares of such capital stock or voting debt, or any options, warrants or other rights of any kind to acquire any shares of such capital stock voting debt or such convertible or exchangeable securities, or stock appreciation rights;
(Bv) except for dividends in respect of the Preferred Stock required to be paid or accrued in accordance with the Company’s certificate of incorporation and the certificates of designations thereof, 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 dividends paid by any direct or indirect wholly-owned Subsidiary of the Company);
(vi) except for transactions among the Company and its direct or indirect wholly-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries, reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)stock;
(iivii) merge subject to Section 6.20, change in any material respect its financial or consolidate with any other PersonTax accounting policies or procedures, except as required by applicable Law or 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 changes in which such Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions)GAAP;
(iiiviii) except as expressly required other than Transaction Litigation (which is addressed in Section 6.13), settle, release, waive or compromise any litigation or other pending or threatened proceedings or claims by any Company Plan as in effect on the date hereof: or before a Governmental Entity or arbitrator if such settlement, release, waiver or compromise (A) establishwith respect to the payment of monetary damages, adopt, amend or terminate any material Company Plan or amend involves the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 payment by the Company or any of its SubsidiariesSubsidiaries of monetary damages exceeding $250,000 in any individual matter, (C) increase the compensation, bonus or pension, welfare or other benefits net of any directoramount covered by insurance or third-party indemnification in respect of such matter or (B) with respect to any non-monetary terms and conditions therein, officer imposes or employee requires actions that would or would, individually or in the aggregate, reasonably be expected to materially restrict or limit the operations of the business of the Company or any of and its Subsidiaries, Subsidiaries as conducted on the date hereof;
(ix) except as required by a Benefit Plan in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 effect prior to such changethe date of this Agreement that is set forth on Section 6.1(a)(ix) of the Company Disclosure Schedule, (DA) increase the grant or provide any severance or termination payments or benefits payable to any director, officer, employee current or other service provider of the former Company Employee or any of its Subsidiaries, (E) take any action to accelerate the vesting other current or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 Indebtednessformer service provider, (B) except with respect to increase the Bridge Facilitycompensation or benefits of any current or former Company Employee or any other current or former service provider, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the other than customary annual increases for non-executive 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 Employees in the ordinary course of business consistent with past practice, (C) establish, enter into, adopt, join, terminate or amend any Benefit Plan or any plan, program, arrangement, policy or agreement that would be a Benefit Plan if it were in existence on the date hereof, (D) hire or otherwise retain the services of any new member of the Company Board, officer or other senior executive, (E) commercial paper issued take any action to fund or in any other way secure the payment of compensation or benefits under any Contract or Benefit Plan, or (F) except as specifically required by this Agreement, exercise any discretion to accelerate the vesting or payment of any compensation or benefit under any Benefit Plan;
(x) adopt a plan or agreement of complete or partial liquidation or dissolution;
(xi) enter into any new line of business;
(xii) other than (A) any sale, lease, assignment, encumbrances or other disposition of inventory in the ordinary course of business consistent with past practice in a principal amount and (B) dispositions of assets if the book value thereof does not to exceed $250,000,000 in the aggregate at $500,000, sell, lease, assign, encumber or otherwise dispose of, or agree to sell, lease, assign, encumber or otherwise dispose of, 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations assets of the Company or any of its Subsidiaries with respect Subsidiaries;
(xiii) fail to such Indebtedness maintain its existing insurance coverage of all types;
(and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (Gxiv) 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 except in the ordinary course of business consistent with past practice practice, enter into any Material Contract, or amend in connection with a Sky Acquisition and not for speculative purposesany material respect or terminate any Material Contract or waive or grant any release or relinquishment of any material rights under, or renew, any Material Contract; provided that provided, that, except as set forth in Section 6.1(a)(xiv) of the Company shall consult with Parent prior to entering into hedging activities Disclosure Schedule, entry into, amendment in connection with Indebtedness any material respect, termination of, waiver or granting of the type any release or relinquishment of any material rights under, or renewal of, any Contract either (1) described in by any of clauses (B), (C), (D), (F), (G) or ), (H) above), (I), (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 or (L) purchase money indebtedness of the definition of “Material Contracts,” or (2) (x) with a term of 18 months or more, (y) that is not terminable by the Company or its Subsidiaries without fee or penalty upon 90 days’ or less prior notice and lease financing (z) that by its terms calls for aggregate payments by or to the Company or any of its Subsidiaries in excess of $1,500,000, shall require Parent approval in accordance with this Section 6.1(a) even if entered in the ordinary course of business consistent with past practice;
(vxv) enter into any Contract with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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) an Affiliate of the Company Disclosure Letter;
(vi) 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly wholly-owned Subsidiary of the Company; provided that) (an “Affiliate Contract”), for the avoidance of doubtor amend in any material respect or, granting customary profit participation rights except as contemplated by this Agreement, terminate any Affiliate Contract 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 waive or grant any release or relinquishment of any shares of capital stock or any securities convertible or exchangeable into or exercisable formaterial rights under, or any options, warrants or other rights to acquirerenew, any such shares for purposes of this Section 5.01(b)(viii)Affiliate Contract;
(ixxvi) with respect to spend the Retained Business, amounts in the Specified Reserve Account for any purpose other than capital expenditures made in accordance with Section 5.01(b)(vresolution of the Specified Matter; or
(xvii) and other than with respect to film and television production and programming or video game productionagree, which is subject to Section 5.01(b)(x), spend authorize or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 foregoing.
(b) Nothing contained in this Agreement gives, or is intended to give Parent, directly or indirectly, the agreement for such acquisition); provided that neither right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company nor any shall exercise, consistent with the terms and subject to the conditions of this Agreement, including this Section 6.1, complete control and supervision over the Company’s and its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinSubsidiaries’ operations.
Appears in 1 contract
Sources: Merger Agreement (Tropicana Las Vegas Hotel & Casino, Inc.)
Interim Operations. (aj) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time Closing (unless the Parent shall otherwise approve in writing, which approval determination by the Parent shall not be unreasonably withheld, conditioned or delayed, or as otherwise provided for by this Agreement) and except as (1) required by applicable LawLaws, (2) 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 disclosed in Section 5.01(a) business of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to consistent therewith, the Retained Business, subject to compliance with the specific matters set forth below, Company shall use commercially reasonable efforts to preserve the Retained BusinessCompany’s and each of its Subsidiaries’ organization respective business organizations intact and maintain the Retained Business’ their respective existing relations and goodwill with Governmental Entities, clients, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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’ their respective present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve in writingClosing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed set out in Section 5.01(b5.1(a) of the Company Disclosure Letter)Letter or as the Parent may approve in writing (any determination as to which by the Parent shall not be unreasonably delayed) or as otherwise provided for by this Agreement or as expressly required by applicable Laws, neither the Company shall not and shall not permit nor any of its Subsidiaries towill:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) adopt or propose any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described change in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)Organizational Documents;
(ii2) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses; provided, however, that the Company may amalgamate with 1619372 Ontario Inc., in which case references to the “Company” in this Agreement shall thereafter be references to the corporation resulting from such amalgamation;
(3) 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 $250,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(4) issue, sell, transfer, or otherwise dispose of or encumber (including through any pledge) any Equity Securities of the Company or any of its Subsidiaries;
(5) create or incur any material Lien on any of its assets, other than in the ordinary course of the business of the Company and its Subsidiaries;
(6) make any loans, advances or capital contributions to or investments in any Person (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 among the Company and its Subsidiaries or in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries ordinary course of the Company that would not prevent, materially delay or materially impair the Transactionstheir business);
(7) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Equity Securities;
(8) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any of its debt securities other than indebtedness for borrowed money incurred in the ordinary course of the business of the Company and its Subsidiaries consistent with past practices (A) not to exceed $500,000 in the aggregate or (B) guarantees incurred in compliance with this Section 5.1 by the Company of indebtedness of its wholly-owned Subsidiaries;
(9) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, except for Contracts (including engagement letters) for the provision of investment banking services in the ordinary course of the business;
(10) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(11) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts or claims or waive any rights having in each case a value in excess of $250,000;
(12) (A) make, change or rescind any Tax election, (B) change any annual Tax accounting period, or change any method of Tax accounting or file for any change in Tax accounting method, (C) file any Tax Return, except as is required to be filed by applicable Law, (D) waive or extend the statute of limitations in respect of material Taxes, (E) settle any material Tax claim or assessment or surrender any right to claim a material Tax refund or (F) settle or finally resolve any Tax contest with respect to any material amount of Tax;
(13) transfer, sell, lease, or otherwise dispose of any of its assets, or businesses, except for sales, transfers, leases, or other dispositions of assets (i) in the ordinary course of the business of the Company and its Subsidiaries, (ii) with a fair market value not in excess of $250,000 in the aggregate, (iii) pursuant to Contracts in effect prior to the date of this Agreement, or (iv) consisting of the cash distributions referred to in Section 5.1(a)(14) of the Company Disclosure Letter;
(14) except as expressly set forth in Section 5.1(a)(14) of the Company 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 Capital Stock (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its Capital Stock;
(15) except as required pursuant to existing written, binding agreements in effect as of the date of this Agreement and set forth in Section 5.1(a)(15) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any Company Plan as severance or termination payments or benefits to any of its directors, officers or employees other than pursuant to existing employment agreements in effect on as of the date hereof: of this Agreement and made available to the Parent or entered into following the date of this Agreement in the ordinary course consistent with the Company’s current form of employment agreement, provided that Parent be consulted prior to the entry into thereof, (Aii) change the methodology for determining compensation and bonus payments to directors, officers or employees other than in the ordinary course of business consistent with past practice, (iii) increase the pension, welfare, severance or other benefits of, or make any new equity awards to directors, officers or employees other than in the ordinary course of business consistent with past practice, (iv) establish, adopt, amend or terminate any material Company Plan of its benefit plans or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofequity awards, (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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Ev) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including of its benefit plans, to the extent not already provided in any equity-based awards)such benefit plans, (Fvi) change any actuarial or other material assumptions used to calculate funding obligations with respect to any Company Plan benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP or (Gvii) forgive any loans to any of its directors, officers or employees of the Company or any of its Subsidiariesemployees;
(iv16) incur exercise any Indebtedness or issue any warrants or Broker Warrants other rights to acquire any Indebtedness, except (A) than in the ordinary course of business consistent and following consultation with past practice in a principal amount not the Parent; provided, however, that with respect 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 all Broker Warrants granted by each issuer thereof to the Company and or its Subsidiaries, taken as a whole, than existing Indebtedness, (i) up to one-third of such Broker Warrants may be exercised at any time; (ii) up to one-third of such Broker Warrants may be exercised only after reasonable consultation with Parent; and (iii) up to one-third of such Broker Warrants may be exercised only with a maturity date no more than 10 years after the date Parent’s consent; provided further that (x) the portions of the Contract evidencing such Indebtedness, Broker Warrants subject to clauses (Bii) 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 and (iii) may be freely exercised by the Company and its Subsidiaries, taken as a whole, than without consultation or the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date consent of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) Parent to the extent not drawn upon and payments are not triggered therebythat the Broker Warrant would expire on or before January 31, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments 2008 and (2y) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course any portions 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 Broker Warrant that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 are exercised 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 shall be taken into account when determining whether the limitation set forth 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 clause (Gi) 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 practicehas been met;
(v17) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to settle any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses litigation or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with proceedings before a fair market value not Governmental Entity for an amount in excess of $50,000,000 250,000 individually if the transaction is not or $500,000 in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiariesaggregate;
(viii18) except with respect to SpinCo and take any action that would result in any of the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries conditions to the Company or to any other wholly owned Subsidiary of the CompanyArrangement set forth in Article VII not being satisfied; 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
(ix19) with respect to the Retained Business, 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 agree or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 1 contract
Sources: Arrangement Agreement (Thomas Weisel Partners Group, Inc.)
Interim Operations. (a) The Company Each of Linde and Praxair covenants and agrees as to itself and its Subsidiaries that, from and after the execution date hereof and until the earliest of the Effective Time, the termination of the Specified Covenants and the termination of this Agreement and prior in accordance with Article VIII, unless Praxair (in the case of any action proposed to be taken by Linde or any Subsidiary of Linde) or Linde (in the First Effective Time (unless Parent case of any action proposed to be taken by Praxair or any Subsidiary of Praxair) 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 required by applicable Law or, in the case of Praxair, except as otherwise set forth in Section 6.1 of the Praxair Disclosure Letter or, in the case of Linde, except as otherwise set forth in Section 6.1 of the Linde Disclosure Letter:
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course consistent with past practice;
(b) (i) it shall not issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries, except as otherwise permitted by Section 6.1(e)(i); (ii) it shall not amend its Organizational Documents, other than amendments to the Organizational Documents of Subsidiaries that are not material in the context of the transactions contemplated by this Agreement; (iii) it shall not split, combine or reclassify the outstanding shares of capital stock of Linde or Praxair, as applicable; (iv) it shall not declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any capital stock other than (x) dividends made in accordance with Section 6.1(b) of the Linde Disclosure Letter or Section 6.1(b) of the Praxair Disclosure Letter, (y) dividends payable by its direct or indirect wholly-owned Subsidiaries to it or another of its direct or indirectly wholly-owned Subsidiaries and (z) cash dividends paid by Subsidiaries in the ordinary and usual course of business consistent with past practice; and (v) it shall not repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any interests or shares of capital stock of Linde or Praxair, as applicable, or any securities convertible into or exchangeable or exercisable for any shares of such capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any (1) required by applicable Lawshares of, or (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution securities convertible into or as contemplated by the Final Step Plan) exchangeable or exercisable for, or (3) options, warrants, calls, commitments or rights of any kind to acquire, capital stock of any class, as appropriate, other than, in the case of this clause (A), (x) Praxair Shares or Linde Shares issuable pursuant to stock-based awards outstanding on or awarded prior to the date hereof under the Praxair Stock Plans or Linde LTIP that are issued in accordance with their terms and the applicable Praxair Stock Plan or Linde LTIP, as in effect on the date hereof; or (y) the issuance, sale or disposal of capital stock of a Subsidiary to such party or any of its other Subsidiaries or as otherwise expressly disclosed permitted by Section 6.1(e)(i), or (B) any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with its shareholders on any matter; (ii) increase, in Section 5.01(acomparison to March 31, 2017, the long-term indebtedness for borrowed money (including any guarantee of such indebtedness) of the Company Disclosure Letter)such party and its Subsidiaries, the Company shall, other than (A) transactions between it and shall cause each any of its Subsidiaries toor transactions between its Subsidiaries, use its reasonable best efforts to conduct the Retained Business (B) as a refinancing of existing indebtedness or (C) in the ordinary and usual course of business and consistent with past practice and in an amount not to exceed €1,500 million in the aggregate; or (iii) (A) make any capital expenditures in financial year 2017 or financial year 2018, or commit (in financial year 2017 or financial year 2018) to make in financial year 2018 capital expenditures, that, in the aggregate for financial year 2017 or financial year 2018, exceed by €400 million or more the capital expenditure target for such party for such financial year that has been provided to the other party prior to the date of this Agreement or such other capital expenditure targets as may be mutually agreed by Linde and Praxair or (B) commit to any capital expenditures to be made in any financial year after financial year 2018 that exceed €400 million for an individual project;
(d) except as required by any Benefit Plan as in effect on the date hereof, neither it nor any of its Subsidiaries shall (i) except in the ordinary and usual course of business, terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify any Benefit Plan, as the case may be, or any other arrangement that would be a Benefit Plan if in effect on the date hereof, in each case other than as would not reasonably be expected to materially increase the cost of benefits under any Benefit Plan or any other arrangement that would be a Benefit Plan if in effect on the date hereof, (ii) except in the ordinary and usual course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofsalary, (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 the compensationwage, bonus or pension, welfare other compensation of any employees or other fringe benefits of any director, officer or employee of the Company or any of its Subsidiaries, (iii) except in the ordinary and usual course of business consistent with past practice with respect to (1) employees below the 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 compensationpractice, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) 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 benefits under any Company Plan Benefit Plan;
(e) neither it nor any of its Subsidiaries shall (i) sell, pledge, encumber or otherwise dispose of (whether by way of merger, consolidation, sale of stock or assets, or otherwise) any assets, business units or capital stock of Subsidiaries, except for sales or dispositions of assets, business units or capital stock of Subsidiaries in transactions that individually (but aggregating related transactions) involve consideration of less than €200 million or (ii) acquire or agree to acquire (whether by merger, consolidation, purchase or otherwise) any Person or assets (x) in which the expected gross expenditures and commitments (including the amount of any equity-based awardsindebtedness assumed) for such acquisition individually (but aggregating related transactions) exceeds €500 million (provided that such threshold shall be €75 million in respect of any acquisition individually (but aggregating related transactions) of any asset not related to a line of business of such party or its Subsidiaries in existence as of the date hereof, or any Person whose primary business is not focused on any such line of business), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (Gy) forgive any loans that is reasonably likely, individually or in the aggregate, to directors, officers or employees materially delay the satisfaction of the Company conditions set forth in Article VII or prevent the satisfaction of such conditions, other than, in the case of each of clauses (i) and (ii), transactions between it and any of its Subsidiaries or transactions between its Subsidiaries;
(ivf) 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 usual 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or neither it nor any of its Subsidiaries with respect to shall settle or compromise any material claims or litigation if such Indebtedness settlement or compromise would involve the cash payment by such party or its Subsidiaries of (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations i) €50 million or more in respect thereof), of an individual settlement or compromise or (Gii) 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 €150 million or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced calculated on an aggregate basis in respect of all such settlements 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 practicecompromises;
(vg) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 it nor any of its Retained Subsidiaries shall enter into any such transaction “non-compete” or similar Contract that would, or would reasonably be expected to, prevent, materially delay or materially impair restrict the consummation business of the Transactions;New Holdco Group following the Effective Time; and
(xh) other than capital expenditures made neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing set forth in accordance with Section 5.01(b)(vSections 6.1(a) and other than purchases and licenses through (g) if it would be prohibited by the terms of film and television and production programming Sections 6.1(a) through (including) from doing the foregoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior to through the First Effective Time earlier of the End Date or the termination of this Agreement in accordance with its terms (unless Parent provided that the restriction set forth in clause (v) of this Section 7.1(a) shall terminate on the Determination Date), except as otherwise approve contemplated by this Agreement, required by Law or disclosed in writingSection 7.1 of the RGA Disclosure Schedule, without MetLife’s written consent (which approval consent shall not be unreasonably withheld, conditioned withheld or delayed, and except as (1) required by applicable Law, (2) expressly required by delayed if the Transaction Documents (including in connection action would not reasonably be expected to delay or impair the Transactions or the parties’ ability to comply with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Lettertheir obligations under this Agreement), the Company shallRGA shall not, and shall cause its Subsidiaries not to:
(i) (A) except in connection with any shareholder rights plan (other than a Section 382 Shareholder Rights Plan) so long as the consideration or adoption of any such other shareholder rights plan would not require the filing of a Current Report on Form 8-K or disclosure on the Form S-4 prior to the Determination Date to report consideration or adoption of such shareholder rights plan or (B) except in connection with a Section 382 Shareholder Rights Plan, amend or propose to amend its articles of incorporation or by-laws or equivalent organizational documents (other than the Amended and Restated RGA Articles of Incorporation and the Amended and Restated RGA Bylaws, in each case in accordance with the terms of this Agreement) in a manner that would adversely affect the rights of RGA Shareholders in any material respect or that would reasonably be expected to delay or impair the Transactions or the parties’ ability to comply with their obligations under this Agreement;
(ii) adopt a plan or agreement of complete or partial liquidation or dissolution, except that this clause (ii) of Section 7.1(a) shall not apply with regard to Subsidiaries of RGA that are not Significant Subsidiaries;
(iii) change the principal business of RGA and its Subsidiaries from the life reinsurance business to a different line of business;
(iv) enter into any line of business that is not reasonably related or complementary to the life reinsurance business;
(v) acquire, or enter into an agreement to acquire, any businesses, assets, product lines, business units, business operations, stock or other properties, including by way of merger or consolidation, where the total consideration paid, or to be paid, by RGA in such acquisition is in excess of $500 million; or
(vi) authorize any of, or commit to do or enter into any binding Contract with respect to any of, the foregoing actions in clauses (i) through (v) of this Section 7.1(a).
(b) From the date of this Agreement through the earlier of the End Date or the termination of this Agreement in accordance with its terms, except as otherwise contemplated by this Agreement, required by Law or disclosed in Section 7.1 of the RGA Disclosure Schedule, without MetLife’s written consent (which consent shall not be unreasonably withheld or delayed if the action would not reasonably be expected to delay or impair the Transactions or the parties’ ability to comply with their obligations under this Agreement), RGA shall not, and shall cause its Subsidiaries not to, do any of the following during the period in which the Offer is open, nor prior to the commencement of the Offer to the extent that such action (including the completion of an announced transaction) would require the filing of a Current Report on Form 8-K to report previously undisclosed information during the period in which the Offer is open (provided that these restrictions shall not apply to the completion of a transaction disclosed prior to the Commencement Date so long as such completion occurs after the Acceptance Time):
(i) except in connection with a Section 382 Shareholder Rights Plan, or, to the extent permitted by clause (i) of Section 7.1(a), any other shareholder rights plan, issue, sell or grant any shares of its Subsidiaries tocapital stock, use any other voting securities, or any other securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its reasonable best efforts capital stock, or any rights, warrants or options to conduct purchase any shares of its capital stock, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the Retained Business right to subscribe for, any shares of its capital stock; provided that RGA may (subject to RGA’s indemnification obligations under Section 8.2(d)): (A) issue or grant any options, rights, shares units or other awards, and issue shares of RGA Common Stock upon exercise, conversion or settlement of any options, rights, shares, units or other awards in the ordinary course of business or consistent with past practicepractice pursuant to employee, director or consultant stock or benefit plans or to agreements with employees, directors or consultants or as an inducement to employment; (B) issue shares pursuant to, or amend solely in order to modify the warrants so that the warrants are convertible into RGA Class A Common Stock following the Recapitalization, the Warrant Agreement between RGA and The Bank of New York Trust Company, N.A., as successor warrant agent to The Bank of New York, dated as of December 18, 2001; (C) issue shares pursuant to, or amend in order to make such modifications as are consistent with those made to the warrant agreement described in preceding clause (B), the Unit Agreement, dated as of December 18, 2001, among RGA, RGA Capital Trust I, a Delaware statutory trust (the “Trust”), acting as agent for the holders of the units from time to time, and The Bank of New York Trust Company, N.A., as successor unit agent to The Bank of New York, The Bank of New York Trust Company, N.A., as successor property trustee for the Company shallTrust to The Bank of New York and The Bank of New York (Delaware), as the Delaware trustee; and shall (D) enter into, or cause each of its Subsidiaries tosubsidiaries to enter into, solely one or more transactions to finance regulatory or operational requirements, including regulatory reserve collateral requirements, under Regulation XXX;
(ii) except in connection with a Section 382 Shareholder Rights Plan or to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required permitted by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
clause (i) except with respect to SpinCo and the SpinCo Subsidiaries (of Section 7.1(a), any other than in the case of clause (A))shareholder rights plan, (A) amend its certificate redeem, purchase or otherwise acquire any of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for stock, or any other securities thereof or any rights, warrants or options to acquire any such transaction by a wholly owned subsidiary shares or securities, except in connection with the exercise of the Company which remains a wholly owned Subsidiary after consummation of such transaction)any options, rights, shares, units or other awards pursuant to employee, director or consultant stock or benefit plans or to agreements with employees, directors or consultants or as an inducement to employment, (CB) declare, set aside for payment or pay any dividend on, or make any other distribution payable (whether in cash, stock or property (or any combination thereofother form) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)of, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than ordinary course quarterly cash dividends to RGA’s shareholders (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, including any increases 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 Agreementsuch quarterly dividends) or (2) purchases, repurchases, redemptions or other acquisitions of securities of dividends by any wholly owned Subsidiary of the Company by the Company RGA to RGA or any other wholly owned Subsidiary of the CompanyRGA);
, (iiC) merge adjust, split, combine, subdivide or consolidate with reclassify any other Personshares of its capital stock, or restructure(D) enter into any Contract, reorganize understanding or completely arrangement with respect to the sale, voting, registration or partially liquidate (repurchase of RGA Common Stock or the capital stock of any Subsidiary of RGA, other than transactions of the type contemplated by Section 5.01(b)(vii) employee, director or Section 5.01(b)(ix) which are not restricted thereby and other than mergers consultant stock or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with benefit plans or agreements or as 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 that would not prevent, materially delay or materially impair the Transactions)inducement to employment;
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend acquire or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights enter into an agreement to acquire any Indebtednessbusinesses, except (A) in the ordinary course assets, product lines, business units, business operations, stock or other properties, including by way of business consistent with past practice in a principal amount merger or consolidation, other than acquisitions that are not material 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 RGA and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date ;
(iv) enter into or discontinue any line of the Contract evidencing such Indebtedness, (B) except with respect business material 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 RGA 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;or
(v) authorize any of, or commit to do or enter into any binding Contract with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except the foregoing actions in clauses (Ai) for any 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, through (Biv) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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)(viii7.1(b);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 1 contract
Sources: Recapitalization and Distribution Agreement (Metlife Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior until the Effective Time, except (A) as otherwise expressly required or expressly contemplated by this Agreement, (B) as reasonably responsive to the First Effective Time a requirement of applicable Law or any Governmental Entity, (unless C) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 by-laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions or otherwise enter into any agreements or arrangements with similar effect on the Company’s or any of the type contemplated by Section 5.01(b)(vii) its Subsidiaries’ assets, operations 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) except as expressly required by acquire assets outside of the ordinary course of business from any Company Plan as other Person with a value or purchase price in the aggregate in excess of $10 million, other than acquisitions pursuant to Contracts in effect on as of the date hereof: of this Agreement;
(Aiv) establishissue, adoptsell, amend pledge, dispose of, grant, transfer, encumber, or terminate authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary and other than shares issuable in accordance with existing rights under the Stock Plans or the Convertible Subordinated Debentures), 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 on any material assets of the Company Plan or amend the terms any of its Subsidiaries;
(vi) make any outstanding equity-based awards loans, advances or capital contributions to or investments in any Person (other than the Company or any such action taken for purposes direct or indirect wholly owned Subsidiary of replacing, renewing or extending a broadly applicable material Company Plan the Company) other than advances to suppliers and loans to employees and prospective employees in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan practice;
(vii) declare, set aside, make or benefits provided under such Company Plan based on the cost on the date hereofpay any dividend or other distribution, (B) grant payable in cash, stock, property or provide any transaction or retention bonuses otherwise, with respect to any directorof its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, officersplit, employee 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;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (x) not to exceed $50 million in the aggregate or (y) in replacement of existing indebtedness for borrowed money, (B) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly owned Subsidiaries of the Company or (C) interest rate swaps in respect of newly incurred indebtedness on customary commercial terms consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Letter and consistent therewith in respect of the year ended December 31, 2006, make or commit to make any capital expenditure in excess of (A) $20 million in the aggregate during the year ended December 31, 2006 and (B) $20 million in the aggregate in respect of each of the first two calendar quarters in the year ended December 31, 2007;
(xi) enter into any Contract that would have been a Material Contract (other than under Section 5.1(j)(i)(D)) had it been entered into prior to this Agreement;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in GAAP or interpretations thereof;
(xiii) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $3 million individually (or $20 million in the aggregate) or any obligation or liability of the Company in excess of such amounts;
(xiv) amend or modify in any material respect or terminate any Material Contract, or cancel or modify in any material respect or waive any debts or claims held by it or waive any rights having in each case a value in excess of $3 million individually (or $20 million in the aggregate);
(xv) make any material Tax election, settle any Tax claim or change any method of Tax accounting in excess of $10 million individually (or $20 million in the aggregate);
(xvi) sell, suffer an Encumbrance, or lease any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with services provided or products sold in the ordinary course of business and sales of obsolete assets not constituting a product line or business and except for sales, leases, licenses or other dispositions of assets not constituting a product line or business with a fair market value not in excess of $30 million in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvii) 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, (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (B) increase the levels of compensation, bonus or pension, welfare welfare, severance or other benefits of 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 for increases in the ordinary course of business consistent with past practice with for employees who are not officers, (C) establish, adopt, amend in any material respect to (1) employees below or terminate any Benefit Plan or amend the level terms 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 changeany outstanding equity-based awards, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Benefit Plan, (FE) 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 determined, except as may be required by GAAP or applicable Law, or (GF) forgive any loans to directors, officers or or, other than in the ordinary course of business consistent with past practices, employees of the Company or any of its Subsidiaries;; or
(ivxviii) incur agree, authorize or commit to do any Indebtedness of the foregoing.
(b) Each of the Company and Parent shall designate an officer as its representative for purposes of consulting with the other, as reasonably requested by the Company or issue any warrants or other rights Parent, with respect to acquire any Indebtedness, except (A) in the ordinary course business 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, provided that any such consultation shall be conducted in accordance with any requirements of applicable Law.
(c) The Company agrees that from and with a maturity date no more than 10 years after the date hereof it shall cause its Subsidiaries to consult with representatives of the Contract evidencing such Indebtedness, (B) except Parent with respect to any negotiation of a new contract to replace 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 agreement set forth in on Section 5.01(b)(v5.1(o) of the Company Disclosure Letter;
(vi) with respect to the Retained BusinessLetter designated as expiring on December 31, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin2006.
Appears in 1 contract
Interim Operations. Between the Date of Execution and the Closing Date, Seller shall retain full authority and control of the operation of the Business and the Facilities. Except as Purchaser in its sole discretion otherwise approves, in advance, in writing, or as otherwise expressly required hereunder, Seller shall: (ai) The Company covenants operate the Business and agrees the Facilities in a manner consistent with all Applicable Laws and past practices (both operational and financial); (ii) maintain the Assets in good order and condition (normal wear and tear excepted) to the extent required to operate the Business and the Facilities consistent with past practices and in full compliance with Applicable Laws; (iii) comply with all Applicable Laws with respect to the Assets and the operation thereof, including, without limitation, all required regulatory standards of any Governmental Authorities with regulatory jurisdiction over the Business and the Facilities and all Third Party Payor Programs; (iv) timely pay all payments due on or before the Closing Date under, and otherwise maintain and comply with, all Provider Agreements, Contracts and all Residency Agreements, each without change except as expressly provided herein; (v) except as may be required by Applicable Law, not make any changes or modifications to itself any Provider Agreements, Contracts or Residency Agreements or incur any further obligations or surrender any rights thereunder, except that Seller may enter into new residency agreements with new Residents and its Subsidiaries that, from may renew existing Residency Agreements on substantially the same terms and after the execution of this Agreement and conditions as other Residency Agreements in effect prior to the First Effective Time Date of Execution for the same Facility and otherwise consistent with the specimen residency agreement attached hereto on Schedule 2.7(b), provided in no event shall such new residency agreements provide for any “move in” specials or free rent, fix rental amounts for more than sixty (60) days, provide for a single payment for lifetime services, or be at rates that are lower than the rates reflected in Schedule 4.1(a)(v); (vi) not enter into any contracts, agreements or leases (or any amendment of any of them) which would have had to be disclosed on any schedule hereto had such contracts, agreements or leases been entered into prior to the Date of Execution, unless Parent shall otherwise approve such contract, agreement or lease (or amendment thereof) has been approved in writingadvance in writing by Purchaser, which such approval shall not to be unreasonably withheld, conditioned or delayed, ; (vii) keep in full force and except effect (and renew as applicable) present insurance policies and Licenses through the Closing Date; (1viii) required by applicable Law, (2) expressly required by the Transaction Documents (including maintain in connection with the Separation good standing all Licenses and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve maintain (and not terminate) all goodwill of Residents, parties to all Contracts and vendors; (ix) not allow the Retained Business’ organization intact number of Residents at any Facility to exceed the licensed capacity for such Facility; (x) except for any bonuses which Seller may in its discretion propose to pay at its sole cost and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, expense to certain management employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) transaction contemplated by this Agreement, not cause or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except the following with respect to SpinCo and the SpinCo Subsidiaries (any Employees: any new bonus, percentage compensation, service award or other than like benefit, or any increase in the case of clause (A)), (A) amend its certificate of incorporation compensation payable or bylaws (or comparable governing documents) (other than amendments to the governing documents of become payable by Seller to any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (Employees; or any combination thereof) change in respect the method of calculating any shares of its capital stock (except for (1) any dividends presently existing bonus, percentage compensation, service award or distributions paid by a direct other like benefit, granted, made or indirect wholly owned Subsidiary of the Company accrued to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) credit of any of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stockEmployees, or (E) purchaseany increase in any Employee welfare, repurchaseinsurance, redeem pension, retirement or otherwise acquire any shares of its capital stock similar payment or any securities convertible arrangement made or exchangeable into or exercisable for any shares of its capital stock (other than (1) agreed to pursuant to the forfeiture ofexisting welfare, pension and retirement Employee Benefit Plans and arrangements, deferred compensation, 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 other Employee Benefit Plans; 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iiixi) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishpermitted hereunder, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under that would cause any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company changes, events or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 conditions described 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin2.21.
Appears in 1 contract
Sources: Asset Purchase Agreement (Griffin-American Healthcare REIT III, Inc.)
Interim Operations. (a) The Company covenants L3 and agrees ▇▇▇▇▇▇ each covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent L3 or ▇▇▇▇▇▇, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Law or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a8.1(a) of the Company such Party’s Disclosure Letter), the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in all material respects in the Ordinary Course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees Employees and business 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 its and its Subsidiaries’ present employees officers, Employees and agents.
(b) , except as otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless Parent shall otherwise approve i) expressly contemplated by this Agreement, (ii) required by a Governmental Entity or applicable Law or the terms of any Material Contract or Benefit Plan existing as of the date of this Agreement, (iii) as approved in writing, writing by the other Party (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3iv) otherwise expressly disclosed set forth in Section 5.01(b8.1(a) of the Company such Party’s -37- 052054-0169-16505-Active.27978848.6 SC1:4755315.9 Disclosure Letter), the Company each Party, on its own account, shall not and shall cause its Subsidiaries not permit to: (i) make or propose any change to such Party’s Organizational Documents or, except for amendments that would not materially restrict the operations of such Party’s businesses, the Organizational Documents of any of such Party’s Subsidiaries; (ii) other than in the Ordinary Course, except for any such transactions among its wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries to:
with any other Person, or (iB) except restructure, reorganize or completely or partially liquidate; (iii) acquire assets outside of the Ordinary Course from any other Person (A) with a fair market value or purchase price in excess of $200 million in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), 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 L3 or ▇▇▇▇▇▇, as applicable, to consummate the Transactions, in each case, other than acquisitions of inventory or other goods in the Ordinary Course; (iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case issuance of clause (A)), shares (A) amend by its certificate wholly owned Subsidiary to it or another of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)its wholly owned Subsidiaries, (B) splitin respect of equity-based awards outstanding as of the date of this Agreement, combineor (C) granted in accordance with Section 8.1(a)(xviii), subdivide the ESPP or reclassify its outstanding each Party’s 401(k) Plans, 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; (except for v) create or incur any Encumbrance (other than any Permitted Encumbrances) over any material portion of such transaction by a Party’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the Ordinary Course on any of its assets or any of its Subsidiaries; (vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from L3 and any of its wholly owned subsidiary Subsidiaries or to or from ▇▇▇▇▇▇ and any of the Company which remains a its wholly owned Subsidiary after consummation Subsidiaries, as applicable, or in accordance with Section 8.1(a)(xviii)) in excess of such transaction), $50 million in the aggregate; (Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary Subsidiary); provided, that (A)(1) ▇▇▇▇▇▇ may make, declare and pay one -38- 052054-0169-16505-Active.27978848.6 SC1:4755315.9 regular quarterly cash dividend in each quarter of the Company or to year ending June 28, 2019 in an amount per share of $0.685 per quarter with a record date consistent with the Company or record date for each quarterly period of the year ended June 29, 2018 and (2) normal semiannual from and after July 1, 2019, ▇▇▇▇▇▇ may make, declare and pay one regular quarterly cash dividends on the Common Stock as described dividend in Section 5.01(b)(i) each quarter of the Company Disclosure Letteryear ending June 30, 2020 in an amount per share up to $0.055 higher than the dividend paid for the same quarterly period of the year ended June 28, 2019 and with a record date consistent with the record date for each quarterly period of the year ended June 28, 2019, if, in the case of clauses (1) and (2), ▇▇▇▇▇▇ provides L3 with written notice of each record date it will select at least twenty (D20) enter into any agreement with respect Business Days prior to the voting declaration date in respect of its capital stocksuch applicable record date and (B)(1) L3 may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2018 in an amount per share of $0.80 per quarter and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2017 and (2) from and after January 1, 2019, L3 may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2019 in an amount per share up to $0.05 higher than the dividend paid for the same quarterly period of the year ended December 31, 2018 and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2018, if, in the case of clauses (1) and (2), L3 provides ▇▇▇▇▇▇ 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, in each case, solely to the extent such payment is coordinated pursuant to, and permitted by, Section 8.17; (viii) reclassify, split, combine, subdivide or redeem, purchase (Ethrough such Party’s share repurchase program or otherwise) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toto (A) the capital stock or other equity interests of a wholly owned Subsidiary of L3 or ▇▇▇▇▇▇, Company Restricted Stock Units, Company Deferred Stock Units as applicable; (B) net withholding upon the exercise or Company Performance Stock Units, in each case settlement of equity-based awards outstanding as of the date of this Agreement or granted in accordance with past practice Section 8.1(a)(xviii) in the Ordinary Course and in accordance with their terms and, as applicable, the terms of the Company Stock Plans plan documents as in effect on the date of this Agreement Agreement; or (or as modified after C) such Party’s matching contributions to its 401(k) Plans in the date form of this Agreement capital stock in the Ordinary Course and in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan plan documents as in effect on the date hereof: of this Agreement; (ix) except to the extent expressly provided by, and consistent with, Section 8.1(a)(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) establish, adopt, amend or terminate any to the extent reasonably necessary to avoid a material Company Plan or amend the terms business interruption as a result of any outstanding equity-based awards act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or IT Assets, or any other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in similar cause not reasonably within the ordinary course of business consistent with past practice that does not materially increase the cost control of such Company Plan Party or benefits provided under such Company Plan based on the cost on the date hereofits Subsidiaries, (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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 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 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 material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not 50 million in the ordinary course or $100,000,000 individually aggregate during any consecutive twelve (12) month period (other than capital expenditures within the thresholds set forth in any event or (BSection 8.1(a)(ix) 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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 PlansParty’s Disclosure Letter), (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries expenditures that such Party reasonably determines are necessary to maintain the Company safety and integrity of any asset or property in response to any unanticipated and subsequently discovered events, occurrences or developments (provided that L3 or ▇▇▇▇▇▇, as applicable, will use its reasonable best efforts to consult with the other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights Party prior to making or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not agreeing 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);
(ix) with respect to the Retained Business, 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 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 acquisitionexpenditure); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin-39- 052054-0169-16505-Active.27978848.6 SC1:4755315.9
Appears in 1 contract
Sources: Merger Agreement (Harris Corp /De/)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First earlier to occur of the termination of this Agreement or the Effective Time (unless Parent shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed), and except as (1) required by applicable Law, (2) otherwise expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by this Agreement or the Final Step Plan) Transactions or (3) otherwise expressly disclosed except as set forth in Section 5.01(a) 6.1 of the Company Disclosure Letter)) and except as required by applicable Laws, the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, the Company shalland its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations intact, maintain in all material respects their respective existing relations with customers, suppliers, distributors, creditors, lessors, and others having material business dealings with the Company and its Subsidiaries and keep available the services of its and its Subsidiaries’ present executive officers and key employees. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier to occur of the termination of this Agreement or the Effective Time, except (A) as otherwise expressly contemplated by this Agreement or the Transactions, (B) as Parent may approve in writing (which approval shall cause each not be unreasonably withheld), (C) as set forth in Section 6.1 of the Company Disclosure Letter or (D) as required by applicable Laws, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or bylaws or other applicable governing instruments;
(ii) merge, consolidate, restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries towith any other Person, use except for any such transactions among wholly owned Subsidiaries of the Company, or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its reasonable best efforts assets, operations or businesses;
(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 $500,000 in any transaction or series of related transactions, other than acquisitions pursuant to conduct Material Contracts in effect as of the Retained Business date of this Agreement or pursuant to Section 6.1(a)(x) below;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned 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 (A) upon the exercise of Company Options or warrants or rights to purchase Shares that are outstanding on the date of this Agreement or (B) the grant of any restricted shares and Company Options (and issuances of Shares pursuant thereto) in the ordinary course of business consistent with past practicepractices pursuant to offer letters outstanding as of the date hereof;
(v) other than in the ordinary course of business consistent with past practices, and create or incur any Lien material to the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:on any assets of the Company or any of its Subsidiaries having a value in excess of $2 million;
(ivi) except with respect make any loans, advances, guarantees or capital contributions to SpinCo and the SpinCo Subsidiaries or investments in any Person (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $2 million in the aggregate;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to the Company any other direct or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) indirect wholly owned Subsidiary or enter into any agreement with respect to the voting of its capital stock);
(viii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture ofstock, or withholding except upon exercise of Taxes with respect to, any 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 Options outstanding as of the Company Stock Plans as in effect on date hereof or redemptions under the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Rights Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(iiix) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan capital leases incurred in the ordinary course of business consistent with past practice practices, incur (which shall not include entering into credit agreements, lines of credit or similar arrangements until the Company or its Subsidiaries becomes liable with respect to any indebtedness for borrowed money or guarantees thereof) any indebtedness for borrowed money 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 indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (which, for the avoidance of doubt, shall include borrowings under the Company’s existing credit agreements and overnight borrowings) that does shall (A) not materially increase exceed $200 million in the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofaggregate outstanding at any time, (B) be at short-term interest rates of one month or less and (C) be on terms that allow for prepayment without penalty;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $2 million in the aggregate during any 12-month period;
(xi) 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 accounting policies or procedures, except as required to conform to changes in statutory or regulatory accounting rules or GAAP;
(xiii) settle any litigation or other proceedings for an amount in excess of $1,000,000 (net of insurance coverage) or any obligation or liability of the Company in excess of such amount;
(xiv) amend or modify in any material respect or terminate any Material Contract, or cancel, modify in any material respect or waive any debts or claims held by it or waive any rights having in each case a value in excess of $1,000,000;
(xv) make any material Tax election, change an annual accounting period, file any amended Tax Return, enter into any closing agreement, waive or extend any statute of limitation with respect to Taxes, settle or compromise any Tax liability, claim or assessment, or surrender any right to claim a refund of Taxes;
(xvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses (other than licenses to customers that lapse or expire in accordance with their terms), operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except (A) in connection with the sale of Company products and services provided in the ordinary course of business, (B) sales of obsolete assets or (C) sales, leases, licenses or other dispositions of assets not included in clauses (A) or (B) above with a fair market value not in excess of $2 million in the aggregate;
(xvii) except as required pursuant to existing written, binding agreements, policies or benefit plans in effect prior to the date of this Agreement and set forth in Section 5.1(i)(i) or Section 5.1(i)(viii) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any transaction severance or retention bonuses termination payments or benefits to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, except in the case of employees who are not officers, in the ordinary course of business consistent with past practices, (Cii) increase the compensation, bonus or pension, welfare welfare, severance or other benefits of of, pay any directorbonus to, officer or employee of the Company or make any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable new equity awards to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, except for increases in base salary for employees earning less than $100,000 annually in the ordinary course of business consistent with past practices, (Eiii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Benefit Plan, (Fv) 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 determined, except as may be required by GAAP or (Gvi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(ivxviii) incur knowingly take any Indebtedness action or issue omit to take any warrants or other rights action that is reasonably likely to acquire result in any Indebtedness, except (A) in of 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 conditions to the Company and its SubsidiariesOffer set forth in Exhibit 1 not being satisfied or the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date authorize or commit to do any of the Contract evidencing such Indebtedness, foregoing.
(Bb) except with respect Prior to the Bridge Facility, in replacement of, making any written or material oral communications to refinance, existing Indebtedness on then prevailing market terms officers 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations 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 respect a copy of the intended communication, Parent shall have a reasonable period of time to such Indebtedness (review and comment on the communication, and Parent and its 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 reasonably cooperate in providing any such mutually agreeable communication.
(c) Parent prior shall not knowingly take or permit any of its Subsidiaries to incurring Indebtedness under this clause take any action that is reasonably likely to (G), (Hi) Indebtedness assumed result 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 any of the conditions 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 Offer set forth in Section 5.01(b)(v) of Exhibit 1 not being satisfied or the Company Disclosure Letter;
(vi) with respect conditions to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall Merger set forth in Article VII not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event being satisfied or (Bii) 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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair prevent the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 1 contract
Sources: Merger Agreement (Genlyte Group Inc)
Interim Operations. 6.1.1 PSI shall, and PSI shall cause Phoenix to: (a) The Company covenants carry on its business only in the Ordinary Course of Business substantially the same manner as heretofore conducted; (b) except as they may expire or be terminated by any other party thereto, keep in full force and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayedeffect, and except as (1) required by applicable Law, (2) 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 disclosed in Section 5.01(a) not cause a default of the Company Disclosure Letter), the Company shall, and shall cause each any of its Subsidiaries toobligations under, use its reasonable best efforts to conduct any PSI Commitments; (c) keep in full force and effect the Retained Business insurance coverage in effect on the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely date hereof to the extent related that such insurance continues to the Retained Businessbe reasonably available; (d) maintain, subject to compliance with the specific matters set forth belowrenew, keep in full force and effect and preserve its business organization and material rights and Licenses and use commercially reasonable efforts to preserve the Retained Business’ organization intact (i) retain its present employee force and (ii) maintain its existing, or substantially equivalent, relationships with others having business relations with it and to use commercially reasonable efforts to maintain the Retained Business’ existing relations continuance of its general customer and goodwill supplier relationships; and (e) duly comply with Governmental Entitiesall Laws applicable to it and to the conduct of its business, customersexcept where the failure to so comply would not, suppliersindividually or in the aggregate, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings have a PSI Material Adverse Effect.
6.1.2 Except with the Retained Business (including material content providersprior written consent of IVAX or as otherwise required or permitted by this Agreement or as contemplated by Schedule 6.1, studiosPSI shall not, authorsand PSI shall cause Phoenix to not, producersdirectly or indirectly, directors, actors, performers, guilds, announcers and advertisers) and keep available the services do any of the Company and its Subsidiaries’ present employees and agents.
following: (ba) Without limiting the generality ofvoluntarily or involuntarily sell, and in furtherance oftransfer, the foregoingsurrender, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date abandon or dispose of this Agreement and prior to the First 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 Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
properties, assets or rights (itangible or intangible) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case Ordinary Course of clause Business or disclose any material proprietary or confidential information to any third party not a party to a written confidentiality agreement with or otherwise under an obligation of confidentiality to PSI or Phoenix; (A)b) make any mortgage or pledge or subject itself or its properties or assets to any Lien, except for the Lien of current Taxes or assessments not yet delinquent, Liens and deposits (including mechanics’, materialmen’s and other similar Liens) arising in the Ordinary Course of Business securing amounts not yet due and payable; (c) enter into or materially amend any Contract except in the Ordinary Course of Business; (d) grant any increase in the compensation payable or to become payable to officers or employees (including, without limitation, any such increase pursuant to any bonus, pension, profit-sharing plan or other PSI Plan or commitment), except in the Ordinary Course of Business or pursuant to the provisions of existing obligations; (Ae) incur, assume or take any property subject to any liability, except in the Ordinary Course of Business; (f) alter the manner of keeping its books, accounts or records, or change in any manner the accounting practices therein reflected, other than alterations or changes required by GAAP or applicable Law; (g) dispose of or permit a lapse (to the extent that such lapse is reasonably preventable) of any rights to any material intangible personal property, including, without limitation, Intellectual Property, other than in the Ordinary Course of Business; (h) amend its certificate Certificate of incorporation Incorporation or bylaws Bylaws; (i) expend or comparable governing documentscommit to expend funds for capital additions in excess of fifty thousand dollars ($50,000) that is not reflected in either the 2004 or 2005 Capital Additions Budgets previously made available to IVAX or its representatives; (other than amendments to j) adopt or amend any PSI Plan; (k) cancel, waive or release any debts, rights or claims, except in the governing documents Ordinary Course of Business, but in no event in excess of two hundred fifty thousand dollars ($250,000); (l) write off the value of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (inventory or any combination thereof) accounts receivable or increase the reserves for obsolete, damaged, spoiled or otherwise not useable inventory or uncollectible receivables, except in respect of any shares of its capital stock accordance with GAAP; (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (Dm) enter into any agreement indemnification, severance, employment or consulting Contract with respect to any Person who is not a current officer, employee or consultant of PSI or Phoenix other than in the voting Ordinary Course of its capital stockBusiness, or (E) purchaseenter into any indemnification, repurchaseseverance, redeem employment or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate consulting Contract with any other Personcurrent officer, employee or restructure, reorganize consultant of PSI or completely or partially liquidate Phoenix; (n) enter into any transaction with an Affiliate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which with customers and suppliers who are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its 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 Affiliates entered into in the ordinary course 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 Business for goods 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 services 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 at prices customary 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;
(v) with respect to the Retained Business, other than 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 (including sports rights) arm’s-length transactions with third parties for such goods and services); (o) issue, sell or video game productionauthorize for issuance or sale, which is subject to Section 5.01(b)(x)shares of any class or series of its securities (including, make without limitation, by way of stock split or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000dividend) or any subscriptions, options, warrants, rights or convertible securities or enter into any agreements or commitments of any character obligating it to issue or sell any such securities; (Bp) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017redeem, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon purchase or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses acquire, directly or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 ofindirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable foroption, or any options, warrants warrant or other rights right to acquire, purchase or acquire any such shares; (q) declare or pay any dividend or other distribution (whether in cash, except stock or other property) with respect to its capital stock (Aother than the quarterly dividend on the PSI ▇▇ ▇▇▇▇ A Preferred Stock and the PSI Series B Preferred Stock that shall continue to accrue in accordance with the terms of PSI’s Certificate of Incorporation but shall not be paid in cash); (r) for any Shares issued pursuant to Company Restricted Stock Unitsother than in the Ordinary Course of Business, Company Performance Stock Units and Company Deferred Stock Units outstanding enter into a new Contract, which if in existence on the date of this Agreement would have been at forth on Schedule 3.28.1 as a PSI Commitment, or amend, terminate or elect not to renew any PSI Commitment; (s) except as permitted by this Section 6.1.2, take or omit to take any action which would render any of PSI’s or Phoenix’s representations or warranties materially untrue or misleading, which would be a material breach or violation of any of PSI’s or Phoenix’s covenants or which would render the satisfaction of any condition to the Closing impossible; (t) take any action which results or could reasonably be expected to result in accordance a PSI Material Adverse Effect; or (u) agree, whether in writing or otherwise, to do any of the foregoing. In addition, neither PSI nor Phoenix shall incur or pay expenses for professional services performed prior to the Closing in connection with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) transactions contemplated by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 spend Agreement in excess of (A) an aggregate of $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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin575,000.
Appears in 1 contract
Sources: Stock Purchase Agreement
Interim Operations. (ai) The Company West shall not knowingly take or permit any of its Subsidiaries to take any action or refrain from taking any action the result of which would be reasonably expected to result in any of the closing conditions set forth in Sections 5.1 and 5.3 hereof not to be satisfied. West covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (Time, unless Parent East shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and except as (1) otherwise expressly contemplated by this Agreement or as required by applicable LawLaws, (2) expressly required by its business and that of its Subsidiaries shall be conducted in the Transaction Documents (including in connection with ordinary and usual course and, to the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)extent consistent therewith, the Company it shall, and shall cause each of its Subsidiaries to, use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 present employees and agents of West and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents this Agreement or applicable Laws, (including B) as East may approve in connection with the Separation and the Distributionwriting (such approval not to be unreasonably withheld or delayed) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b4.1(i) of the Company West Disclosure Letter), the Company shall West will not and shall will not permit any of its Subsidiaries to:
(ia) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws by-laws or other applicable governing instruments or amend any term of the Shares;
(b) merge or comparable governing documentsconsolidate West or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of West that are not obligors or guarantors of third-party indebtedness, or adopt a plan of liquidation;
(c) (acquire assets outside of the ordinary course of business with a value or purchase price in excess of $10,000,000 in the aggregate, other than amendments acquisitions pursuant to Contracts to the governing documents extent in effect immediately prior to the execution of any Subsidiary this Agreement and as otherwise set forth in Section 4.1(i)(c) of the Company that would not preventWest Disclosure Letter, delay and other than capital expenditures within West's capital expenditure budget as set forth in Section 4.1(i)(j) of the West Disclosure Letter;
(d) other than as set forth in Section 4.1(i)(d) of the West Disclosure Letter and other than the issuance of shares or impair options pursuant to West Stock Plans, West Awards, West Warrants or West Convertible Debt, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the Initial Merger issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or the other Transactions)encumbrance of, (B) split, combine, subdivide or reclassify its outstanding any shares of capital stock of West or any its Subsidiaries (except for any such transaction other than the issuance of shares by a wholly owned subsidiary Subsidiary of West to West or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(e) other than (A) specified encumbrances described in Section 4.1(i)(e) of the Company West Disclosure Letter; (B) encumbrances for current Taxes or other governmental charges not yet due and payable; (C) mechanics', carriers', workmen's, repairmen's or other like encumbrances arising or incurred in the ordinary course of business consistent with past practice relating to obligations as to which remains there is no default on the part of West, or the validity or amount of which is being contested in good faith by appropriate proceedings; and (D) other encumbrances that do not, individually or in the aggregate, materially impair the continued use, operation, value or marketability of any West Aircraft, West Slots, West Gates or West Real Property or the conduct of the business of West and its Subsidiaries as presently conducted; create or incur any Lien material to West or any of its Subsidiaries on any assets of West or any of its Subsidiaries having a wholly value in excess of $10,000,000;
(f) other than as set forth in Section 4.1(i)(f) of the West Disclosure Letter, make any loans, advances or capital contributions to or investments in any Person (other than West or any direct or indirect wholly-owned Subsidiary after consummation of such transaction), West) in excess of $10,000,000 in the aggregate;
(Cg) declare, set aside or pay any dividend or distribution payable (whether in cash, stock or property (or any combination thereof) in respect of on (i) any Shares or West Preferred Shares, or (ii) any shares of its capital stock of any Subsidiary (except for other than wholly-owned Subsidiaries and pro rata dividends payable to holders of interests in non wholly-owned Subsidiaries);
(1h) any dividends reclassify, split, combine, subdivide or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock;
(i) other than (1as set forth on Section 4.1(i)(i) pursuant to of the forfeiture ofWest Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or withholding issue or sell any debt securities or warrants or other rights to acquire any debt security of Taxes with respect toWest or any of its Subsidiaries, Company Restricted Stock Unitsexcept for (i) indebtedness for borrowed money incurred in the ordinary course of business not to exceed $10,000,000 in the aggregate, Company Deferred Stock Units (ii) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on customary commercial terms, (iii) guarantees by West of indebtedness of wholly-owned Subsidiaries of West or Company Performance Stock Unitsguarantees by Subsidiaries of indebtedness of West, in each case in accordance or (iv) interest rate swaps on customary commercial terms consistent with past practice and with not to exceed $10,000,000 of notional debt in the terms aggregate in addition to notional debt currently under swap or similar arrangements;
(j) except as set forth in Section 4.1(i)(j) of the Company Stock Plans as West Disclosure Letter, make or authorize any capital expenditure;
(k) other than in effect on the ordinary course of business, enter into any Contract that would have been a West Material Contract had it been entered into prior to the date of this Agreement (other than as permitted by Section 4.1(i)(d), (e), (i) or (j));
(l) make any changes with respect to accounting policies or procedures, except as modified required by changes in GAAP or by applicable Law or except as West, after consultation with East and each party's independent auditors, determines in good faith is preferable;
(m) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity for an amount to be paid by West or any of its Subsidiaries in excess of $10,000,000 or which would be reasonably likely to have a material adverse impact on the operations of West or any of its Subsidiaries;
(n) other than in the ordinary course of business, (i) amend or modify in any material respect, or terminate or waive any material right or benefit under, any West Material Contract, or (ii) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $10,000,000;
(o) except as required by Law or by any currently effective tax sharing agreement listed in Section 4.1(i)(o) of the West Disclosure Letter, 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 method therefor that is inconsistent with elections made, positions taken or methods used in accordance with preparing or filing similar Tax Returns in prior periods.
(p) sell, lease, license, leaseback, abandon, or otherwise dispose of any assets of West or its Subsidiaries except (i) in the terms ordinary course of this Agreement) business or obsolete assets or (2ii) purchasessales, repurchasesleases, redemptions licenses, leasebacks, abandonments or other acquisitions dispositions of securities assets with a fair market value not in excess of $10,000,000 in respect of any wholly owned Subsidiary one asset and not in excess of $15,000,000 in the aggregate other than (x) as set forth in Section 4.1(i)(p) of the Company by West Disclosure Letter and (y) any dispositions of assets to the Company or any other wholly owned Subsidiary of the Companyextent used as consideration for acquisitions that are permitted pursuant to Section 4.1(i)(c);
(iiq) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity except in connection with an acquisition the replacement of any existing employee, including any officer, on compensation terms that are not otherwise prohibited by materially different from those of the replaced employee or officer, or except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement and other than mergers amongthat have been provided to East, or the restructuringexcept as West, reorganization or liquidation ofbased upon advice of its counsel, any wholly owned Subsidiaries determines in good faith is preferable for purposes of compliance with Section 409A of the Company that would not preventCode, materially delay or materially impair as otherwise required by applicable Law, (i) except with respect to any newly-hired employees (excluding officers), enter into any commitment to provide any severance or termination benefits to (or amend any existing arrangement with) any director, officer or employee of West or any of its Subsidiaries, (ii) increase the Transactions);
benefits payable under any existing severance or termination benefit policy or employment agreement, (iii) except as expressly required by with respect to any Company Plan as newly-hired employees (excluding officers), enter into any employment severance, change in effect on the date hereof: control, termination, deferred compensation or other similar agreement (Aor amend any such existing agreement) with any director, officer or employee of West or any of its Subsidiaries, (iv) establish, adopt, amend or terminate any material Company West Compensation and Benefit Plan, (v) increase the compensation, bonus or other benefits of, make any new awards under any West Compensation and Benefit Plan to, or amend the terms pay any bonus to any director, officer, employee, consultant or independent contractor of West or any outstanding equity-based of its Subsidiaries, except for increases, new awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan payments in the ordinary course of business consistent with past practice that does for employees who are not materially increase among West's Section 16 Officers, (vi) take any action to fund or in any other way secure the cost payment of such Company Plan compensation or benefits provided under such Company Plan based on any West Compensation and Benefit Plan, except as required pursuant to the cost on the date hereofterms thereof, (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 the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Evii) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Plan (including West Compensation and Benefit Plans, to the extent not already required in any equity-based awards)such West Compensation and Benefit Plan, (Fviii) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company West Compensation and Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP, (ix) amend the terms of any outstanding equity-based award, (x) provide for accelerated vesting, removal of restrictions or exercisability of any stock based or stock related awards (including stock options, stock appreciation rights, performance units and restricted stock units) upon a change in control occurring on or prior to the Effective Time, or (Gxi) forgive enter into any loans new collective bargaining agreements (or material amendments to directors, officers or employees of the Company or any of its Subsidiariesexisting collective bargaining agreements);
(ivr) incur decrease or defer in any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in material respect the ordinary course level 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 training provided 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 employees 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company West or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following or the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and level 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 costs expended in connection with a Sky Acquisition therewith;
(s) fail to keep in effect any governmental route authority in effect 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) used by any amendment, refinancing or renewal Subsidiary 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 West 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; Agreement, provided that the Company restrictions set forth in this Section 4.1(i)(s) shall consult with Parent prior not apply 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 any such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing failure if such failure occurs in the ordinary course of business consistent with past practice;
(vt) with respect to the Retained Businessmake any material West Route changes, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) changes in the ordinary course of business consistent with past practice and practice;
(u) fail to maintain insurance at levels at least comparable to current levels or otherwise in a manner inconsistent with past practice;
(v) take any action, or fail to take action, which action or failure could result in the loss of West Slots with an aggregate not value in excess of 120% $10,000,000;
(w) fail to notify East in writing of any incidents or accidents occurring on or after the date hereof involving any property owned or operated by West that resulted or could reasonably be expected to result in damages or losses in excess of $10,000,000;
(x) fail to continue, in respect of all West Aircraft, all material maintenance programs consistent with past practice (except as required or permitted by applicable Law), including using reasonable best efforts to keep all such West Aircraft in such condition as may be necessary to enable to airworthiness certification of such West Aircraft under the Federal Aviation Act to be maintained in good standing at all times;
(y) agree or commit to do any of the amounts reflected foregoing.
(ii) East shall not knowingly take or permit any of its Subsidiaries to take any action or refrain from taking any action the result of which would be reasonably expected to result in any of the closing conditions set forth in Sections 5.1 and 5.2 not to be satisfied. East covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time, unless West shall otherwise approve in writing (such approval not to be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement or as required by applicable Laws, its business and that of its Subsidiaries shall be conducted in the Company’s capital expenditure budget for each ordinary and usual course and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries to, use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of 2017the present employees and agents of East and its Subsidiaries. Without limiting the generality of the foregoing and in furtherance thereof, 2018 and 2019 from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement or applicable Laws, (B) as West may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 5.01(b)(v4.1(ii) of the Company East Disclosure Letter, East will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments or amend any term of the East Common Stock;
(b) merge or consolidate East or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of East that are not obligors or guarantors of third-party indebtedness, or adopt a plan of liquidation;
(c) acquire assets outside of the ordinary course of business with a value or purchase price in excess of $10,000,000 in the aggregate, other than acquisitions pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement and as otherwise set forth in Section 4.1(ii)(c) of the East Disclosure Letter, and other than capital expenditures within East's capital expenditure budget as set forth in Section 4.1(ii)(j) of the East Disclosure Letter;
(vid) with respect other than as set forth in Section 4.1(ii)(d) of the East Disclosure Letter and other than the issuance of shares or options pursuant to the Retained Businessstock-based benefit plans and under individual employment agreements to which East is a party, issue, sell, pledge, dispose of, grant, transfer, lease, license, sellguarantee, assignencumber, let lapseor authorize the issuance, abandon, cancel, mortgagesale, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game productiondisposition, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Businessgrant, 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 guarantee or encumbrance of, any shares of its capital stock of East or any its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of East to East or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable forfor any shares of such capital stock, or any options, warrants or other rights to acquirewarrants, any such sharesconversion rights, except (A) for any Shares issued pursuant to Company Restricted Stock Unitsstock appreciation rights, 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinredemptio
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) this Agreement or (3) otherwise expressly disclosed in Section 5.01(a6.1(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct its business and the Retained Business business of its Subsidiaries in the ordinary course of business consistent with past practice, practice and each of the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessshall, subject to compliance with the specific matters set forth below, use commercially reasonable best efforts to preserve the Retained Business’ its business organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business it (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, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time Time, except (unless A) as required by applicable Law, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law), (2C) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise as expressly disclosed in Section 5.01(b6.1(a) of the Company Disclosure Letter)Letter or (D) as expressly provided for in this Agreement, the Company shall not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any wholly owned Subsidiary of the Company that would not prevent, materially delay or materially impair the Initial Merger or the other Transactionstransactions contemplated by this Agreement), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1I) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2II) other than normal semiannual quarterly cash dividends on the Company’s Common Stock as described in Section 5.01(b)(i6.1(a)(i)(C) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase▇▇▇▇▇▇▇▇, repurchase▇▇▇▇▇▇▇▇▇▇, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the cashless exercise of Company Options or the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock UnitsOptions, Company Deferred Restricted Stock Units or Company Performance Stock UnitsUnits in connection with any Taxable event related to such awards, in each case in accordance with past practice and with the terms of the applicable Company Stock Plans Plan 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or 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 Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, of any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the TransactionsInitial Merger or the other transactions contemplated by this Agreement);
(iii) knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Mergers from qualifying for the Intended Tax Treatment;
(iv) except as expressly required by any Company Plan as disclosed in effect on the date hereof: (ASection 6.1(a) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or 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 Disclosure Letter, increase or change the compensation or benefits payable to any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its SubsidiariesSubsidiaries (including through changes in actuarial or other assumptions, except loan forgiveness or otherwise) other than in the ordinary course of business, provided that, notwithstanding the foregoing, the Company shall not and will not permit its Subsidiaries to, other than as required by the terms of any Company Plan or CBA, in each case as in effect on the date hereof (or as modified after the date of this Agreement in accordance with the terms of this Agreement), (a) grant any new equity-based awards, or amend or modify the terms of any such outstanding awards, under any Company Plan, (b) grant any transaction or retention bonuses, (c) increase the compensation or benefits payable to any Senior Executive (other than, solely in the case of benefits pursuant to a generally applicable amendment to a Company Plan covering other Company Employees who are not Senior Executives, which amendment is permitted by this Agreement), (d) pay annual bonuses, other than for completed periods based on actual performance through the end of the applicable performance period as determined in the ordinary course of business consistent with past practice with respect pursuant to (1) employees below the 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 changeapplicable Company Plan, (De) increase the severance or termination payments or benefits payable terms applicable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, Subsidiaries or (Ef) take make any action change to accelerate the vesting any Company Pension Plan or payment of compensation or benefits under any Company Plan that is an “employee welfare benefit plan” (including any equity-based awards), (Fwithin the meaning of Section 3(1) change any actuarial or other assumptions used of ERISA) that would materially increase the costs to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its SubsidiariesSubsidiaries in respect of such Company Plan;
(ivv) 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 $400,000,000 250,000,000 in the aggregate at any time outstanding and 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 (B) in replacement of existing Indebtedness which has matured or is scheduled to mature, in each case after the date of this Agreement, within the Contract evidencing twelve month period following such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing incurrence of 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 Indebtednessreplaced, (C) intercompany inter-company Indebtedness among the Company and its wholly owned Subsidiaries, (D) commercial paper issued in the ordinary course of business, (1E) (i) 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 (2ii) 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, and (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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its 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 Subsidiaries shall use commercially reasonable efforts to mitigate any material increase in their respective 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 practiceexposure to currency risk;
(vvi) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2016 and 2017 and 2018 and 2019 set forth in Section 5.01(b)(v6.1(a)(vi) of the Company Disclosure Letter;
(vivii) 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 material Intellectual Property; provided that this clause (vivii) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game productionlicenses, sales, letting lapse, abandonment, and cancellations, cancellations and Liens that are ordinary course non-exclusive licenses, licenses in each case, case of Intellectual Property, (B) the granting of any licenses of Intellectual Property other than in the ordinary course of business with a term of three years or less where the aggregate payments under such license do not exceed $125,000,000 annually 250,000,000 per license, license and (C) sales of Intellectual Property with a fair market value less than $35,000,000 50,000,000 individually if the transaction is not in the ordinary course or $75,000,000 100,000,000 individually in any event (other than transactions among the 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 SpinCo Business and (E) Affiliation Agreements;
(viiviii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi6.1(a)(vii)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) other than transactions among the Company and the Retained its wholly owned Subsidiaries);
(viiiix) 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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock UnitsOptions, Company Performance Restricted Stock Units and Company Deferred Performance 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 for any profit participation rights relating to programs granted in the Bridge Facility) ordinary course of business consistent with past practice or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 1 contract
Sources: Merger Agreement (Time Warner Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) 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 disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business 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 its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior until the Effective Time, except (A) as otherwise expressly required or expressly contemplated by this Agreement, (B) as reasonably responsive to the First Effective Time a requirement of applicable Law or any Governmental Entity, (unless C) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3D) otherwise expressly disclosed except with respect to clause (xvii), as to which this clause (D) will not apply, as set forth in Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the 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 wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions or otherwise enter into any agreements or arrangements with similar effect on the Company’s or any of the type contemplated by Section 5.01(b)(vii) its Subsidiaries’ assets, operations 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 Subsidiary is the surviving entity in connection with 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 that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms acquire assets outside of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent from any other Person with past practice that does not materially increase a value or purchase price in the cost aggregate in excess of such Company Plan or benefits provided under such Company Plan based on the cost on $4 million, other than acquisitions pursuant to Contracts in effect as of the date hereofof this Agreement;
(iv) issue, (B) grant sell, pledge, dispose of, grant, transfer, encumber, or provide authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any transaction or retention bonuses to any director, officer, employee or other service provider shares of capital stock of the Company or any of its Subsidiaries, Subsidiaries (C) increase other than the compensation, bonus or pension, welfare or other benefits issuance of any director, officer or employee shares by a wholly owned Subsidiary of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the 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 severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate another wholly owned Subsidiary and other than shares issuable in accordance with existing rights under the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awardsStock Plans), (F) change or securities convertible or exchangeable into or exercisable for any actuarial shares of such capital stock, or any options, warrants or other assumptions used rights of any kind to calculate funding obligations with respect to acquire any Company Plan shares of such capital stock or to change the manner in which contributions to such plans are made convertible or the basis exchangeable securities;
(v) create or incur any Encumbrance on which such contributions are determined or (G) forgive any loans to directors, officers or employees material assets of the Company or any of its Subsidiaries;
(ivvi) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company);
(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 capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viii) 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;
(ix) incur any Indebtedness indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any Indebtednessdebt security of the Company or any of its Subsidiaries, except for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice in a principal amount practices (x) not to exceed $400,000,000 35 million 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 (y) in replacement of existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednessindebtedness for borrowed money, (B) except guarantees incurred in compliance 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 this Section 6.1 by 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 indebtedness of 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, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations Subsidiaries of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations C) interest rate swaps 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 newly incurred indebtedness on then prevailing market customary commercial 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;
(vx) with respect to the Retained Business, other than 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 (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to make any capital expenditures other than expenditure in excess of (A) $15 million in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) aggregate during any calendar quarter or (B) $38 million in the ordinary course of business consistent any calendar year;
(xi) 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 past practice and respect to accounting policies or procedures, except as required by changes in the aggregate not GAAP or interpretations thereof;
(xiii) settle any proceedings before a Governmental Entity or any claim, dispute, litigation or arbitration for an amount in excess of 120% of the amounts reflected $2 million individually (or $10 million 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 Letteraggregate);
(vixiv) with amend or modify in any material respect to or terminate any Material Contract, or cancel or modify in any material respect or waive any debts or claims held by it or waive any rights having in each case a value in excess of $2 million individually (or $10 million in the Retained Businessaggregate);
(xv) make any material Tax election, settle any Tax claim or change any method of Tax accounting in excess of $3 million individually or $10 million in the aggregate;
(xvi) transfer, sell, suffer an Encumbrance, or lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses assets, product lines or ordinary course security interests in connection with the production or financing businesses of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, 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 $75,000,000 individually in any event (other than transactions among the Company and or 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 SpinCo Business and (E) Affiliation Agreements;
(vii) 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 including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except in connection with services provided or products sold in the ordinary course of business and sales of obsolete assets not constituting a product line or business and except for (A) sales, leases, licenses or other dispositions of any properties assets not constituting a product line or assets (excluding capital stock of the Retained Subsidiaries) business with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (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 shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any 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 Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to 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);
(ix) with respect to the Retained Business, 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 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 its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 1 contract
Sources: Merger Agreement (Hydril Co)