Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof): (a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses; (b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans; (c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock; (d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices); (e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof; (f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions; (g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; (h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement); (i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise); (j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate; (k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith; (l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law; (m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP; (n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied; (o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries; (p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and (q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 4 contracts
Sources: Agreement and Plan of Merger (National Home Health Care Corp), Merger Agreement (National Home Health Care Corp), Merger Agreement (National Home Health Care Corp)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the The Company covenants and agrees that during as to itself and each of its Subsidiaries that, through the period from the date of Second Closing Date (unless Buyer shall otherwise approve, and except as otherwise expressly contemplated by this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereofAgreement):
(a) the The business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their all commercially reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) Neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it or any of its Subsidiaries in any of its Subsidiaries or other Affiliates, except pursuant to the exercise of existing Company shall notOptions or warrants disclosed to Buyer pursuant to Section 3.2 hereof in accordance with their terms; (ii) amend its articles of incorporation or by-laws (or comparable organizational documents); (iii) split, and shall not combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) repurchase, redeem or otherwise acquire, except in connection with the payment of the exercise price of any option outstanding on the date hereof under the Stock Plan, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(c) Neither it nor any of its Subsidiaries shall (includingi) issue, without limitationsell, 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 shares issuable pursuant to options outstanding on the date hereof under the Stock Plan or warrants outstanding on the date hereof as described in Section 3.2 of the Seller Disclosure Letter); (ii) purchase, transfer, lease, sell, mortgage, pledge, dispose of or encumber any real property, or effect any improvements or expansions thereon; (iii) other than in the ordinary and usual course of business, purchase, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries) or incur or modify any material indebtedness or other equity interests liability; (iv) make or authorize or commit for any capital expenditure(s) in excess of $25,000; (v) make draws against the Company's credit facility with Sunrock other than in the ordinary course of business, provided however that after such time that the Company's draws against such credit facility equal or exceed five million dollars ($5,000,000) in the aggregate, any additional draws against such credit facility, whether in the ordinary course of business or otherwise, may not be made without the prior approval of Buyer, which approval shall not be unreasonably delayed or denied; or (vi) by any means, make any acquisition of, or investment in any business, whether through the acquisition of assets or stock of any other Person;
(d) Except as may be required by applicable law, and except as provided in Section 5.8, 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 Compensation and Benefit Plans or increase the salary, wage, bonus, severance, incentive or other compensation of any employees, officers or directors;
(e) Neither it nor any of its Subsidiaries shall settle or compromise any claims or litigation or, except in the ordinary and usual course of business consistent with past practice, enter into any Debt Contracts or Other Contracts, or modify, amend or terminate prior to the scheduled expiration thereof any of its Debt Contracts or Other Contracts or waive, release or assign any material rights or claims;
(f) Neither it nor any of its Subsidiaries shall make any Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be amended or canceled;
(g) Neither it nor any of its Subsidiaries shall take any action, other than reasonable and usual actions in the ordinary and usual course of business consistent with past practice, with respect to accounting policies or procedures;
(h) Neither it nor any of its Subsidiaries shall sell, transfer, assign or abandon any patents, trademarks or licenses which are owned or controlled directly or indirectly by the Company or any of its Subsidiaries); Subsidiaries except in the ordinary and usual course of business consistent with past practice;
(i) Neither it nor any of its Subsidiaries shall license or (iii) amend, modify otherwise encumber any patents or waive any term of any outstanding security of trademarks which are owned or controlled directly or indirectly by the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) the ordinary and usual course of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansbusiness;
(cj) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by Neither it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant make any modification to employee or agree customer incentives or trade policies which would reasonably be expected to any cause the Company's distributors or end-user customers to increase in any manner the compensation purchases above those levels normally required to meet their respective needs or benefits of any current cause a material increase or former director, officer or employee, except increases decrease in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed Company's inventories or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;Working Capital; and
(fk) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company Neither it nor any of its Subsidiaries shall adopt authorize or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization announce an intention to do any of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter intoforegoing, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendmentcontract, agreement, settlement, surrender, consent commitment or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit arrangement to do any of the foregoing.
Appears in 3 contracts
Sources: Stock Purchase and Sale Agreement (Dsi Toys Inc), Stock Purchase and Sale Agreement (Mvii LLC), Stock Purchase and Sale Agreement (Mvii LLC)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the The Company covenants and agrees that during that, after the period date hereof and prior to the earlier of the termination of this Agreement or the Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, its business shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it shall use its commercially reasonable 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 the present executive officers or key employees of the Company. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement to until the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its SubsidiariesTime, except (A) as otherwise expressly required or expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed), (C) as required by applicable Law, or (D) as set forth in Section 5.01(b) 6.1 of the Company Disclosure ScheduleLetter, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;Company will not:
(ca) the Company shall not (i) sell, transfer adopt or pledge, or agree to sell, transfer or pledge, propose any equity interest owned by it change in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit other applicable governing instruments;
(b) merge or consolidate the Company with any other Person or restructure, reorganize or completely or partially liquidate;
(c) acquire assets or any securities of its Subsidiaries any business from any other Person, in any transaction or series of related transactions, other than (i) acquisitions pursuant to amend its articles Contracts in effect as of incorporationthe date of this Agreement, (ii) acquisitions with a value or bylaws purchase price in the aggregate of less than $200,000, or (iii) splitacquisitions of inventory, combine supplies, and other purchases in the ordinary course of business;
(d) issue, sell, pledge, dispose of, grant, transfer, encumber, or reclassify authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock 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 such convertible or exchangeable securities, other than required issuances of shares of Company Common Stock upon the exercise of Company Stock Options outstanding as of the date of this Agreement;
(e) create or incur any Lien material to the Company on any assets of the Company having a value in excess of $100,000 in the aggregate;
(f) make any loans, advances or capital contributions to or investments in any Person in excess of $100,000 in the aggregate;
(g) 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 enter into any agreement with respect to the voting of its capital stock;
(h) reclassify, and shall not permit split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiaries to split, combine capital stock or reclassify securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(di) other than quarterly dividends not in excess incur any indebtedness for borrowed money or guarantee such indebtedness of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property)another Person, or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, sell any debt securities or options, warrants or calls or other rights to acquire any debt securities security of the Company or any of its SubsidiariesCompany, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than except for (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary indebtedness for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures borrowed money incurred in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect not to capital expenditures or other planned capital expenditures other than exceed $100,000 in the ordinary course aggregate, (ii) indebtedness for borrowed money in replacement of business existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, or (iii) interest rate swaps on customary commercial terms consistent with past practices in excess practice and not to exceed $100,000 of $500,000 notional debt in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(lj) except as set forth in the capital budgets set forth in Section 5.01(l6.1(a)(x) of the Company Disclosure ScheduleLetter and consistent therewith, make or authorize any capital expenditure in excess of $100,000 in the Company shall not, and shall not permit aggregate during any of its Subsidiaries to, 12 month period;
(i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (iik) enter into any labor or collective bargaining agreementContract, memorandum or understandingother than a Customer Contract, grievance settlement or any other agreement or commitment that is reasonably likely to require aggregate annual payments to or relating from the Company of more than $250,000 or that is reasonably likely to require aggregate payments to or from the company of more than $500,000;
(l) enter into any labor union which is different in any material respect with any currently existing collective bargaining agreementContract, memorandum or understandingother than a Customer Contract, grievance settlement or commitment, except, in each case, as required by Lawthat would have been a Material Contract had it been entered into prior to this Agreement;
(m) the Company shall not, and shall not permit make any of its Subsidiaries to, change any of the changes with respect to accounting policies, practices policies or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or by changes in GAAP;
(n) the Company shall not, and shall not permit settle any litigation or other proceedings before a Governmental Entity for an amount in excess of its Subsidiaries to, take, $100,000 (net of insurance coverage) or agree any obligation or commit to take, any action that would, or is reasonably likely to, make any representation or warranty liability of the Company contained in this Agreement inaccurate in any material respect at, or as excess of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfiedamount;
(o) the Company shall notamend, and shall not permit modify or terminate any of its Subsidiaries toMaterial Contract, or cancel, modify or waive any debts or claims held by it under any Material Contract or waive any rights under any Material Contract;
(p) make or change any material tax election or Tax election, change an annual accounting period with respect to Taxesperiod, 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 claimliability, assessment claim or liability relating to the Company or any of its Subsidiariesassessment, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, Taxes or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax;
(q) transfer, if such electionsell, adoptionlease, changelicense, amendmentmortgage, agreement, settlementpledge, surrender, consent encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company, except for product sales in the ordinary course of business, sales of obsolete assets or sales, leases, licenses or other action or omission would have dispositions of assets with a fair market value not in excess of $100,000 the aggregate, other than pursuant to Contracts in effect prior to the date of materially increasing this Agreement;
(r) except as required pursuant to existing written, binding agreements in effect prior to the present or future Tax liability or materially decreasing any present or future Tax benefit date of this Agreement and set forth in Section 5.1(h)(i) of the Company or any of its Subsidiaries;
(p) the Company shall Disclosure Letter, (i) use its commercially reasonable efforts togrant or provide any severance or termination payments or benefits to any director, and shall cause its Subsidiaries to use their respective commercially reasonable efforts toofficer, prevent employee or other service provider of the termination of any Contract with any Significant CustomerCompany, (ii) notincrease the compensation, and shall cause its Subsidiaries not bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer, employee or other service provider of the Company, (iii) establish, adopt, amend or modify terminate any Contract with any Significant Customer, other than on terms substantially equivalent to, Company Benefit Plan or more beneficial on balance to the Company or any of its Subsidiaries than, amend the terms of such Contract prior 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 Company Benefit Plan, to the making of extent not already provided in any such amendment Company Benefit Plan, (v) change any actuarial or modificationother 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, and (iii) not, and shall cause its Subsidiaries not to, enter intoexcept as may be required by GAAP, or materially amend(vi) forgive any loans to directors, modify officers or supplement, any Lease or other Material Contract under which the costs or obligations employees of the Company Company;
(s) take any action or omit to take any action that is reasonably likely to result in any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements the conditions to the Merger set forth in the aggregateArticle VIII not being satisfied; andor
(qt) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
Appears in 3 contracts
Sources: Merger Agreement (Visicu Inc), Merger Agreement (Sterling Venture Partners L P), Merger Agreement (Cardinal Health Partners Lp)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of Prior to the Closing Date, unless the Company Disclosure Schedule or as has consented to in writing by Parentthereto, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):Assignor:
(ai) the business shall conduct its operations according to its usual, regular and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and in substantially the Company and its Subsidiaries same manner as heretofore conducted;
(ii) shall use their commercially its reasonable best efforts to preserve intact their current its business organizations, keep available the services of their current officers organization and employees goodwill and preserve their maintain satisfactory relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties those persons having business dealings relationships with them and to preserve the goodwill of their respective businessesit;
(biii) shall promptly notify the Company shall not, and shall not permit of (x) any of material change in its Subsidiaries to, condition (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase financial or otherwise), pledge business, properties, assets, liabilities or otherwise encumber the normal course of its business or of its properties, (y) any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or (z) the breach of any representation or warranty contained herein;
(iv) shall not issue any shares of its capital stock or securities;
(v) shall not (w) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the capital stock obligations of any of its Subsidiariesother individual, corporation or other entity, (x) make any loans or advances to any other securities or any securities convertible or exercisable intoperson, or any rightsexcept in each case in the ordinary course of business, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (y) acquire (including, without limitation, for cash or shares of stock, by merger, consolidation, or acquisition of stock appreciation rights or phantom interests)assets) any interest in any corporation, partnership or other business organization or division thereof or any assets, or make any investment either by purchase of stock or securities, contributions of capital or property transfer or, except for issuances in the ordinary course of Common Shares upon the exercise business, consistent with past practice, purchase any property or assets of Options outstanding as any other person or (z) effect a sale or other disposition of any of the date hereof; (ii) repurchase, redeem Assets or otherwise acquire any shares of allow the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights creation of any kind to acquire, capital stock lien or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansencumbrance thereon;
(cvi) the Company shall not (ix) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), dividend or make any other distributions in distribution or payment with respect ofto any shares of its capital stock or other ownership interests or (y) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or make any commitment for any such action;
(vii) shall not amend or otherwise change its articles of incorporation or bylaws or equivalent organizational documents
(viii) shall not increase the compensation payable or to become payable to its officers or employees, pay any employment related or other bonus to its shareholder, or, except as presently bound to do, grant any severance or termination pay to, or enter into any employment or severance agreement with, any of its capital stock (except for dividends paid by direct directors, officers or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)employees;
(eix) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit take any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures action other than in the ordinary course of business and in a manner consistent with past practices in excess of $500,000 in the aggregate;practice with respect to accounting policies or procedures; and
(kx) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, exceptagree, in each casewriting or otherwise, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change to take any of the accounting policies, practices foregoing actions or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, which would make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, untrue or incorrect as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingClosing Date.
Appears in 3 contracts
Sources: Asset Purchase Agreement (Ultimate Software Group Inc), Asset Purchase Agreement (Ultimate Software Group Inc), Asset Acquisition Agreement (Ultimate Software Group Inc)
Interim Operations. Except The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing (which approval shall not be unreasonably withheld or delayed) and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 6.1 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereofLetter):
(a) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary course of business consistent with past practice, and the Company it and its Subsidiaries shall use their respective commercially reasonable best efforts to (i) preserve intact their current its present business organizationsorganization substantially intact, (ii) maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees, business associates and other third parties with which the Company has material business relations consistent with past practice, (iii) keep available the services of their its current officers and employees key employees, and preserve their relationships with their (iv) maintain in effect all material customersforeign, suppliersfederal, licensorsstate and local licenses, licenseesapprovals and authorizations, advertisersincluding without limitation, distributors all material licenses and other material third parties having business dealings with them and permits that are required for the Company or any of its Subsidiaries to preserve the goodwill of their respective businessescarry on its business;
(b) the Company it shall not, and shall not permit any of its Subsidiaries to, and shall not commit to, (i) authorize for issuance, issue, deliversell, sell pledge, dispose of or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of owned by it in any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchaseamend its certificate of incorporation or by-laws or term of any outstanding security of the Company or its Subsidiaries; (iii) split, redeem combine or otherwise acquire reclassify any shares of the capital stock or issue or authorize the issuance of any other equity interests securities in respect of, in lieu of or in substitution for shares of capital stock, of the Company or any less-than-wholly-owned Subsidiary of the Company; (iv) declare, set aside or pay any dividend payable in cash, stock or property or make any other actual, constructive or deemed distribution (whether in cash, stock or property or any combination thereof) in respect of any capital stock, other than dividends by a direct or indirect wholly-owned Subsidiary of the Company to its parent; or (v) purchase, redeem or otherwise acquire, or modify or amend, or offer to redeem, purchase or otherwise acquire, or modify or amend, any Company equity or equity related securities or any equity or equity related securities of any of the Company’s Subsidiaries;
(c) it shall not, and shall not permit any of its Subsidiaries (includingto, without limitationand shall not commit to, offer, issue or sell, any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stockstock of any class, except that the Company may (i) issue up to 20,000 Shares pursuant to the Company’s Amended and shall not permit any Restated Employee Qualified Stock Purchase Plan dated November 13, 1998, (ii) issue Shares upon exercise of its Subsidiaries Company Options outstanding on the date hereof or hereafter granted in accordance with the provisions of subclause (iii) of this clause (c) or pursuant to splitthe Company Warrants, combine or reclassify any shares (iii) grant Company Options to purchase up to an aggregate of its capital stock57,500 Shares to non-employee directors for their attendance at board meetings, in accordance with the terms of the Directors Plan as in effect on the date hereof and consistent with past practice and with an exercise price per Share no less than the fair market value of a Share as of the date of grant;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company it shall not, and shall not permit any of its Subsidiaries to, declareand shall not commit to, set aside (i) other than in the ordinary and usual course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or pay encumber any dividends on material property or assets (whether in cash, stock or other property), or make any other distributions in respect of, any of its including capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned of Subsidiaries of the Company consistent with past practicesCompany);
; (eii) neither the Company nor any of its Subsidiaries shall (i) grant without prior written notice to Parent, make, authorize or commit or agree to make any increase capital expenditures or any obligations or liabilities in respect thereof, except for those which do not exceed $10,000; (iii) make, authorize or commit or agree to make any capital expenditures or any obligations or liabilities in respect thereof, except for those which do not exceed $25,000; (iv) acquire or propose to acquire (whether by merger, consolidation, purchase of equity or assets or otherwise) any assets or stock of or other interest in any manner the compensation other Person or benefits of any current or former director, officer or employeeentity, except increases in connection with capital expenditures permitted hereunder and except for acquisitions of inventory and other assets in the ordinary course of business; (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than loans (not prohibited under Section 13(k) of the Exchange Act) to employees in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed practice not to exceed $5,000 to any individual or described $50,000 in Section 5.01(ethe aggregate) or investments by the Company or a wholly-owned Subsidiary of the Company Disclosure Schedule and except to or in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any wholly-owned Subsidiary of its Subsidiariesthe Company, or incur (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, including by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and drawing upon the Company’s Subsidiaries; existing line of credit) or (y) establish or acquire (i) adversely modify any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible Indebtedness for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guaranteeborrowed money, or agree to guarantee, guarantee any such Indebtedness or Liabilities or obligations of another personPerson, issue or sell, or agree to issue or sell, sell any debt securities or options, warrants or calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of othersanother Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person Person or enter into any arrangement having the economic effect of any of the foregoing; foregoing (or incur or modify any other material liability), (yvi) sellterminate, lease, license cancel or subject to request any Lien or otherwise dispose ofadverse change in, or agree to sell, lease or subject to any Lien or otherwise dispose ofadverse change in, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant Material Contract to existing contracts and commitments described in Section 5.01(g) of which the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt is a party, or put into effect a plan waive, release or assign any material rights, claims of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization benefits of the Company or any of its Subsidiaries thereunder, (vii) other than in the ordinary course of business consistent with past practice, enter into any transaction specifically contemplated by this Agreement)new Contract, or fail to use reasonable business efforts to renew any Contract, to which the Company or any of its Subsidiaries is a party, which is material to the Company and its Subsidiaries taken as a whole; (viii) enter into any non-competition Contracts or other Contracts that purport to limit in any respect either the type of business in which it (or, after giving effect to the Merger, Parent or its Subsidiaries) may engage or the manner or locations in which any of them may so engage in any business; (ix) enter into any partnership, joint venture, strategic alliance, revenue or profit sharing agreement or similar arrangement with any Person; or (x) change or modify its line of business from the line of business in which it is engaged as of the date hereof or enter into any new line of business;
(ie) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company it shall not, and shall not permit any of its Subsidiaries to, and shall not commit to, (i) terminate, establish, adopt, enter into, make any new grants or materially amendawards under, amend or otherwise modify, any Benefit Plans, except as provided in Section 6.1(c) and Section 6.10(a)(v), (ii) except in the ordinary course of business or as required by Law or the terms of any Benefit Plan, make any contribution to any existing Benefit Plan, (iii) grant any pension, retirement, severance, retention, change of control or termination pay or rights to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, or amend or modify the terms of any Company Option, except as required by Law, (iv) increase the salary, wage, bonus or supplement other compensation or benefits of any Contract outside directors, officers or employees, or consultants, except for (A) annual salary increases to non-executive employees made in the ordinary course of business consistent with past practice under which at the regularly scheduled times; provided that the aggregate dollar amount of such increases shall not exceed the corresponding amount for the calendar year 2003, and (B) subject to Section 6.1(c), the grant of options to non-employee directors of the Company pursuant to the Directors Plan, or (v) make payments or distributions (other than normal salaries) to or enter into any transaction with any affiliate of its Subsidiaries shall have monetary obligations the Company, (vi) enter into any consulting agreement (A) with any consultant (other than surgeon consultants) providing for payments in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)50,000, or (iiB) waivewith any surgeon consultant regardless of the amount of payments to be made thereunder, release(vii) accelerate the payment of compensation or benefits to any director, grantofficer, assignemployee or consultant, modify except as required by applicable Law, agreements in effect as of the date of this Agreement or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwiseSection 6.10(a);.
(jf) the Company it shall not, and shall not permit any of its Subsidiaries to, authorize and shall not commit to, (i) prior to consulting with Parent, commence any litigation or make arbitration proceeding or any capital expenditures (regulatory or other governmental action or proceeding with or before any Governmental Entity other than pursuant ordinary contract and commercial litigation that the Company does not reasonably expect to commitments result in total costs to the Company in excess of $300,000, (ii) waive, release or assign any material rights or claims, or (iii) pay, discharge, settle, compromise or satisfy any claims, liabilities or obligations (absolute, accrued, contingent, asserted, unasserted or otherwise), other than the payment, discharge, settlement, compromise or satisfaction, in the ordinary course of business consistent in amount and kind with past practice, of claims, liabilities or obligations reflected in the Company’s most recent financial statements (including the notes thereto) filed with the Company Filed Reports prior to the date hereof or other planned capital expenditures incurred since the date of such financial statements in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregatepractice;
(kg) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, and shall not commit to, change its (i) materially amend any currently existing labor methods or collective bargaining agreementprinciples of accounting in effect at the Audit Date, memorandum except as required by changes in GAAP after the date of this Agreement, as concurred by its independent public accountants, or understanding, grievance settlement as required by applicable Law or any other agreement or commitment to or relating to any labor union, by a Governmental Entity or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Lawfiscal year;
(mh) the Company it and its Subsidiaries shall use commercially reasonable efforts to keep in place any material insurance policy naming it as a beneficiary or loss-payable payee; and
(i) it shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policiesagree, practices or procedures (including tax accounting policiesauthorize, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Returndo, enter into any closing agreement, settle an agreement to do or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit publicly announce an intention to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Biomet Inc), Merger Agreement (Interpore International Inc /De/)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless SBC shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth the Stock Option Agreement, in Section 5.01 of the Company Disclosure Schedule Letter or as consented to in writing required by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereofapplicable Law):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially all reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsregulators, licenseesdistributors, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) the Company shall not, and it shall not (A) amend its certificate of incorporation or by-laws or amend, modify or terminate the Rights Agreement; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than per share regular quarterly cash dividends not in excess of $0.44 per Company Share; or (D) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (iother than the Company's Employee Stock Ownership Plan) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(iii) neither it nor any of its Subsidiaries shall knowingly take any action that would prevent the capital Merger from qualifying for "pooling of interests" accounting treatment or as a tax-free "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties herein to become untrue in any material respect;
(iv) 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 Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any directors, officers or employees except (A) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice, (B) in the normal and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases and the provision of individual Compensation and Benefit Plans consistent with past practice for promoted or newly hired officers and employees and the adoption of Compensation and Benefit Plans for employees of new Subsidiaries in amounts and on terms consistent with past practice) or (C) for actions necessary to satisfy existing contractual obligations under Compensation and Benefit Plans existing as of the date hereof;
(v) neither it nor any of its Subsidiaries shall issue any preferred stock or incur any indebtedness for borrowed money (other than indebtedness incurred solely for the purpose of funding the Escrow Account or the replacement or refinancing of existing short-term indebtedness) or guarantee any such indebtedness if the Company should reasonably anticipate that as a result of such incurrence any of the Company's or any of its Subsidiaries' outstanding senior indebtedness would be rated lower than A by Standard & Poor's;
(vi) neither it nor any of its Subsidiaries shall make any capital expenditures in any calendar year in an aggregate amount in excess of the aggregate amount reflected in the Company's capital expenditure budget for such year, a copy of which has been provided to SBC, plus $100 million;
(vii) except as contemplated by Section 6.1(a)(iv), neither the Company nor any other securities of its Subsidiaries shall issue, deliver, sell, or encumber shares of any class of its common stock or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such sharesshares except the option granted under the Stock Option Agreement, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options options outstanding as of on the date hereof; (ii) repurchasehereof under the Stock Plans, redeem or otherwise acquire any shares awards of the capital options and restricted stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by granted hereafter under the Stock Plans or in the agreements ordinary course of business in accordance with this Agreement and shares issuable pursuant to which such Options were granted or (C) in connection with terminating the Options options and the Stock Plansawards;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(eviii) neither the Company it nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets spend in excess of $25,000 individually or $50,000 50 million in the aggregate other than (i) pursuant any calendar year to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Scheduleacquire any business, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established whether by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization purchase of property or other reorganization assets or otherwise (valuing any non-cash consideration at its fair market value as of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) date of the Company Disclosure Scheduleagreement for such acquisition). For purposes of this clause (viii), the Company amount spent with respect to any acquisition shall not, and shall not permit any be deemed to include the aggregate amount of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which capital expenditures that the Company is obligated to make at any time or any plans to make as result of such acquisition within two years after the date of acquisition; (ix) neither it nor its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer enter any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (business other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of telecommunications business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent those businesses traditionally associated with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary telecommunications business or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into or extend any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required telecommunications business outside the geographic areas served by Law;
(m) the Company shall not, it and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregateAgreement; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (SBC Communications Inc), Merger Agreement (SBC Communications Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or until termination of delayed) and except as otherwise expressly set forth in this Agreement in accordance with Article 7 hereofor the corresponding subsection of Section 3.1(a) of the Company Disclosure Letter):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course and, to the extent consistent therewith, it and each of business and the Company and its Subsidiaries shall use their commercially its respective reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) the Company shall not, and it shall not (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its Organizational Documents; (C) other than in the case of any direct or indirect, wholly owned Subsidiary, split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries; or (E) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(iii) neither it nor any of its Subsidiaries shall (includingA) issue, without limitationsell, 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 Company Voting Debt (other equity interests of than Company Common Shares issuable under the Company Option Plans); (B) other than products sold to customers in the ordinary and usual course of business (without limitation as to dollar amount) or otherwise in the ordinary and usual course of business and not in an aggregate amount of more than $5,000,000, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries); (C) incur or modify any indebtedness other than (x) indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries or (iiiy) amendindebtedness in an aggregate amount less than $30,000,000; provided, modify however, that prior to incurring any indebtedness, if practicable, the Company shall provide Parent with a reasonable right of consultation; provided, further, that the foregoing right of consultation shall not apply in the case of indebtedness in respect of letters of credit, guarantees or waive performance bonds or indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries; (D) except as approved by the Transition Team, make or authorize or commit for any term capital expenditures which, individually, is in excess of $1,000,000 or, in the aggregate, are in excess of $10,000,000; and (E) except as otherwise provided in clause (D) immediately above and other than raw materials, supplies and other inventory items acquired in the ordinary and usual course of business consistent with past practice, by any means, make any acquisitions of, or investments in stock of (or other interest in) or assets of any outstanding security of the Company or other Person;
(iv) neither it nor any of its Subsidiaries, except Subsidiaries shall (A) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Company Compensation and Benefit Plans except as required by this Agreementany Laws or the terms of applicable collective bargaining agreements, (B) as set forth other than in Section 5.01(b) the ordinary and usual course of business consistent with past practice and the Company Disclosure ScheduleCompany’s compensation budget with respect to employees at an annual compensation level of less than $150,000, in connection with accelerating increase the vesting schedules compensation of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted any employee or (C) in connection with terminating except as approved by the Options and the Stock PlansTransition Team, hire any employee at an annual compensation level expected to be more than $100,000;
(cv) except in the ordinary and usual course of business, neither it nor any of its Subsidiaries shall settle or compromise any material claims or litigation or modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(vi) neither it nor any of its Subsidiaries shall make any material Tax election or file any material income Tax Return inconsistent with past practice or implement or adopt any change in its accounting principles or material accounting practices, in all cases other than as may be required by applicable Law or by Canadian GAAP;
(vii) neither it nor any of its Subsidiaries shall take any action or omit to take any action that it reasonably expects would cause any of its representations and warranties herein to become untrue in any material respect; and
(viii) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed) and except as otherwise expressly set forth in this Agreement or the corresponding subsection of Section 3.1(b) of the Parent Disclosure Letter):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and each of its Subsidiaries shall use its respective reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) issue, sell, transfer or pledge, dispose of or agree to sell, transfer or pledge, encumber any equity interest capital stock owned by it in any of its Subsidiaries Subsidiaries; (B) except as provided in Section 3.19, amend its Organizational Documents or alter through mergeramend, liquidation, reorganization, restructuring modify or terminate the Parent Rights Agreement; (C) other than in any other fashion the corporate structure or ownership case of any direct or indirect, wholly owned Subsidiary, split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than (x) dividends from its Subsidiariesdirect or indirect wholly owned Subsidiaries and (y) regular quarterly cash dividends in respect of Parent Common Stock, not in excess of $0.26 per share per quarter, with declaration and record dates consistent with past practice; or (iiE) amend repurchase, redeem or otherwise change its certificate of incorporation or bylaws acquire, or permit any of its Subsidiaries to amend its articles of incorporationpurchase or otherwise acquire, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit stock or any of its Subsidiaries to split, combine securities convertible into or reclassify exchangeable or exercisable for any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(eiii) neither the Company it nor any of its Subsidiaries shall (iA) grant issue, sell, pledge, dispose of or agree to encumber any increase in any manner the compensation shares of, or benefits securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any current kind to acquire, any shares of its capital stock of any class or former directorany Parent Voting Debt (other than Parent Common Stock issuable under the Parent Stock Plans); (B) other than (x) as Parent deems reasonably necessary to obtain the consent, officer approval or employeeauthorization of any Governmental Entity in order to consummate the transactions contemplated by this Agreement and the Arrangement, except increases (y) products sold to customers in the ordinary and usual course of business (without limitation as to dollar amount) or (z) otherwise in the ordinary and usual course of business and not in an aggregate amount of more than $5,000,000, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries); (C) incur or modify any indebtedness other than (x) commercial paper, (y) indebtedness existing solely between Parent and its wholly owned Subsidiaries or between such wholly owned Subsidiaries or (z) indebtedness in an aggregate amount less than $30,000,000; provided, however, that prior to incurring any indebtedness, if practicable, Parent shall provide the Company with a reasonable right of consultation; provided, further, that the foregoing right of consultation shall not apply in the case of indebtedness in respect of commercial paper, letters of credit, guarantees or performance bonds or indebtedness existing solely between Parent and its wholly owned Subsidiaries or between such wholly owned Subsidiaries; (D) except as approved by the Transition Team, make or authorize or commit for any capital expenditures which, individually, is in excess of $1,000,000 or, in the aggregate, are in excess of $10,000,000; and (E) except as otherwise provided in clause (D) immediately above and other than raw materials, supplies and other inventory items acquired in the ordinary and usual course of business consistent with past practice, increases and bonuses expressly required under existing employment agreementsby any means, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into make any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiariesacquisitions of, or investments in stock of (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan interest in) or any agreement, arrangement, plan or policy for the benefit assets of any current or former director, officer or employee in existence on the date hereofother Person;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company it nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation(A) terminate, dissolutionestablish, mergeradopt, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, make any new grants or materially amendawards under, modify amend or supplement otherwise modify, any Contract outside Parent Compensation and Benefit Plans except as required by any Laws or the terms of applicable collective bargaining agreements, (B) other than in the ordinary and usual course of business consistent with past practice under which and Parent’s compensation budget with respect to employees at an annual compensation level of less than $150,000, increase the Company compensation of any employee or (C) except as approved by the Transition Team, hire any employee at an annual compensation level expected to be more than $100,000;
(v) except in the ordinary and usual course of business, neither it nor any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)settle or compromise any material claims or litigation or modify, amend or (ii) waive, release, grant, assign, modify or transfer terminate any of its material Contracts or waive, release or assign any material rights or claims (whether such rights or claims arise under a Contract or otherwise)claims;
(jvi) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, authorize or shall make any capital expenditures (material Tax election or file any material income Tax Return inconsistent with past practice or implement or adopt any change in its accounting principles or material accounting practices, in all cases other than pursuant to commitments prior to the date hereof as may be required by applicable Law or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregateU.S. GAAP;
(kvii) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming neither it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit nor any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission that it reasonably expects would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or cause any of its Subsidiaries;representations and warranties herein to become untrue in any material respect; and
(pviii) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or neither it nor any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment will authorize or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit into an agreement to do any of the foregoing.
Appears in 2 contracts
Sources: Combination Agreement (Donnelley R R & Sons Co), Combination Agreement (Moore Wallace Inc)
Interim Operations. Except FEI covenants and agrees as to itself and its Subsidiaries, and PIE covenants and agrees as to the PEO Group and the PEO Business that after the date hereof and prior to the Closing (unless the other party shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed), except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of connection with the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):Restructuring:
(a) the its business and operations that of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and the Company they and its their Subsidiaries shall use their commercially reasonable respective best efforts to preserve their business organizations intact and maintain their current business organizations, keep available the services of their current officers existing relations and employees and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and they shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliversell, sell pledge, dispose of or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of owned by them in any of its their Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) amend their Articles of Association, certificate of incorporation or by-laws; (iii) split, combine or reclassify their outstanding shares of capital stock; (iv) declare, set aside or pay any dividend or make any distribution payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) repurchase, redeem or otherwise acquire acquire, or permit any of their Subsidiaries to purchase or otherwise acquire, any shares of the their capital stock or other equity interests any securities convertible into or exchangeable or exercisable for any shares of the Company or its capital stock;
(c) neither they nor any of its their Subsidiaries shall (includingi) issue, without limitationsell, 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 their capital stock of any class or any Voting Debt or any other property or assets (other than, in the case of FEI, shares of Common Stock issuable without further action of FEI's board of directors pursuant to options outstanding on the date hereof under the Stock Option Plan); (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of their Subsidiaries) or incur or modify any material indebtedness or other equity interests liability; (iii) except as disclosed in budgets provided to the other party hereto prior to the date hereof, make any commitments for, make or authorize any capital expenditures other than in the ordinary and usual course of business and in amounts less than $50,000 individually and $250,000 in the Company aggregate or, by any means, make any acquisition of, or investment in, assets or stock of any of its Subsidiaries)other Person or entity; or (iiiiv) amendenter into any joint venture, modify merger or waive other similar agreement with any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockPerson;
(d) other than quarterly dividends not in excess except for grants of $0.075 per Common Share declared and paid options, consistent with FEI's past practicespractice, the Company shall notpursuant to its Stock Option Plan to purchase no greater than 5,000 shares of Common Stock, and shall not permit neither they nor any of its their Subsidiaries toshall terminate, declareestablish, set aside adopt, enter into, make any new grants or pay awards under, amend or otherwise modify, any dividends on (whether in cashCompensation and Benefit Plans, stock or increase the salary, wage, bonus or other property), or make compensation of any other distributions employees except increases occurring in respect of, any the ordinary and usual course of its capital stock business in accordance with established past practice (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practiceswhich shall include normal periodic performance reviews and related compensation and benefit increases);
(e) neither the Company they nor any of its their Subsidiaries shall (i) grant settle or agree to compromise any increase in any manner the compensation material claims or benefits of any current or former director, officer or employeelitigation or, except increases in the ordinary and usual course of business consistent with past practicemodify, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed amend or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or terminate any of its Subsidiariestheir material Contracts or waive, release or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided assign any material rights or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofclaims;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company they nor any of its their Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof Tax election or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration usual course of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithbusiness;
(lg) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither they nor any of its their Subsidiaries to, (i) materially amend any currently existing labor will authorize or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other an agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Combination Agreement (Fei Co), Combination Agreement (Philips Electronics N V)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (or until termination of unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(ai) it and its Subsidiaries' businesses shall be conducted in the ordinary 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 and operations of selling any products or services materially different from existing products or services of the Company and its Subsidiaries shall be conducted, and the books and records or entering into or engaging in new lines of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company business);
(ii) it and its Subsidiaries shall use their commercially reasonable respective best efforts to preserve their business organizations intact and maintain their current business organizationsexisting relations and goodwill with customers, keep available the services of their current officers and employees and preserve their relationships with their material customersvendors, suppliers, licensorscreditors, licenseeslessors, advertisersregulators, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(biii) the Company shall not, and it shall not permit any of its Subsidiaries to, (iA) authorize for issuance, issue, deliversell, sell pledge, dispose of or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of owned by it in any of its Subsidiaries; (B) amend its articles of incorporation or by-laws or adopt any rights agreement or similar agreement; (C) split, combine or reclassify its outstanding shares of capital stock; (D) authorize, declare, set aside or pay any dividend or other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitationdistribution payable in cash, stock appreciation rights or phantom interests), except for issuances property in respect of Common Shares upon the exercise of Options outstanding as of the date hereofany capital stock other than dividends from its direct or indirect wholly owned Subsidiaries; or (iiE) repurchase, redeem or otherwise acquire any shares of the capital stock acquire, or other equity interests of the Company or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock;
(includingiv) neither it nor any of its Subsidiaries shall (A) issue, without limitationsell, 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 equity interests property or assets; (B) other than in the ordinary and usual course of the Company business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries); ) or (iii) amend, incur or modify any material indebtedness or waive any term of any outstanding security of the Company or any of its Subsidiariesother liability, except for immaterial Liens arising by operation of law; (AC) as required by this Agreement, (B) make or authorize or commit to any capital expenditures other than as set forth in Section 5.01(b6.1(a)(iv)(C) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted Letter; or (CD) in connection with terminating the Options and the Stock Plansmake any acquisition of, or investment in, assets or stock of any other Person;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(ev) neither the Company it nor any of its Subsidiaries shall (i) grant terminate, establish, adopt, enter into, make any new grants or agree to awards under, amend or otherwise modify, any Compensation and Benefit Plans except as required by Law or increase in any manner the salary, wage, bonus or other compensation or benefits of any current or former director, officer or employee, employees except increases for employees who are not executive officers of the Company occurring in the ordinary and usual course of business consistent with past practice, increases (which shall include normal periodic performance reviews and bonuses expressly required under existing employment agreements, bonus plans related compensation and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereofbenefit increases), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(hvi) neither the Company it nor any of its Subsidiaries shall adopt pay, discharge, settle or put satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations in the ordinary and usual course of business;
(vii) neither it nor any of its Subsidiaries shall make or change any material Tax election, settle any audit, file any amended Tax Returns or 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;
(viii) neither it nor any of its Subsidiaries shall enter into effect a plan of complete any Contract containing any provision or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization covenant limiting in any respect the ability of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations their "AFFILIATES" (as defined in excess Rule 12b-2 under the Exchange Act) to (A) sell any products or services of $25,000 or to any other Person, (except as may be necessary for the Company to comply B) engage in any line of business (including geographic limitations) or (C) compete with its obligations hereunder)or obtain products or services from any Person, or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) limiting the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition ability of any Lien Person to provide products or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance services to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and their Affiliates;
(iiiix) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or neither it nor any of its Subsidiaries resulting from such amendmentwill terminate, modification or supplement amend, or modify in any material respect, any Material Company Contract;
(x) neither it nor any of its Subsidiaries shall take any action or omit to take any action that would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications cause any of its representations and supplements warranties herein to become untrue in the aggregateany material respect; and
(qxi) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, agree will authorize or commit enter into an agreement to do any of the foregoing.
(b) During the period from the date of this Agreement through the Effective Time, (i) as requested by Parent, the Company shall confer on a regular basis with one or more representatives of Parent with respect to material operational matters, (ii) upon the knowledge of the executive officers of the Company of any event or occurrence that is reasonably likely to result in a Company Material Adverse Effect, any material litigation or material governmental complaints, investigation or hearings (or communications indicating that the same may be contemplated), the breach in any material respect of any representation, warranty or covenant contained herein, or the failure of any condition precedent to the Merger, the Company shall promptly notify Parent thereof and (iii) upon the knowledge of the executive officers of Parent of any event or occurrence that is reasonably likely to result in a Parent Material Adverse Effect or the failure of any condition precedent to the Merger, Parent shall promptly notify the Company thereof.
Appears in 2 contracts
Sources: Agreement and Plan of Reorganization and Merger (Medical Resources Management Inc), Agreement and Plan of Reorganization and Merger (Emergent Group Inc/Ny)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time date on which Purchaser's nominees comprise a majority of the Board of Directors of the Company (or until termination of unless Praxair shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially its reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing rela- tions and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) it shall not (A) sell or pledge any capital stock owned by it in any of its Subsidiaries; (B) amend the Company shall notCharter or its by-laws or amend, modify or terminate the Rights Agreement; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any Shares or Preferred Shares other than regular quarterly or semi- annual cash dividends not in excess of $0.12 per Share and shall not regular quarterly or semi-annual cash dividends on the Preferred Shares; or (E) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests except in connection with the ordinary course of operations of the Company or CBI Salaried Employee Stock Ownership Plan (1987);
(iii) neither it nor any of its Subsidiaries shall except as disclosed in Section 7.1(a) of the Company Disclosure Letter (includingA) issue, without limitationsell, pledge, dispose of or encumber, or authorize or propose the issuance, sale, pledge, disposition or encumbrance of, any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets (other than Shares issuable pursuant to options outstanding on the date hereof under the Stock Plan or upon conversion of Convertible Preferred Shares; (B) other than in the Company ordinary and usual course of busi- ness, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of any other property or assets or encumber any property or assets (including capital stock of any of its Subsidiaries)) or incur or modify any material indebtedness or other liability; or (iiiC) amendmake any commitments for, modify make or waive authorize any term of any outstanding security of the Company or any of its Subsidiariescapital expenditures other than existing capital expenditures required to be made pursuant to existing capital projects, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b7.1(a)(iii) of the Company Disclosure ScheduleLetter, in connection with accelerating the vesting schedules which have been previously authorized or, by any means, make any acquisition of, or investment in, assets or stock of the Options to the extent required by the Stock Plans any other Person or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansentity;
(civ) the Company shall not (iexcept as disclosed in Section 7.1(a) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) Disclosure Letter, neither the Company it nor any of its Subsidiaries shall (i) grant terminate, establish, adopt, enter into, make any new grants or agree to awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase in any manner the salary, wage, bonus or other compensation or benefits of any current or former director, officer or employee, except employees other than increases in compensation in the ordinary course of business business, in each case, consistent with past practice, increases practices with regard to frequency and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofamount;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company it nor any of its Subsidiaries shall adopt settle or put into effect a plan compromise any material claims or litigation or, except in the ordinary and usual course of complete business modify, amend or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or terminate any of its Subsidiaries (other than material Contracts or waive, release or assign any transaction specifically contemplated by this Agreement)material rights or claims;
(ivi) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or neither it nor any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof Tax election or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration usual course of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;business; and
(lvii) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor will authorize or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other an agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Px Acquisition Corp), Merger Agreement (Px Acquisition Corp)
Interim Operations. Except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 5.01 of the Company Disclosure Schedule Schedule, as required by applicable Law, for Expenses incurred by the Company or as consented otherwise agreed to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary course of business consistent with past practice and the Company and its Subsidiaries subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and key employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors licensees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesdistributors;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiariessubsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, including stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options or Warrants outstanding as of the date hereof; of this Agreement, (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries subsidiaries (including, without limitation, including securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or subsidiaries) except for forfeitures of Common Shares issued pursuant to Restricted Stock Awards, (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiariessubsidiaries, (iiiv) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries subsidiaries to amend its articles certificate of incorporation, or bylaws or similar organizational documents, (iiiv) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries subsidiaries to split, combine or reclassify any shares of its capital stockstock or (vi) amend or otherwise change the terms of any Warrants;
(dc) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, subsidiaries to (i) declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid to the Company by direct or indirect wholly wholly-owned Subsidiaries to the Company or to other wholly owned Subsidiaries subsidiaries of the Company consistent with past practicesCompany);
, (eii) neither the Company nor any of its Subsidiaries shall (i) grant acquire or agree to any increase in any manner acquire, including by merging or consolidating with, or purchasing the compensation assets (except raw materials, inventory or benefits of any current or former director, officer or employee, except increases supplies in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or (iii) enter into, amend, modify or supplement any Contract, transaction, commitment or arrangement with any current or former officer, director, employee or other than acquisitions or purchases made with the prior written consent affiliate of the Parent Company or any of its subsidiaries;
(each an “Approved Acquisition”d) neither the Company nor any of its subsidiaries shall (i) grant or agree to any increase in any manner the compensation, severance benefits or fringe benefits of, or pay any severance or bonus to, any current or former director, officer or employee except for payments made in accordance with Sections 5.11(b) and other than non-taxable transfers by or among 5.11(c) hereof, (ii) except as provided in Section 5.11(d) of this Agreement and Section 5.11(d)(iii) of the Company Disclosure Schedule, enter into any new or amend any existing employment, consulting, severance, termination, change-of-control or indemnification Contract with any director, officer or employee of the Company, (iii) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date of this Agreement or amend, modify or terminate any Benefit Plan or other employee benefit plan or any Contract, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date of this Agreement or (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including Section 2.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date of this Agreement (including the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement), except in connection with terminating the Options and the Stock Plans pursuant to Section 2.02 and except for the payment of the employer match under the Company’s Subsidiaries; or (y401(k) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionsplan;
(ge) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets that are material, individually or in the aggregate, to the Company and its subsidiaries, taken as a whole, other than sales of inventory and other assets in the ordinary course of business consistent with past practice;
(xf) except pursuant to a Material Contract, the Company shall not, and shall not permit any of its subsidiaries to (i) incur, assume, be responsible for or pre-pay pay, discharge or satisfy any Indebtedness, Indebtedness or enter into any agreement to, Contract to incur, assume, be responsible for or pre-pay pay, discharge or satisfy any Indebtedness, or guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations obligation of another personPerson, or issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiariessubsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement Contract to maintain any financial statement condition of another person Person or enter into any Contract or arrangement having the economic effect of any of the foregoing; , or (ii) make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any Person, other than (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by loans between or among the Company and any of its wholly-owned subsidiaries and (z) cash advances to the Company’s Subsidiariesor its subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business;
(hg) neither the Company nor any of its Subsidiaries subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)subsidiaries;
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(jh) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, authorize (i) enter into, or make amend, modify, elect not to renew or terminate or waive, release or assign any capital expenditures rights under any Material Contract in any material respect in a manner which is adverse to the Company or its subsidiaries (other than pursuant entering into a new Material Contract to commitments prior to replace a Material Contract which has terminated without a breach thereunder by its terms, which new Material Contract is consistent with the date hereof or other planned capital expenditures terms of the terminated Material Contract);
(i) except for customer Contracts entered into in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of practice, the Company Disclosure Schedule by category) shall not, and shall not permit its subsidiaries to, renegotiate or make enter into any commitments with respect to capital expenditures new material Contract, license, arrangement or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregaterelating to any Proprietary Rights;
(kj) the Company shall, and shall cause its Subsidiaries to, subsidiaries (i) shall comply in all material respects with their obligations under the Material Contracts as such obligations become due, (ii) shall continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s past practices and its Subsidiaries’ past practices, (iiiii) use reasonable best efforts shall not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(lk) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, make any capital expenditure or commitments not consistent with the expenditures in the Company’s capital budget for 2008 provided to Parent;
(il) materially amend the Company shall not, and shall not permit any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment of its subsidiaries to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in make any material respect changes in their respective standardized or other sales terms and conditions, except in the ordinary course of business consistent with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Lawpast practice;
(m) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, change enter into any settlement, conciliation or similar Contract with any Governmental Authority or that requires payment of any material consideration after the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any execution date of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAPthis Agreement;
(n) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, take(i) settle or compromise any pending or threatened Claim, except with respect to the settlement or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as compromise of any time prior tosuch Claim where the full amount paid or to be paid is covered by insurance coverage maintained by the Company, the Effective Time or result in (ii) change any of the conditions set forth accounting policies, practices or procedures (including material Tax accounting methods, periods, policies, practices or procedures) or any of its methods of reporting income, deductions or other items for financial accounting purposes, except as may be required as a result of a change in Article 6 not being satisfiedGAAP enacted after the date of this Agreement, or omit(iii) except in the ordinary course of business and in a manner consistent with past practice, make, change or rescind any material Tax election, enter into any material closing agreement relating to Taxes, settle or compromise any material Tax liability, audit, claim, proceeding or assessment, file any material amended Tax Return, surrender any right to claim a refund of material Taxes, or agree consent to omit, any extension or waiver of the limitation period applicable to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time Tax liability or to prevent any such condition from not being satisfiedassessment;
(o) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, make or change allow any material tax election Company Proprietary Rights to become abandoned or change an annual accounting period with respect expired for failure to Taxes, file any amended Tax Return, enter into any closing agreement, settle make required filings or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregatepay required fees; and
(qp) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Bard C R Inc /Nj/), Merger Agreement (Specialized Health Products International Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company (a) Yankees covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date hereof and until the earlier of this Agreement to the Effective Time (or until the termination of this Agreement in accordance with Article 7 hereof):its terms, unless Braves shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in Section 4.1(a) of the Yankees Disclosure Letter:
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships consistent with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessespast practice;
(bii) the Company shall not, and (A) it shall not issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) it shall not amend its certificate of incorporation or bylaws; (C) it shall not split, combine or reclassify its outstanding shares of capital stock; (D) 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 the quarterly dividends payable by Yankees (in an amount per share not to exceed its most recent quarterly per share dividend and with the timing of such dividend to be consistent with past practice) or, subject to Section 4.1(a)(viii) of the Yankees Disclosure Letter, dividends payable by its direct or indirect wholly owned Subsidiaries to it or another of its direct or indirectly wholly owned Subsidiaries; and (E) it shall not repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge any interests or otherwise encumber shares of its capital stock, as applicable, or any securities convertible into or exchangeable or exercisable for any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents stock;
(including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (iiiii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or neither it nor any of its Subsidiaries shall (includingA) issue, without limitationsell, pledge, dispose of or encumber (v) any shares of, or (w) securities payable in, convertible into or exchangeable or exercisable for, or (x) options, warrants, calls, commitments or rights of any kind to acquire, capital stock of any class, as appropriate, or (y) any bonds, debentures, notes or other equity interests 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 matter or any other property or assets other than Yankees Shares issuable pursuant to stock-based awards outstanding on or awarded prior to the date hereof under the Yankees Stock Plans; (B) (1) increase the amount of net indebtedness for borrowed money, including any guarantee of such indebtedness, by $100,000,000 in excess of the Company net indebtedness set forth in the Yankees Financial Statement as of December 31, 2012 (it being understood that net indebtedness shall be calculated as the amount of debt less the sum of the amount of cash and marketable securities, in each case, set forth in the Yankees Financial Statements as of December 31, 2012; it being further understood that notwithstanding the amount set forth in such Yankees Financial Statements, the non-U.S. dollar-denominated portion of such calculation shall be determined using the exchange rates in effect as of the date hereof without regard to any subsequent changes in such rates) or (2) incur any additional indebtedness for borrowed money with a tenor of its Subsidiaries)greater than 90 days, including any guarantee of such indebtedness; or (iiiC) amendmake or authorize or commit for any capital expenditures, modify except for in accordance with the 2013 capital expenditure target for Yankees that has been provided to Braves prior to the date of this Agreement or waive such other capital expenditures targets as may be agreed by Yankees and Braves (provided that (1) Yankees shall be permitted to make or authorize or commit for any term of any outstanding security of the Company or any capital expenditures in an amount that is between 75% and 110% of its Subsidiariescapital expenditure target and (2) if the Effective Time shall not have occurred on or prior to December 31, 2013, then, for purposes of this Section 4.1(a)(iii), Yankees’s capital expenditure target will be adjusted upwards to take into account the number of days between December 31, 2013 and the Effective Time and assuming that the 2014 capital expenditure target shall be equal to the 2013 capital expenditure target);
(iv) except (A) as required by this Agreementpursuant to existing written, (B) as binding agreements in effect prior to the date hereof and set forth in Section 5.01(b4.1(a)(iv) of the Company Yankees Disclosure ScheduleLetter, in connection with accelerating the vesting schedules of the Options to the extent or as otherwise required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sellapplicable Law, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company Yankees nor any of its Subsidiaries shall (iA) grant or agree provide any severance or termination payments or benefits to any director, officer or employee of Yankees or any of its Subsidiaries, (B) increase in any manner the compensation compensation, bonus, pension, welfare, fringe, severance or other benefits of of, pay any current bonus to, or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into make any new or materially amend any existing Contract, transaction, commitment or arrangement with equity awards to any current or former director, officer, employee or affiliate consultant of the Company Yankees or any of its SubsidiariesSubsidiaries (other than increases in base salary in the ordinary course of business for employees who are not officers), (C) become a party to, establish, adopt, commence participation in, amend or terminate any stock option plan or other stock-based compensation plan, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Scheduleany compensation, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (includingseverance, without limitationpension, Section 2.02 hereof)retirement, become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminateprofit-sharing, or pay any benefit that is not required bywelfare benefit, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan agreement with or policy for the benefit of any current or former directordirectors, officer officers, employees or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any consultants of Yankees or its Subsidiaries to(or newly hired employees) or amend the terms of any outstanding equity-based awards, (xD) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (E) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any collective bargaining agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person with a labor union, works council or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedulesimilar organization, (iiF) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor change any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization actuarial or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary assumptions used to calculate funding obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures any Benefit Plan or other planned capital expenditures other than to change the manner in which contributions to such plans are made or the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of basis on which such types and in such amounts as contributions are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereofdetermined, except as may be required as a result by GAAP, (G) terminate without cause the employment of a change in applicable Law or in GAAP;
(n) any member of the Company shall not, and shall not permit any management committee of its Subsidiaries to, takeYankees, or agree (H) forgive any loans or commit issue any loans to takedirectors, any action that would, officers or is reasonably likely to, make any representation or warranty employees of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company Yankees or any of its Subsidiaries;
(pv) neither Yankees nor any of its Subsidiaries shall lease, license, transfer, exchange or swap, mortgage (including securitizations), or otherwise dispose (whether by way of merger, consolidation, sale of stock or assets, or otherwise) of any material portion of its assets, including the Company capital stock of Subsidiaries (it being understood that the foregoing shall not prohibit the sale of inventory in the ordinary course of business), except for (i) use its commercially reasonable efforts to, and shall cause dispositions of assets that in total have an aggregate fair market value of less than $50,000,000;
(vi) neither Yankees nor any of its Subsidiaries shall (A) acquire or invest in or agree to use their respective commercially reasonable efforts toacquire or invest in (whether by merger, consolidation, purchase or otherwise) any Person or assets, in which the expected gross expenditures and commitments (including the amount of any indebtedness assumed) (I) for all such acquisitions exceeds, in the aggregate, $50,000,000 or (II) is reasonably likely, individually or in the aggregate, to delay the satisfaction of the conditions set forth in Article V hereof or prevent the termination satisfaction of such conditions or (B) enter into any Contract joint venture, partnership or similar agreement with any Significant CustomerPerson;
(vii) subject to Section 4.13, neither Yankees nor any of its Subsidiaries shall (A) settle or compromise 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 Yankees or its Subsidiaries of $60,000,000 (provided that Yankees shall consult in good faith with respect to any such proposed settlement or compromise individually in excess of $20,000,000) or more or would involve any admission of material wrongdoing or any material conduct requirement or restriction by Yankees or its Subsidiaries, (iiB) not, and shall cause its Subsidiaries not tomodify, amend or terminate in any material respect any of its Material Contracts or waive, release or assign any material rights or claims thereunder in excess of $10,000,000 individually or in the aggregate or (C) enter into any new clearing services agreement or arrangement or modify or amend in any material respect any existing clearing services agreement or arrangement to extend the term or to increase the commitments of Yankees or any of its subsidiaries thereunder;
(viii) except to the extent otherwise required by Law, neither Yankees nor any of its Subsidiaries shall (A) make or change any Tax election, change any method of Tax accounting, file any amended Tax Return, or settle or compromise any audit or proceeding relating to Taxes, in each case, if such action would reasonably be expected to have an adverse effect on Yankees and its Subsidiaries that is material; (B) take any action specified in Section 4.1(a)(viii)(B) of the Yankees Disclosure Letter; or (C) permit any material 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;
(ix) neither Yankees nor any of its Subsidiaries shall permit any change in its financial 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 financial accounting principles, policies or practices shall be required by changes in GAAP;
(x) neither Yankees nor any of its Subsidiaries shall enter into any Contract with any Significant Customer, other than on terms substantially equivalent to, that includes a “non-compete,” exclusivity or more beneficial on balance to similar provision that would materially restrict the Company business of Braves or any of its Subsidiaries than(including Yankees and its Subsidiaries) following the Effective Time;
(xi) except as permitted pursuant to Section 4.1(a)(iv), the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or neither Yankees nor any of its Subsidiaries resulting shall enter into any Contract between itself, on the one hand, and any of its employees, officers or directors, on the other hand;
(xii) neither Yankees nor any of its Subsidiaries shall knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from such amendment, modification qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xiii) neither Yankees nor any of its Subsidiaries will authorize or supplement enter into an agreement to do any of the foregoing set forth in Section 4.1(a)(i) through Section 4.1(a)(xii) if Yankees would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in be prohibited by the aggregateterms of Section 4.1(a)(i) through Section 4.1(a)(xii) from doing the foregoing; and
(qxiv) it shall not fail to make in a timely manner any filings with the Company SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder.
(b) Braves covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, unless Yankees shall nototherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in Section 4.1(a) of the Braves Disclosure Letter:
(i) (A) it shall not split, combine or reclassify its outstanding shares of capital stock; (B) it shall not declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any of its capital stock; and (C) it shall not directly or indirectly repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries toto purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, if such repurchase or acquisition is at a price above the then market value;
(ii) it shall not issue, sell, dispose of or grant, or authorize the issuance, sale, disposition or grant of, any shares of any class of its capital stock except (A) for fair market value or (B) upon the vesting of restricted stock units or the exercise of options, warrants, convertible securities or other rights of any kind to acquire any of its capital stock which were issued with an exercise or conversion price of not less than the market price at the time of issuance; provided, however, that the foregoing shall not prohibit issuances of common stock, restricted stock units, options or rights as part of normal employee compensation in the ordinary course of business; and provided, further, that this clause (B) shall not prohibit the issuance of capital stock, restricted stock units, options, warrants, convertible securities or other rights in connection with any equity financing contemplated by Braves in connection with the transactions contemplated by this Agreement;
(iii) it shall not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(iv) neither it nor any of its Subsidiaries shall knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) neither Braves nor any of its Subsidiaries shall acquire (other than with respect to any agreements entered into prior to the date of this Agreement) or agree to acquire (whether by merger, consolidation, purchase or commit otherwise, which have been previously publically disclosed or provided to Yankees) any Person or assets that is reasonably likely, individually or in the aggregate, to delay in any material respects the satisfaction of the conditions set forth in Article V hereof or prevent the satisfaction of such conditions; and
(vi) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing set forth in Section 4.1(b)(i) through Section 4.1(b)(v) if it would be prohibited by the terms of Section 4.1(b)(i) through Section 4.1(b)(v) from doing the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (NYSE Euronext), Merger Agreement (Intercontinentalexchange Inc)
Interim Operations. Except (a) The Company covenants and agrees that, from the execution of this Agreement until the Effective Time (unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)), and except (x) as otherwise expressly required, contemplated or permitted by this Agreement or Agreement, (y) as set forth in Section 5.01 7.1(a) of the Company Disclosure Schedule Letter or (z) as consented required by applicable Laws (including any Law issued in response to in writing by Parentthe COVID-19 (or SARS-CoV-2) virus), the Company covenants and agrees that during the period from the date of this Agreement shall use its reasonable best efforts to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the conduct its business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and consistent with past practice in all material respects and, to the Company and its Subsidiaries extent consistent therewith, it shall use their commercially its reasonable best efforts to preserve its business organizations substantially intact their current and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business organizations, associates and others having material business dealings with it and keep available the services of their current officers and its present employees and preserve their relationships with their material customersagents. Without limiting, suppliersand in furtherance of, licensorsthe foregoing, licenseesfrom the execution of this Agreement until the Effective Time, advertisersexcept (1) as otherwise expressly required, distributors and other material third parties having business dealings with them and contemplated or permitted by this Agreement, (2) as set forth in Section 7.1(a) of the Company Disclosure Letter or (3) as required by applicable Laws (including any Law issued in response to preserve the goodwill COVID-19 (or SARS-CoV-2) virus), the Company will not (unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)):
(i) adopt or propose any change in its certificate of their respective businessesincorporation or bylaws;
(bii) merge or consolidate the Company shall notwith any other Person or restructure, and shall not permit reorganize or completely or partially liquidate;
(iii) acquire any assets outside of the ordinary course of business consistent with past practice from any other Person for consideration in excess of $5,000,000 in any individual transaction or series of related transactions or $20,000,000 in the aggregate;
(iv) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company (other than the issuance of shares in respect of the settlement of Company Equity Awards outstanding as of the date hereof (or issued after the date hereof in accordance with the terms of this Agreement) in accordance with their terms and, as applicable, the Company Stock Plans as in effect on the date hereof or as the same may be amended in accordance with the terms of this Agreement), 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 (other than any Permitted Lien) that would be material to the Company, taken as a whole, on any assets of the Company;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person, other than advances to Company Employees in respect of travel or other related business expenses, in each case in the ordinary course of business consistent with past practice;
(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 Subsidiaries tocapital stock;
(viii) reclassify, (i) authorize for issuancesplit, issuecombine, deliversubdivide or redeem, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire or offer to redeem, pledge repurchase or otherwise encumber acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock or (other than the capital stock withholding of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options shares to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares satisfy withholding Tax obligations upon the exercise exercise, vesting or settlement of Options Company Equity Awards outstanding as of the date hereof; hereof (iior issued after the date hereof in accordance with the terms of this Agreement) repurchasein accordance with their terms and, redeem as applicable, the Company Stock Plans as in effect on the date hereof or otherwise as the same may be amended in accordance with the terms of this Agreement);
(ix) incur any indebtedness for borrowed money with an aggregate principal amount in excess of $5,000,000 or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any shares debt security of the Company;
(x) make or authorize any capital stock expenditure in excess of $5,000,000 individually or in the aggregate during any twelve (12)-month period beginning on or after the date hereof;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement other equity interests than in the ordinary course of the Company business consistent with past practice;
(xii) amend, modify, cancel or terminate any of its Subsidiaries (includingMaterial Contract, without limitation, securities exchangeable forlease or sublease, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amendcancel, modify or waive any term material debts or claims held by it or waive any material rights, in each case other than in the ordinary course of business consistent with past practice;
(xiii) amend any outstanding security material License in any material respect, or allow any such License to lapse, expire or terminate, other than (A) amendments, renewals or extensions of Licenses in the ordinary course of business consistent with past practice or (B) non-renewal or non-extension of Licenses that are not necessary to conduct the Company’s business as then conducted;
(xiv) except as expressly provided for by Section 7.12, amend, modify, terminate or cancel a material insurance policy (or reinsurance policy) or self-insurance program of the Company in effect as of the date hereof, unless, simultaneous with such termination or cancellation, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated or canceled policies for substantially similar premiums, as applicable, are in full force and effect;
(xv) make any of its Subsidiarieschanges with respect to accounting policies or procedures, except as required by GAAP or by applicable Law;
(xvi) other than with respect to Transaction Litigation, which is governed by Section 7.14(c), settle or compromise any Proceeding which would reasonably be expected to (A) as required prevent or materially delay or impair the consummation of the Mergers or the other transactions contemplated by this Agreement, (B) involve any material injunctive or equitable relief or impose material restrictions on the Company’s business, taken as set forth in Section 5.01(b) of the Company Disclosure Schedulea whole, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating involve any criminal liability or any admission of material wrongdoing or material wrongful conduct by the Options and the Stock PlansCompany;
(cxvii) (A) make, change or revoke any material Tax election, (B) enter into any settlement or compromise of any material Tax liability, (C) file any amended Tax Return with respect to any material Tax, (D) adopt or change any method of Tax accounting or Tax accounting period, (E) enter into any closing agreement relating to any material Tax, (F) agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax, (G) surrender any right to claim a material Tax refund or (H) fail to file when due (taking into account any applicable extensions) any material Tax Return required to be filed with respect to the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion a jurisdiction where the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockCompany currently files such Tax Returns;
(dxviii) other than quarterly dividends not transfer, sell, lease, license, mortgage, surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, rights, properties or businesses (including Intellectual Property Rights) with a fair market value in excess of $0.075 per Common Share declared and paid consistent with past practices5,000,000, in the Company shall notaggregate, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on except (whether in cash, stock A) for sales or other property)dispositions of obsolete assets, (B) for transfers, sales or make any other distributions in respect of, any dispositions of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases inventory in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements(C) pursuant to Contracts in effect prior to the date hereof, bonus plans and other agreements and arrangements listed (D) for non-exclusive licenses in the ordinary course of business or described in Section 5.01(e(E) for abandonments, non-renewals or non-extensions of Intellectual Property Rights that are not material to the conduct of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, Company’s business as then conducted;
(ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iiixix) except as set forth in Section 5.01(e) required pursuant to the terms of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on effect as of the date hereof, or as adopted or amended following the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside in the ordinary course of business consistent with past practice under (including approval from the Company Board or the compensation committee thereof, as applicable), (A) materially increase in any manner the compensation or consulting fees, bonus or pension or welfare benefits of any Company Employee, (B) materially reduce compensation or benefits with respect to any Company Employees, (C) grant any severance, termination, retention or change-in-control pay to any Company Employee, (D) become a party to, establish, adopt, materially amend, commence participation in or terminate any material Benefit Plan or any arrangement that would have been a material Benefit Plan had it been in existence as of the date hereof, (E) grant any new Company Equity Awards or amend or modify the terms of any outstanding Company Equity Awards, (F) take any action to accelerate the vesting, lapsing of restrictions or payment, or to fund or in any other way secure the payment, of compensation or benefits provided to any Company Employee or (G) forgive any loans or issue any loans to Company Employees;
(xx) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a trade union, labor union, works council or similar organization;
(xxi) materially amend any Privacy Policies or the operation or security of any IT Assets used in its business in any manner that is materially adverse to the Company, in each case other than as required by applicable Law;
(xxii) (A) enter into any new line of business other than any line of business in which the Company is engaged (or plans to be engaged) in as of the date of this Agreement or (B) form or acquire securities or ownership interests in a Person which would constitute its Subsidiary; or
(xxiii) agree, commit, arrange, authorize, resolve or enter into any understanding to do any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);foregoing.
(jb) Parent covenants and agrees that, from the execution of this Agreement until the Effective Time (unless the Company shall nototherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)), and except (x) as otherwise expressly required, contemplated or permitted by this Agreement, (y) as set forth in Section 7.1(b) of the Parent Disclosure Letter or (z) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), Parent shall, and shall not permit any cause each of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant use its and their reasonable best efforts to commitments prior to the date hereof or other planned capital expenditures conduct its business in the ordinary course of business consistent with past practices disclosed practice in all material respects and, to the extent consistent therewith, Parent shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to preserve its business organizations substantially intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business associates and others having material business dealings with it and keep available the services of its present employees and agents. Without limiting, and in furtherance of, the foregoing, from the execution of this Agreement until the Effective Time, except (1) as otherwise expressly required, contemplated or permitted by this Agreement, (2) as set forth in Section 5.01(j7.1(b) of the Parent Disclosure Letter or (3) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), Parent shall not, and shall cause each of its Subsidiaries not to (unless the Company Disclosure Schedule by categoryshall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)):
(i) adopt or make propose any commitments change in the certificate of incorporation or bylaws of Parent, Merger Sub or Merger Sub II;
(ii) merge or consolidate Parent, Merger Sub or Merger Sub II with respect to any other Person, other than any merger or consolidation of Parent in which Parent is the surviving Person;
(iii) completely or partially liquidate Parent, Merger Sub or Merger Sub II;
(iv) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital expenditures stock of Parent, securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other planned rights of any kind to acquire any shares of such capital expenditures stock or such convertible or exchangeable securities, in each case other than (A) the issuance of equity awards under the Parent Stock Plan in the ordinary course of business consistent with past practices practice and (B) the issuance of shares in excess respect of $500,000 the settlement of equity awards outstanding as of the date hereof (or issued after the date hereof) in accordance with their terms and, as applicable, the aggregateParent Stock Plan;
(kv) 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;
(vi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than the withholding of shares to satisfy withholding Tax obligations upon the exercise, vesting or settlement of equity awards outstanding as of the date hereof (or issued after the date hereof) under the Parent Stock Plan in accordance with their terms and, as applicable, the Parent Stock Plan); or
(vii) agree, commit, arrange, authorize, resolve or enter into any understanding to do any of the foregoing.
(c) Subject to Section 7.2(f), from the execution of this Agreement until the Effective Time, the Company shallshall not terminate, amend, modify or waive any provision of any confidentiality agreement, Standstill Agreement or similar agreement to which the Company is a party and shall use reasonable best efforts to enforce, to the fullest extent permitted under applicable Law, the provisions of any such agreement, in each case except to the extent the Company Board or the Special Committee determines in good faith after consultation with its outside legal counsel that such action or failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable Law.
(d) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s 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 Parent and the Company shall cause its Subsidiaries toexercise, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ past practicesrespective operations, if any.
(iie) use reasonable best efforts not From the date of this Agreement until the earlier to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, occur of the furniture, fixtures, equipment Effective Time and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration termination of real property leases this Agreement in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as terms set forth in Section 5.01(l) of Article IX, neither the Company Disclosure Schedulenor Parent shall, and neither the Company nor Parent shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action (except as otherwise expressly permitted by Section 7.2 or Section 7.3 of this Agreement), including proposing or undertaking any merger, consolidation or acquisition, in each case, that would, or is would reasonably likely be expected to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) , prevent or materially delay or impair the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any consummation of the foregoingMergers and the other transactions contemplated by this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (BridgeBio Pharma, Inc.), Merger Agreement (BridgeBio Pharma, Inc.)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing required by Parentapplicable Law, the Company covenants shall use its reasonable best effort to conduct its business and agrees that during of its Subsidiaries’ in the period from the date of this Agreement Ordinary Course and, to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conductedextent consistent therewith, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company it and its Subsidiaries shall use their commercially respective reasonable best efforts to preserve intact their current business organizationsorganizations intact, keep available the services of their current officers and employees and preserve their relationships with including their material Intellectual Property Rights, Company Material Contracts and other material assets, and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present officers, employees and agents, except as required by applicable Law. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the Effective Time, except as otherwise expressly (A) contemplated by this Agreement, (B) required by applicable Law, (C) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed) by Parent or (D) set forth in the corresponding subsection of Section 6.1(a) of the Company Disclosure Letter, the Company shall not and shall 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, consolidate, recapitalize, reorganize or completely or partially liquidate, dissolve or otherwise enter into any agreements or arrangements imposing material third parties having business dealings with them and to preserve the goodwill of their respective changes or restrictions on its assets, operations or businesses;
(biii) acquire, directly or indirectly (including by merger, consolidation, operation of law, or acquisition of shares, other equity interests or assets or any other business combination), any Person or any division, business, assets or properties of any other Person or make any investment in any other Person, in each case, with a fair market value or purchase price in excess of one million dollars ($1,000,000) in the aggregate in any transaction or series of related transactions, in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company shall notor Parent, as applicable, to consummate the Transactions prior to the Outside Date, other than acquisitions of inventory or other goods in the Ordinary Course pursuant to and shall not permit any in accordance with the terms of its Subsidiaries toCompany Material Contracts in effect as of the date of this Agreement, true, correct and complete copies of which have been made available to Parent prior to the date of this Agreement;
(iiv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueEncumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, Subsidiaries or any rights, warrants or options to acquire, acquire any such shares, securities or convertible securities shares or any other securities or equity equivalents (including“phantom” stock, without limitation“phantom” stock rights, stock appreciation rights or phantom interests)stock based performance units (other than the issuance of shares (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries, except for issuances (B) in respect of Common Shares upon the exercise of Company Options outstanding as of the date hereof; of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement, or (iiC) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests Company Options issued to new employees of the Company or any of its Subsidiaries in the Ordinary Course and in accordance with the Stock Plans as in effect on the date of this Agreement; provided that any Company Options issued pursuant to clause (includingC) will (w) not exceed 150,000 Company Ordinary Shares in the aggregate on a fully diluted basis, without limitation(x) have terms consistent with grant terms and amounts as Company Options granted to similarly situated employees, securities exchangeable for(y) be subject to the standard four (4) year vesting schedule as existing Company Options as of the date hereof and (z) not provide for accelerated vesting upon a termination of employment or a change in control of the Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, calls, commitments warrants or other rights of any kind to acquire, acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) make any loans, advances, guarantees or capital contributions to or investments in any Person (other equity interests of than to or from the Company or and any of its wholly owned Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating excess of one million dollars ($1,000,000) in the Options and the Stock Plansaggregate;
(cvi) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside aside, make or pay any dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiaries Subsidiary to the Company it or to any other direct or indirect wholly owned Subsidiaries of the Company consistent with past practicesSubsidiary);
(evii) neither the Company nor reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiaries shall capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, other than the withholding of Company Ordinary Shares to satisfy withholding Tax obligations upon the exercise, vesting or settlement of Company Options outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement;
(iviii) grant or agree to incur any increase in any manner Indebtedness (including the compensation or benefits issuance of any current debt securities, warrants or former director, officer or employee, except increases other rights to acquire any debt security) in excess of one million dollars ($1,000,000) in the ordinary course of business consistent aggregate;
(ix) make or authorize any payment of, or accrual or commitment for, capital expenditures other than in accordance with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in the capital expenditures budget set forth on Section 5.01(e6.1(a)(ix) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, Letter;
(iix) enter into any new Contract that would have been a Company Material Contract that is specified in clause (iii), (vi), (vii), (ix), (xi), (xv) or materially amend (xvii) in Section 4.18(a) or any existing Government Grant that would have been a Company Material Contract that is specified in clause (xix) in Section 4.18(a) had it been entered into prior to this Agreement or amend, modify, supplement, waive, terminate, assign, convey, encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any such Company Material Contract, transactionother than (1) expirations of any such Contract in the Ordinary Course in accordance with the terms of such Contract, commitment or arrangement with any current (2) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or former director, officer, employee or affiliate of other rights under Intellectual Property Rights owned by the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of each case, granted in the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofOrdinary Course;
(fxi) the Company shall notcancel, and shall not permit modify or waive any debts or claims held by it or any of its Subsidiaries toor waive any rights held by it or any of its Subsidiaries having in each case a value in excess of one million dollars ($1,000,000) in the aggregate;
(xii) (i) settle, pay, discharge or satisfy any Proceeding for an amount in excess of one million dollars (x$1,000,000) in the aggregate or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any Governmental Order that would restrict in all material respects the future activity or conduct of it or any of its Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person or (ii) institute any Proceeding by the Company or any Company Subsidiary, other than in the Ordinary Course;
(xiii) make any changes with respect to accounting policies or procedures, except as required by GAAP or any similar Law or financial accounting standard;
(xiv) enter into any new line of business, or acquire or agree business that would be material to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; consolidated operations or (y) establish that would reasonably be expected to prevent, materially delay or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside materially impair the ability of the United States and its territorial possessionsCompany to consummate the Transactions;
(gxv) the Company shall notmake, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for change or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in revoke any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries toTax election, change any of the an annual Tax accounting policiesperiod, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make adopt or change any material tax election or change an annual Tax accounting period with respect to Taxesmethod, file any amended material Tax Return, enter into any closing agreementagreement with respect to material Taxes, settle or compromise any material Tax claim, audit, assessment or liability relating to the Company or any of its Subsidiariesdispute, or surrender any right to claim a refund of a material amount of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent agree to any an extension or waiver of the limitation period applicable to any Tax claim or assessment relating statute of limitations with respect to the assessment or determination of any material Tax, or take any action which is reasonably likely to result in a material increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(xvi) transfer, sell, lease, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Encumbrance upon, any assets (tangible or intangible), product lines or businesses of it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with services provided in the Ordinary Course and sales of obsolete assets and except for sales, leases, licenses or take other dispositions of tangible assets (not including services) with a fair market value not in excess of one million dollars ($1,000,000) in the aggregate;
(xvii) cancel, abandon or otherwise allow to lapse or expire any other similar action, or omit to take any action relating Intellectual Property Rights that are material to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit businesses of the Company or any of its Subsidiaries;
(pxviii) alter the operation or security of any IT Assets owned, used or held for use in the operation of the Company and its Subsidiaries businesses in a manner that would be materially less protective of any confidential or proprietary information that is in the Company’s or any of its Subsidiaries’ possession or control, including any information stored on or processed by such IT Assets;
(xix) except as required under applicable Law or pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement and set forth in Section 6.1(a)(xix) of the Company Disclosure Letter, (A) increase the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, in each case, other than increases of up to 7.5% in the Ordinary Course in respect of any Company Employee who (i) is not a Key Employee or (ii) earns a salary, wage rate or consulting fees (as applicable) and target cash bonus opportunity that exceeds $250,000 on an annual basis (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company Benefit Plan, in each case, other than in the Ordinary Course and in accordance with the Company’s policies and procedures with respect to granting, amending or modifying awards and, with respect to grants of new awards, in accordance with Section 6.1(a)(iv), (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (E) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or materially change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (F) forgive any loans or issue any loans (other than routine travel advances issued in the Ordinary Course) to any Company Employee, (G) hire any employee or engage any independent contractor (who is a natural person) whose salary, wage rate or consulting fees (as applicable) and target cash bonus opportunity exceed $250,000 in the aggregate on an annual basis or (H) terminate the employment of any executive officer or any Company Employee who is eligible to receive payments or benefits upon a termination of employment in connection with a change in control, other than, in each case, for cause;
(xx) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar employee representative organization, other than pursuant to applicable Law or extension orders;
(xxi) cancel or fail to use commercially reasonable efforts to replace or renew any material Insurance Policies;
(xxii) take any action or fail 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
(xxiii) agree, authorize or commit to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing (i) which approval shall not be unreasonably withheld, conditioned or delayed)), except as otherwise expressly contemplated by this Agreement or required by applicable Law, Parent shall use its commercially reasonable efforts tobest effort to conduct its business and that of its Subsidiaries’ in the Ordinary Course and, to the extent consistent therewith, it and shall cause its Subsidiaries to shall use their respective commercially reasonable best efforts toto preserve their business organization intact, prevent including their material Intellectual Property Rights, material Contracts and other material assets, and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the termination services of any Contract with any Significant Customerit and its Subsidiaries; present officers, employees and agents, except as required by applicable Law. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the Effective Time, except as otherwise expressly (A) contemplated by this Agreement, (iiB) required by applicable Law, (C) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed) by the Company, (D) as set forth on the corresponding subsection of Section 6.1(b) of the Parent Disclosure Letter or (E) in connection with or required to effectuate the Stock Split, the Sale Transactions, Parent shall not, and shall cause its Subsidiaries not to:
(i) adopt or propose any change in Parent’s Organizational Documents in any manner that would prevent, amend materially delay or modify materially impair the ability of Parent to consummate the Transactions; provided, that any Contract with any Significant Customer, other than on terms substantially equivalent to, amendment to Parent’s certificate of incorporation to increase the authorized number of shares or more beneficial on balance to series of the Company capital stock of Parent shall in no way be restricted by the foregoing;
(ii) merge or consolidate itself or any of its Subsidiaries thanwith any other Person or restructure, the terms of consolidate, recapitalize, reorganize or completely or partially liquidate, dissolve, in each case, except for any such Contract prior to the making of such amendment transactions among its wholly owned Subsidiaries or modification, and any Parent Permitted Acquisitions;
(iii) notissue, and shall cause its Subsidiaries not tosell, enter intopledge, dispose of, grant, transfer, encumber, or materially amendauthorize the issuance, modify sale, pledge, disposition, grant, transfer, lease, license, guarantee or supplementEncumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any Lease or other Material Contract under which the costs or obligations shares of the Company capital stock of Parent or any of its Subsidiaries resulting from or any right, warrants or options to acquire such amendmentshares or any “phantom” stock, modification “phantom” stock rights, stock appreciation rights or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.stoc
Appears in 2 contracts
Sources: Merger Agreement (Rada Electronic Industries LTD), Merger Agreement (Leonardo DRS, Inc.)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or until termination of as provided for in this Agreement in accordance with Article 7 hereof):
(a) the business and operations Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality 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 conducted, and the books and records unreasonably withheld or delayed) 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:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) 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 material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, 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 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;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall be maintainednot prohibit entering into, only modifying or renewing the Contracts in the ordinary course of business and to the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationsextent such Contracts can be terminated after any such entering into, keep available the services modification or renewal at a cost of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesless than $200,000;
(be) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company shall not, and shall not permit or any of its Subsidiaries toon any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (iother than the Company or any direct or indirect wholly-owned Subsidiary of the Company) authorize for issuancein excess of $50,000 in the aggregate;
(g) declare, issueset aside, delivermake or pay any dividend or other distribution, sell or agree or commit to issuepayable in cash, sell or deliver (whether through the issuance or granting of optionsstock, commitments, subscriptions, rights to purchase property or otherwise), pledge or otherwise encumber with respect to any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents Subsidiaries (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem dividends paid by any direct or otherwise acquire any shares of the capital stock or other equity interests of 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 such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiaries (including, without limitation, securities exchangeable forits, or options, warrants, calls, commitments or rights of any kind to acquireits Subsidiaries, capital stock or other equity interests securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any of its Subsidiaries); debt securities or (iii) amend, modify warrants or waive other rights to acquire any term of any outstanding debt security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy indebtedness for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures borrowed money incurred in the ordinary course of business consistent with past practices disclosed (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 5.01(j6.1(j) of the Company Disclosure Schedule Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) 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 for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by categoryapplicable 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 commitments with respect new equity awards to capital expenditures any director, officer or other planned capital expenditures other than 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 practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminatedpractice , (iii) maintain all Leased Real Property (includingestablish, without limitationadopt, amend or terminate any Benefit Plan or amend the furnitureterms of any outstanding equity-based awards, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) paytake any action to accelerate the vesting or payment, prior or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the imposition of extent not already provided in any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries toBenefit Plan, (iv) materially amend change any currently existing labor actuarial or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment assumptions used to or relating calculate funding obligations with respect to any labor union, Benefit Plan or (ii) enter into any labor to change the manner in which contributions to such plans are made or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union the basis on which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereofsuch contributions are determined, except as may be required as a result of a change in applicable Law by GAAP; or in GAAP;
(nvi) the Company shall notforgive any loans to directors, and shall not permit any of its Subsidiaries to, take, officers or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance conditions to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries Merger set forth in Article VII not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; andbeing satisfied;
(q) take any action that would violate the Company shall not, and shall not CIA;
(r) knowingly take or permit any of its Subsidiaries toto take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, agree authorize or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Encore Medical Corp), Merger Agreement (Compex Technologies Inc)
Interim Operations. Except The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 6.1 of the Company Disclosure Schedule or as consented and except for the acceleration of the vesting of outstanding options to in writing purchase 26,000 Common Shares held by Parent, directors under the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereofCompany's 1997 Equity Incentive Plan):
(a) its and its Subsidiaries' businesses shall be conducted in the ordinary 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 and operations of selling any products or services materially different from existing products or services of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only or to enter into or engage in the ordinary course new lines of business and without Parent's prior written approval);
(b) to the Company extent consistent with (a) above it and its Subsidiaries shall use their commercially respective reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsreinsurers, licenseesdistributors, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bc) the Company shall not, and it shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliversell, sell pledge, dispose of or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of owned by it in any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) amend its charter or by-laws or amend, modify or terminate the New Rights Agreement; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries and other than regular quarterly dividends paid by the Company on its Common Shares not in excess of $0.11 per share and regular quarterly dividends paid by the Company on its Preferred Shares in accordance with the Company's Articles of Incorporation; or (v) repurchase, redeem or otherwise acquire acquire, except in connection with any shares of the capital stock or other equity interests of the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock;
(includingd) neither it nor any of its Subsidiaries shall (i) issue, without limitationsell, 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 equity interests property or assets (other than pursuant to exercise of the New Rights and Shares issuable pursuant to options outstanding on the date hereof under any of the Company Stock Plans or upon conversion of the Preferred Shares); (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries)) or incur or modify any material indebtedness or other liability; or (iii) amendmake or authorize or commit for any capital expenditures other than in amounts not exceeding $5 million in the aggregate or, modify by any means, make any acquisition of, or waive any term investment in, assets or stock of any outstanding security other Person or entity, including by way of the Company or any of its Subsidiariesassumption reinsurance, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent 2 million individually or $5 million in the aggregate (other than in connection with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practicesordinary course investment activities);
(e) neither the Company it nor any of its Subsidiaries shall (i) grant terminate, establish, adopt, enter into, make any new grants or agree to awards under, amend or otherwise modify, any Compensation and Benefit Plans, other than awards made in the normal course under the Management Incentive Plan in respect of 1997 performance or increase in any manner the salary, wage, bonus or other compensation or benefits of any current or former director, officer or employee, employees except increases occurring in the ordinary and usual course of business consistent with past practice, increases (which shall include normal periodic performance reviews and bonuses expressly required under existing employment agreements, bonus plans related compensation and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereofbenefit increases), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall pay, discharge, settle or satisfy any claims, liabilities or obligations (x) enter into any new line absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations legally due and payable and arising in the ordinary and usual course of business, claims arising under the terms of products, contracts or acquire or agree to acquire, including, without limitation, policies issued by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company Insurance Subsidiaries in the ordinary and usual course of business and such other claims, liabilities or obligations as shall not exceed $5 million in the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionsaggregate;
(g) the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall make or change any Tax election, (x) incursettle any material audit, assume, file any amended tax returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be responsible for canceled or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 terminated except in the aggregate other than (i) pursuant to existing contracts ordinary and commitments described in Section 5.01(g) usual course of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiariesbusiness;
(h) neither the Company it nor any of its Subsidiaries shall adopt enter into any agreement containing any provision or put into effect a plan covenant limiting in any material respect the ability of complete the Company or partial liquidationany Subsidiary or affiliate to (A) sell any products or services of or to any other person, dissolution, merger, consolidation, restructuring, recapitalization (B) engage in any line of business or other reorganization (C) compete with or to obtain products or services from any person or limiting the ability of any person to provide products or services to the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)or affiliates;
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or neither it nor any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer enter into any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof new quota share or other planned capital expenditures reinsurance transaction (A) which does not contain standard cancellation and termination provisions, (B) which, except in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of business, materially increases or reduces the Company Disclosure Schedule by category) or make any commitments with respect Insurance Subsidiaries' consolidated ratio of net written premiums to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance gross written premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (iiC) enter into any labor pursuant to which $5 million or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different more in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used gross written premiums are ceded by the Company or any of its Insurance Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any Person other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of than the Company or any of its Subsidiaries;
(pj) neither it nor any of the Company shall Insurance Subsidiaries will alter or amend in any material respect their existing investment guidelines or policies;
(ik) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or neither it nor any of its Subsidiaries than, the terms shall take any action or omit to take any action that would cause any of such Contract prior its representations and warranties herein to the making of such amendment or modification, and become untrue in any material respect; and
(iiil) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or neither it nor any of its Subsidiaries resulting from such amendment, modification will authorize or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit enter into an agreement to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (American Bankers Insurance Group Inc), Merger Agreement (Cendant Corp)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing and except as set forth in Schedule 7.1 hereof or until termination of as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(a) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective reasonable best efforts efforts, consistent with the limitations of this Article VII, to preserve its business organization substantially intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseesstrategic partners, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(c) neither it nor any of its Subsidiaries shall (includingi) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets (other than shares of Company Common Stock issuable pursuant to options outstanding on the date hereof under the Company or any of its SubsidiariesStock Plans); or (iiiii) amendtransfer, modify or waive any term of any outstanding security of the Company or any of its Subsidiarieslease, except (A) as required by this Agreementlicense, (B) as set forth in Section 5.01(b) of the Company Disclosure Scheduleguarantee, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or mortgage, pledge, dispose of, abandon, cancel, surrender or agree allow to sell, transfer lapse or pledge, expire or encumber any equity interest owned by it in any of its Subsidiaries material property or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership material assets (including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate business other than licenses of incorporation or bylaws or permit any Company Products entered into in the ordinary course of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockbusiness;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall restructure, declarerecapitalize, set aside reorganize or pay completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any dividends agreement or arrangement imposing material changes or restrictions on (whether in cashthe operation of its assets, stock product lines or other property)businesses, or make any other distributions in respect ofits interests therein, or adopt resolutions providing for or authorizing any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)foregoing;
(e) neither the Company it nor any of its Subsidiaries shall acquire (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or capital any stock or other equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries thereof, or (ii) any material assets or businesses, except purchases of inventory and raw materials in the ordinary course of business;
(f) neither it nor any of its Subsidiaries organized outside shall adopt or implement any stockholder rights plan, “poison pill” anti-takeover plan or other similar plan, device or arrangement that, in each case, is applicable to Parent or any of its Affiliates, the Agreement or any of the United States and its territorial possessionstransactions contemplated by this Agreement;
(g) the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to equipment lease borrowings in the ordinary course of business), (xii) incurissue, assume, be responsible for sell or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, amend any debt securities or options, warrants or calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of othersanother Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person Person or enter into any arrangement having the economic effect of any of the foregoing; , (iii) make any loans, advances (other than routine travel advances to employees of the Company and its Subsidiaries in the ordinary course of business, not exceeding $10,000 for any individual employee for any single trip and not exceeding $30,000 in the aggregate) or (y) sell, lease, license or subject to any Lien or otherwise dispose ofcapital contributions to, or agree to sellinvestment in, lease any other Person, other than the Company or subject to any Lien or otherwise dispose of, any of its properties direct or assets indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(h) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $25,000 individually or $50,000 100,000 in the aggregate for the Company and its Subsidiaries, taken as a whole, other than (i) pursuant as set forth in the Company’s budget for capital expenditures previously made available to existing contracts and commitments described Parent or the specific capital expenditures disclosed in Section 5.01(g7.1(h) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(hi) neither the Company it nor any of its Subsidiaries shall adopt make any material changes in accounting methods, principles or put into effect practices, except insofar as may have been required by a plan change in GAAP or, except as so required, change any assumption underlying, or method of complete or partial liquidationcalculating, dissolutionany bad debt, merger, consolidation, restructuring, recapitalization contingency or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise)reserve;
(j) the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures except in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of practice, enter into, renew, modify, amend, terminate, waive, delay the Company Disclosure Schedule by category) exercise of, release or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in assign any material respect with rights or claims under, any currently existing collective bargaining agreementCompany Material Contract; provided, memorandum or understandinghowever, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company that nothing herein shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as to (1) enter into any Contract of the date hereof, except as may be required as a result of a change type specified in applicable Law Section 5.5(a)(iii) or in GAAP;
(nxiii) (excluding Section 5.5(a)(xiii)(D) solely with respect to Company Products) to the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, extent such Contract would survive after the Effective Time or result modify or amend in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance manner adverse to the Company or any of its Subsidiaries thanany existing Contract of the type specified in Section 5.5(a)(iii) or (xiii), the terms of such Contract prior or (2) except to the making extent permitted by Section 7.2(a) of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not tothis Agreement, enter into, or materially renew, modify, amend, modify terminate, waive delay the exercise of, or supplementrelease or assign any material rights or claims under, any Lease confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(k) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) take any action with respect to, adopt, enter into, terminate or amend any employment (whether at will or otherwise), severance, change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, (iii) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (iv) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (v) grant any awards under any bonus, incentive, performance or other Material Contract compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, except for option awards to purchase Company Common Stock that the Company expects to grant to certain new hires in the ordinary course of business as specifically set forth in Section 7.1(k) of the Company Disclosure Schedule which Schedule includes the maximum number of options issuable to such new hires or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under which any Company Benefit Plan;
(l) except as otherwise contemplated by this Section 7.1, neither it nor any of its Subsidiaries shall make any written or oral communications to the costs directors, officers or obligations employees of the Company or any of its Subsidiaries resulting from pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, unless the Company provides Parent with a copy of the intended communication, Parent has a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such amendmentmutually agreeable communication;
(m) neither it nor any of its Subsidiaries shall initiate, modification settle or supplement would exceed $25,000 per annum individually compromise any material litigation, claim, grievance, charge or $100,000 per annum for all such amendmentsproceeding (other than as set forth in Section 7.1(m) of the Company Disclosure Schedule or in connection with the enforcement of the Company’s rights under this Agreement);
(n) neither it nor any of its Subsidiaries shall make or rescind any Tax election, modifications and supplements amend any Tax Return, settle or otherwise finally resolve any material tax controversy, or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the aggregateordinary and usual course of business;
(o) neither it nor any of its Subsidiaries shall 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 VIII not being satisfied; and
(qp) the Company shall not, and shall not permit neither it nor any of its Subsidiaries towill authorize any of, agree or commit commit, resolve or agree, in writing or otherwise, to do take, any of the foregoingforegoing actions.
Appears in 2 contracts
Sources: Merger Agreement (Computer Associates International Inc), Merger Agreement (Niku Corp)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of on the Company Disclosure Schedule or as consented agreed to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, conducted only in the ordinary course of business and the Company and its Subsidiaries subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiariessubsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, including without limitation, limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of on the date hereof; , or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiariessubsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries material subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiariessubsidiaries, (ii) amend or otherwise change its certificate of incorporation the Company Certificate or bylaws Company Bylaws or permit any of its Subsidiaries subsidiaries to amend its articles certificate of incorporation, bylaws or bylaws equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries subsidiaries to the Company or with respect to other wholly owned Subsidiaries of the Company consistent with past practicescapital stock);
(e) neither the Company nor any of its Subsidiaries subsidiaries shall (i) grant or agree to any material increase in any manner the compensation or fringe benefits of of, or pay any bonus to, any current or former director, officer or employee, employee except increases in the ordinary course of business consistent with past practice, for increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule arrangements, and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Option Plans, (ii) enter into any new or materially amend any existing Contractemployment, transaction, commitment severance or arrangement termination agreement with any current current, prospective or former director, officer, officer or employee or affiliate of the Company or any of its SubsidiariesCompany, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan employee benefit plan that was not in existence on the date hereof or amend or amend, modify or terminate, or pay terminate any benefit that is not required by, any Benefit Plan Company plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof, (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock), except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Option Plans and except for the payment of the employer match under the Company’s 401(k) plan;
(f) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing all or substantially all the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof thereof, other than acquisitions purchases of assets in the ordinary course of business consistent with past practice and not in excess of $50,000 in any one instance or purchases made with $250,000 in the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionsaggregate;
(g) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of, any of its properties or assets other than (xi) properties or assets not in excess of $25,000 in one instance or $250,000 in the aggregate, (ii) inventory in the ordinary course of business consistent with past practice, (iii) nonexclusive licenses granted by the Company in the ordinary course of business to customers for such customers’ use of the Company’s products and services and (iv) liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with generally accepted accounting principles;
(h) the Company shall not, and shall not permit any of its subsidiaries to, incur, assume, be responsible for assume or pre-pay any Indebtedness, indebtedness for borrowed money or enter into any agreement to, to incur, assume, be responsible for assume or pre-pay any Indebtednessindebtedness for borrowed money, or guarantee, or agree to guarantee, any such Indebtedness indebtedness or Liabilities or obligations obligation of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, (i) enter intomake or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or materially amendinvestments in, modify any person or supplement entity, other than loans between or among the Company and any Contract outside of its wholly-owned subsidiaries and cash advances to the Company’s or any such subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise)practice;
(j) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, authorize assume, guarantee or make otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any capital expenditures (other than pursuant to commitments prior to Person, except for the date hereof or other planned capital expenditures in obligations of the ordinary course of business consistent with past practices disclosed in Section 5.01(j) subsidiaries of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregatepermitted under this Agreement;
(k) the Company shall, and shall cause its Subsidiaries to, subsidiaries (i) shall continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s past practices and its Subsidiaries’ past practices, (ii) use reasonable best efforts shall not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, establish or acquire (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any subsidiary other agreement or commitment to or relating to any labor union, than wholly-owned subsidiaries or (ii) subsidiaries organized outside of the United States and its territorial possessions;
(m) the Company shall not, and shall not permit any of its subsidiaries to, amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except (i) as required by this Agreement, (ii) in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Option Plans or the agreements pursuant to which such Options were granted, and (iii) in connection with terminating the Options and the Stock Option Plans;
(n) the Company shall not, and shall not permit any of its subsidiaries to, enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreementunion, memorandum or understanding, grievance settlement or commitment, except, in each case, except as required by Law;
(mo) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, settle or compromise any pending or threatened suit, action, claim or litigation (except in the ordinary course of business), the settlement or compromise of which would result in payments by the Company in excess of $25,000;
(p) the Company shall not, and shall not permit any of its subsidiaries to, change any of the material accounting policies, practices or procedures (including tax material Tax accounting policies, practices and procedures) used by the Company or any of and its Subsidiaries subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAPUnited States generally accepted accounting principles;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, make or change any material tax election, make or change any material method of accounting with respect to Taxes except as may be required as a result of a change in applicable Law, settle or compromise any material tax liability or file any material amended Tax Return;
(r) the Company shall not, and shall not permit any of its subsidiaries to, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (i) the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice or (ii) the payment of the Company’s Expenses (as defined herein), including the payment of the fees and expenses of the Special Committee and the costs, fees and expenses incurred by the Special Committee, which shall not exceed in the aggregate $5,000,000;
(s) the Company shall not, and shall not permit any of its subsidiaries to, transfer or license to any third party or otherwise amend or modify in any material respect any contract relating to Company Intellectual Property other than the grant in the ordinary course of business of non-exclusive licenses to customers in connection with the sale of Company Products;
(t) except as set forth in Section 5.01(t) of the Company Disclosure Schedule, the Company shall not have amended the Rights Plan in any manner without the prior consent of Parent; and
(u) the Company shall not, and shall not permit any of its subsidiaries to, agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Infousa Inc), Merger Agreement (Onesource Information Services Inc)
Interim Operations. Except The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld or delayed, and except as otherwise expressly set forth in or contemplated by this Agreement or as set forth in described on Section 5.01 7.1 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereofSchedule):
(a) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseesstrategic partners, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(c) neither it nor any of its Subsidiaries shall (includingi) authorize, without limitationissue, 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 (including but not limited to any “rights or poison pill” agreement) to acquire, any shares of its capital stock of any class, or any Voting Debt or any other equity interests property or assets (other than shares of Company Common Stock and associated rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business, except for such transactions conducted in the ordinary course of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock’ business;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall restructure, declarerecapitalize, set aside reorganize or pay completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any dividends agreement or arrangement imposing material changes or restrictions on (whether in cash, stock the operation of its assets or other property), businesses or make any other distributions in respect of, adopt resolutions providing for or authorizing any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)foregoing;
(e) neither the Company it nor any of its Subsidiaries shall acquire (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or capital any stock or other equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries thereof, or (ii) Subsidiaries organized outside any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the United States and its territorial possessionsordinary course of business (or as permitted by Section 7.1(g));
(gf) the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, (xii) incurissue, assume, be responsible for sell or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, amend any debt securities or options, warrants or calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of othersanother Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person Person or enter into any arrangement having the economic effect of any of the foregoing; , (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or (y) sell, lease, license or subject to any Lien or otherwise dispose ofcapital contributions to, or agree to sellinvestment in, lease any other Person, other than the Company or subject to any Lien or otherwise dispose of, any of its properties direct or assets indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $25,000 individually or $50,000 500,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among for the Company and the Company’s its Subsidiaries, taken as a whole;
(h) neither the Company it nor any of its Subsidiaries shall adopt make any material changes in accounting methods, principles or put into effect practices, except insofar as may have been required by a plan change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of complete or partial liquidationcalculating, dissolutionany bad debt, merger, consolidation, restructuring, recapitalization contingency or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)reserve;
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of practice, enter into, renew, modify, amend, terminate, waive, delay the Company Disclosure Schedule by category) exercise of, release or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in assign any material respect with rights or claims under, any currently existing collective bargaining agreementCompany Material Contract or Company Lease; provided, memorandum or understandingthat, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company nothing herein shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as to (i) enter into any Contract of the date hereof, except as may be required as a result of a change type specified in applicable Law or in GAAP;
(nSection 5.5(a)(iii) to the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, extent such Contract would survive after the Effective Time or result modify or amend in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance manner adverse to the Company or any of its Subsidiaries than, any existing Contract of the terms of such Contract prior type specified in Section 5.5(a)(iii) or (ii) except to the making extent permitted by Section 7.2(a) of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not tothis Agreement, enter into, or materially renew, modify, amend, modify terminate, waive, delay the exercise of, or supplementrelease or assign any material rights or claims under, any Lease confidentiality, standstill or other Material Contract under similar agreement to which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendmentis bound by or subject;
(j) neither it nor any of its Subsidiaries shall, modification except as required to comply with applicable Law, any express provision of this Agreement, or supplement would exceed $25,000 per annum individually agreements, plans or $100,000 per annum arrangements existing on the date hereof, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance, change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan for all such amendmentsthe benefit or welfare of any current or former director, modifications and supplements officer, employee or consultant or any collective bargaining agreement, (ii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant (except for annual increases of salaries of Persons who are not officers in the aggregateordinary course of business that do not exceed 3.5%), (iii) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (iv) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder;
(k) neither it nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any matters reported as “Legal Proceedings” in any Company SEC Reports, or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement);
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated in each case except in a manner consistent with past practice or as required by applicable Law;
(m) neither it nor any of its Subsidiaries shall 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 VIII not being satisfied; and
(qn) the Company shall not, and shall not permit neither it nor any of its Subsidiaries towill authorize any of, agree or commit commit, resolve or agree, in writing or otherwise, to do take, any of the foregoingforegoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 2 contracts
Sources: Merger Agreement (Netopia Inc), Merger Agreement (Netopia Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as for matters (w) set forth in Section 5.01 of the Company Disclosure Schedule or as consented 5.01, (x) expressly agreed to in writing by ParentBuyer (or, prior to the Joinder Date, the Company covenants and agrees that Administrative Agent acting at the direction of the Required Lenders) (such consent not to be unreasonably withheld, conditioned or delayed), (y) ordered by the Bankruptcy Court or (z) otherwise contemplated by the terms of this Agreement, during the period from Interim Period, Seller shall operate the date Assets in all material respects in the ordinary course in a manner substantially consistent with past practice and shall use its best efforts to preserve the value, use, ownership and operation of the Assets, taken as a whole. In addition, except as (a) set forth in Schedule 5.01, (b) ordered by the Bankruptcy Court or (c) otherwise contemplated by the terms of this Agreement Agreement, Seller shall not do (or permit any Purchased Entity to do) any of the following in connection with the Assets without the prior written consent of Buyer (or, prior to the Effective Time (or until termination Joinder Date, the Administrative Agent acting at the direction of this Agreement in accordance with Article 7 hereofthe Required Lenders):
(a) the business and operations subject any of the Company and its Subsidiaries shall be conductedAssets (or any asset of any Purchased Entity) to any Lien (other than Assumed Encumbrances);
(b) sell, and the books and records lease, license, pledge, cancel, abandon, permit to lapse or otherwise dispose of the Company and its Subsidiaries shall be maintainedany Asset (or any asset of any Purchased Entity), only except sales of Hydrocarbons in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required contemplated by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans5.15;
(c) the Company shall not (i) sellterminate or extend, transfer waive, modify, rescind or pledgemake any material amendments to any Assigned Contract or waive, release or agree to sellassign any material rights or claims thereunder, transfer or pledge, any equity interest owned by it in any each case outside of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership ordinary course of any of its Subsidiariesbusiness, (ii) amend make any assignment to BOEM/BSEE or otherwise change its certificate any other Governmental Authority or Person of incorporation any indemnification, contribution or bylaws other similar right to payment or permit reimbursement from third parties with respect to any of its Subsidiaries Liabilities relating to amend its articles of incorporation, decommissioning or bylaws plugging and abandonment or (iii) split, combine or reclassify take any shares of its capital stock, and shall not permit action that would reasonably be expected to have a material adverse effect on the expected benefits to Buyer from any of its Subsidiaries to split, combine or reclassify any shares of its capital stockAssigned Contract;
(d) initiate, settle or compromise any material action, suit, litigation or other proceeding involving the Assets (or any asset of any Purchased Entity), other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)trade claims;
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former directoralter, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect whether through a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization reorganization or in any other reorganization manner, the legal structure or ownership of the Company itself, any Purchased Entity or any joint venture or similar arrangement to which Seller or any Purchased Entity is a party which is an Asset (or an asset of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)Purchased Entity) hereunder;
(if) voluntarily incur any Assumed Obligations, except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) business, or make or agree to make any commitments capital expenditures with respect to the Assets (or any asset of any Purchased Entity), other than capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to may be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject required pursuant to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries Contract obligations as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(ng) the Company shall notissue any capital stock, and shall not permit equity interest, option, warrant, subscription, call, exchange right or other right to purchase equity of any of its Subsidiaries to, takePurchased Entity, or agree issue any obligations convertible into or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate exchangeable for equity in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;Purchased Entity; or
(oh) the Company shall notagree, and shall not permit any of its Subsidiaries towhether in writing or otherwise, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Asset Purchase Agreement, Asset Purchase Agreement (Atp Oil & Gas Corp)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Merger Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed), and except as otherwise contemplated by this Agreement (including the Shrimp Business Divestiture) or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):Letter:
(ai) it shall operate the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and business, consistent with past practice, and, to the Company and extent consistent with such operation, use its Subsidiaries shall use their commercially reasonable best efforts to to: (A) preserve intact their current the present business organizations, keep available the services of their current officers organization intact; and employees and (B) preserve their all beneficial business relationships with their material all customers, suppliers, licensors, licensees, advertisers, distributors employees and other material third parties others having business dealings with them the business of it and to preserve the goodwill of their respective businessesits Subsidiaries;
(bii) it shall maintain (A) the material assets of the Company shall notin such condition and repair consistent with past practice, and (B) insurance upon all of the material assets of the Company and with respect to the conduct of the business of the Company in full force and effect, comparable in amount, scope, and coverage to that in effect on the date of this Agreement;
(iii) it shall not (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries; or (E) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(iv) neither it nor any of its Subsidiaries shall (includingA) issue, without limitationsell, 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, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stockstock of any class or any Company Voting Debt; (B) grant or sell any option or right to purchase the assets of the Company, and shall not permit except regarding non-material assets in the ordinary course of business, consistent with past practice; or (C) subject any of its Subsidiaries the assets of the Company to splitany further material lien, combine charge, mortgage, pledge, security interest or reclassify any shares similar encumbrance (each, an "Encumbrance"), other than (i) as reflected, reserved or otherwise disclosed in the financial statements included in or incorporated by reference in the Company Reports and (ii) in the ordinary course of its capital stockbusiness, consistent with past practice;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(ev) neither the Company it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans or pay or promise to pay, any bonus, profit-sharing or special compensation to the Employees or make any increase in the compensation payable or to become payable to any of such employees, except (i) grant or agree for changes that are required by applicable law, (ii) to any increase in any manner satisfy obligations under the compensation or benefits terms of any current agreement or former directorplan in effect as of the date hereof, officer (iii) for increases in compensation that are made in the ordinary course of business consistent with past practice (which shall include normal periodic performance reviews and related compensation and benefit increases) and (iv) for employment arrangements for or employeegrants of awards to, newly hired employees in the ordinary course of business consistent with past practice;
(vi) except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company it nor any of its Subsidiaries shall adopt enter into or put into effect a plan of complete terminate any Company Contract, or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or make any change in any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)Company Contracts;
(ivii) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or neither it nor any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof tax election or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as a beneficiary or loss loss-payable payee to be canceled or terminatedterminated without prior notice to Parent, (iii) maintain all Leased Real Property (including, without limitation, except in the furniture, fixtures, equipment ordinary and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration usual course of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithbusiness;
(lviii) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor shall settle or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in compromise any material respect with claims or litigation or, except in the ordinary and usual course of business, waive, release or assign any currently existing collective bargaining agreement, memorandum material rights or understanding, grievance settlement or commitment, except, in each case, as required by Law;claims; and
(mix) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, change any of the accounting policies, practices shall authorize or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit an agreement to do any of the foregoing.
(b) The provisions of this Section 6.1 notwithstanding, nothing in this Agreement shall be construed or interpreted to prevent the Company or any Subsidiary from (i) making, accepting or settling intercompany advances to, from or with one another; (ii) causing any Subsidiary to pay or distribute to the Company all cash, money market instruments, bank deposits, certificates of deposit, other cash equivalents, marketable securities and other investment securities then owned or held by such Subsidiary; or (iii) engaging in any other transaction incident to the normal cash management procedures of the Company and its Subsidiaries, including, without limitation, short-term investments in bank deposits, money market instruments, time deposits, certificates of deposit and bankers' acceptances and borrowings for working capital purposes and purposes of providing additional funds to Subsidiaries made, in each case, in the ordinary course of business, consistent with past practice.
Appears in 1 contract
Sources: Merger Agreement (Baltek Corp)
Interim Operations. Except Seller covenants and agrees to, and agrees to cause each member of Subject Company Group, after the date hereof and prior to the Closing (unless Purchaser shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement (including Section 2.3 hereof) or as set forth in Section 5.01 6.7 of the Company Seller’s Disclosure Schedule or Schedule, as consented the case may be) to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement adhere to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):following:
(a) the business and operations of each member of the Subject Company and its Subsidiaries Group shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course consistent with past practices and, to the extent consistent therewith, each member of business and the Subject Company and its Subsidiaries Group shall use their its respective commercially reasonable best efforts to preserve intact their current its business organizations, keep available the services of their current officers organization and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors Employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) no member of the Subject Company Group shall not(i) issue, and shall not sell, pledge, dispose of or encumber any capital stock or other equity interests owned by it in any of the Subject Subsidiaries; (ii) amend its Organizational Documents; (iii) recapitalize, split, combine or reclassify its outstanding shares of capital stock or, in the case of the LLC, limited liability company interests; (iv) declare, set aside or pay any dividend or other distribution payable in cash, property, assets, stock, rights or other securities or property in respect of any capital stock or, in the case of the LLC, limited liability company interests; or (v) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries toto purchase or otherwise acquire, any shares of its capital stock or, in the case of the LLC, limited liability company interests, or any securities convertible into or exchangeable or exercisable for any shares of its capital stock or, in the case of the LLC, limited liability company interests;
(c) no member of the Subject Company Group shall (i) authorize for issuance, issue, deliversell, sell pledge, dispose of or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or or, in the capital stock case of any of its Subsidiariesthe LLC, any other securities limited liability company interests, or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, directly or indirectly, any shares of its capital stock or, in the case of the LLC, limited liability company interests, of any class; (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other material property or assets (including capital stock of any of their Subsidiaries) or modify in any material respect or incur any material indebtedness or other equity interests material liability, except, in each case, in the ordinary and usual course of the Company or any of its Subsidiaries)business consistent with past practices; or (iii) amendmake any commitment for, modify make or waive authorize any term capital expenditures other than in the ordinary course of business or, by any means, make any acquisition of, or investment in, the assets or stock of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockPerson;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries no member of the Subject Company consistent with past practices)Group shall settle or compromise any claims or litigation alleging any loss, injury or illness resulting from or relating to any product that has been alleged to contain asbestos or asbestos-containing material;
(e) no member of the Subject Company Group shall settle or compromise any material claims or litigation if such settlement imposes an uninsured obligation on any member of the Subject Company Group in excess of $250,000 or does not give the relevant member of the Subject Company Group a release from all material liability related to such claim; provided, however, that with respect to claims or litigation (including any Tax controversy) with respect to Taxes of any member of the Subject Company Group or with respect to the Airtex Division Assets prior to the contribution to the LLC, neither the Company Seller nor any member of its Subsidiaries the Subject Company Group shall settle or compromise any such claims or litigation, if settling such claim is reasonably expected to have an adverse effect on any member of the Subject Company Group or Purchaser in excess of $25,000 in the aggregate for all such parties (i) grant for taxable periods beginning on and after the Closing Date for AAC and W▇▇▇▇ Canada and any other member of the Subject Company Group for which a taxable period begins on the Closing Date, (ii) for taxable periods beginning after the Closing Date, in the case of Purchaser and other members of the Subject Company Group, and (iii) in the case of all members of the Subject Company Group, the portion of any Straddle Period that begins after the Closing Date;
(f) no member of the Subject Company Group shall enter into, extend, renew, terminate or agree to any increase modify or amend in any manner material respect any of the compensation Material Contracts or benefits waive, release or assign any material rights or claims, other than entering into any Material Contract of any current the type described in Sections 4.10(a)(i), (ii), (vii) or former director, officer or employee, except increases (viii) in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(epractices;
(g) neither Seller nor any member of the Subject Company Disclosure Schedule Group shall permit any insurance policy naming any member of the Subject Company Group as a beneficiary or loss-payable payee to be canceled or terminated;
(h) no member of the Subject Company Group shall (i) adopt any new Benefit Plan, make any amendment to any existing Benefit Plan which has the effect of increasing benefits under any existing Benefit Plan in any material respect, except for changes as may be required by Applicable Law and except as set forth in connection with accelerating the vesting schedules of the Options Sections 8.1(a) and terminating the Options and the Stock Plans, 8.1(e) hereof or (ii) enter into increase any new or materially amend compensation payable to any existing Contractemployee, transaction, commitment or arrangement with except for (A) normal increases in salaries in the ordinary and usual course of business payable to any current or former director, officer, employee or affiliate (B) the payment of the Company cash bonuses to employees pursuant to and consistent with existing plans or any of its Subsidiariesprograms, or and (iii) except as set forth consistent with past practices and other than employment agreements with new hires substantially in the form previously disclosed to Purchaser and scheduled on Section 5.01(e4.8(a) of the Company Seller’s Disclosure Schedule, as may be required to comply enter into, amend in any material respect or terminate any employment, severance, termination, non-competition, non-solicitation or confidentiality or similar agreement with applicable Law and as provided any of its present or otherwise contemplated in this Agreement (includingfuture employees, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof officers or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofdirectors;
(fi) make any Tax election, if the election pertains to any member of the Subject Company Group or the Airtex Division Assets prior to the contribution to the LLC, if doing so would be reasonably expected to have an adverse effect on any member of the Subject Company Group or Purchaser in excess of $25,000 in the aggregate for all such parties (i) for taxable periods beginning on and after the Closing Date for AAC and W▇▇▇▇ Canada and any other member of the Subject Company Group for which a taxable period begins on the Closing Date, (ii) for taxable periods beginning after the Closing Date, in the case of Purchaser and other members of the Subject Company Group, and (iii) in the case of all members of the Subject Company Group, the portion of any Straddle Period that begins after the Closing Date;
(j) no member of the Subject Company Group shall make a material change in its accounting methods, practices or procedures, except as maybe required by Applicable Law or U.S. GAAP;
(k) the Subject Company Group shall not, (i) make capital expenditures in the ordinary course of business and (ii) make the Neapco Capital Expenditures required to be made in the ordinary course of business prior to Closing;
(l) no member of the Subject Company Group shall not permit knowingly take any action or omit to take any action that would cause any of its Subsidiaries torepresentations and warranties herein to become untrue in any material respect;
(m) no member of the Subject Company Group shall fail, in any material respect, to pay its accounts payable in accordance with its customary business practices or take any action to materially accelerate the collection of accounts receivable outside of the ordinary course of business consistent with past practices;
(xn) enter into Seller shall not (i) subject to any new line Encumbrances (other than Permitted Encumbrances) any of businessthe properties, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests ofsecurities of any member of the Subject Company Group, (ii) permit any member of the Subject Company Group to enter into or by agree to enter into any merger or consolidation with any corporation or other mannerentity, (iii) permit any business or member of the Subject Company Group to purchase substantially all of the assets of any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guaranteethereof, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor permit any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization member of the Subject Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company Group to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant loans to commitments prior any Person, except for advances of expenses to the date hereof or other planned capital expenditures employees in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfiedbusiness;
(o) the Company shall notExcept for this Agreement, prior to Closing Seller shall, and shall not permit any cause each member of its Subsidiaries the Subject Company Group to, make terminate, with no further obligation whatsoever on behalf of any member of the Subject Company Group, each contract or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle whether written or compromise any Tax claimoral, assessment or liability relating to between the Company Seller or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) Affiliate of the Company Disclosure Schedule, consent to any extension or waiver Seller (other than a member of the limitation period applicable to any Tax claim or assessment relating to the Subject Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if Group) and such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit member of the Subject Company or any of its SubsidiariesGroup;
(p) no member of the Subject Group Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries factor or assign as collateral to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, financing source accounts receivable other than on terms substantially equivalent to, or more beneficial on balance the factoring of receivables by Airetx (Spain) pursuant to the Company or any of its Subsidiaries than, the terms of such Contract prior Airtex (Spain) Factoring Agreements in an amount not to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate2 million; and
(q) the Company Seller shall not, and shall not permit any no member of its Subsidiaries tothe Subject Company Group shall, agree authorize or commit enter into an agreement to do any of the foregoing.
Appears in 1 contract
Sources: Purchase Agreement (Chefford Master Manufacturing Co Inc)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, delayed or conditioned)), and except as otherwise expressly contemplated or expressly permitted by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing required by Parentapplicable Law, the Company covenants and agrees that during the period from the date business of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in all material respects in the ordinary course of business and and, to the extent consistent with the foregoing, the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve intact their current business organizationsorganizations substantially intact, maintain satisfactory relationships with Governmental Entities, customers and suppliers having significant business dealings with them and keep available the services of their current officers key employees; provided that any action specifically permitted by clauses (i)-(xix) of this Section 6.1(a) shall be deemed in compliance with this sentence. In furtherance of the foregoing, from the date of this Agreement until the Effective Time, except (w) as otherwise contemplated or permitted by this Agreement, (x) as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), (y) as is required by applicable Law or any Governmental Entity or (z) as set forth in Section 6.1(a) of the Company Disclosure Letter, the Company will not and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and will not permit its Subsidiaries to:
(i) adopt any change in its certificate of incorporation or bylaws or other material third parties having business dealings with them and to preserve the goodwill of their respective businessesapplicable governing documents;
(bii) merge or consolidate the Company shall not, and shall not permit or any of its Subsidiaries towith any other Person, except for any such transactions among wholly owned Subsidiaries of the Company;
(iiii) make any acquisition of any business or any assets, other than acquisitions of assets acquired from the Company’s vendors in the ordinary course of business of the Company and its Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber or authorize for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueencumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, or securities convertible or exchangeable forinto or exercisable for any shares of such capital stock, or any options, warrants, calls, commitments warrants or other rights of any kind to acquire, acquire any shares of such capital stock or such convertible or exchangeable securities (other equity interests than (A) in respect of Company Options, RSUs and PSUs outstanding as of the date of this Agreement in accordance with their terms or (B) the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company);
(v) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned United States Subsidiary of the Company;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary of the Company and (B) regular quarterly dividends declared and paid at such time and in such amounts as is reasonably consistent with the Company’s historical practice; provided that in no event shall such regular quarterly dividend exceed $0.225 per Share) 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 redeem, purchase or otherwise acquire any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (iii) amend, modify other than the retention or waive any term acquisition of any outstanding Shares tendered by current or former employees or directors in order to pay the exercise price of any Company Options or Taxes in connection with the exercise or vesting of Company Options, RSUs or PSUs);
(viii) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other 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 indebtedness incurred in the ordinary course of business in an aggregate principal amount not to exceed $5,000,000 outstanding at any time that may be repaid at any time without penalty;
(ix) make any material changes with respect to financial accounting policies or procedures, except as required by GAAP;
(x) except as with respect to Transaction Litigation, which shall be governed by Section 6.15, and appraisal litigation which shall be governed by Section 4.2(f), settle any litigation or other proceedings before a Governmental Entity if such settlement (A) as required with respect to the payment of monetary damages, involves the payment of monetary damages that exceed $2,000,000 individually or $10,000,000 in the aggregate during any calendar year, net of any amount covered by this Agreement, insurance or indemnification or (B) as set forth in Section 5.01(b) with respect to any non-monetary terms and conditions therein, imposes or requires actions that would have a material effect on the continuing operations of the Company Disclosure Scheduleor its Subsidiaries;
(xi) (A) make or change any material Tax election; (B) settle, in connection with accelerating the vesting schedules of the Options consent to the extent required by the Stock Plans or the agreements pursuant compromise any material Tax claim or assessment or surrender a right to which such Options were granted or a material Tax refund; (C) in connection consent to any extension or waiver of any limitation period with terminating the Options and the Stock Plansrespect to any material Tax claim or assessment; (D) file an amended Tax Return; (E) enter into a closing agreement with any Governmental Entity regarding any material Tax; or (F) change any method of tax accounting;
(cxii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, rights, operations, product lines or businesses of the Company shall not (i) sellor its Subsidiaries, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws other than Permitted Liens or (iiiA) splittransactions solely among the Company and/or its wholly owned Subsidiaries that would not result in a material increase in the Tax liability of the Company and its Subsidiaries, combine (B) licenses to customers and resellers in the ordinary course of business with respect to any Intellectual Property, (C) transactions involving the sales, leases, licenses or reclassify any shares other dispositions of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
assets (d) other than quarterly dividends pursuant to clause (B)) with a fair market value not in excess of $0.075 per Common Share declared and paid 1,000,000 individually or $5,000,000 in the aggregate or (D) pursuant to Contracts in effect as of the date of this Agreement;
(xiii) (A) other than as required pursuant to the terms of any Benefit Plan in effect on the date hereof, as required by applicable Law or in the ordinary course of business consistent with past practices, the Company shall not, and shall not permit any practice for employees of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or its Subsidiaries who hold a position of vice president or below and have an annual base salary below $200,000 (“Non-Management Employees”): (1) enter into or amend any agreement providing compensation or benefits to any Service Provider, except for amendments that do not materially increase compensation or benefits, (2) enter into, adopt, amend, modify or terminate any compensation or benefit plans (other wholly owned Subsidiaries than routine amendments or renewals to health and welfare plans (other than severance plans) that do not materially increase benefits or result in materially increased costs), (3) increase the benefits or compensation provided to any current or former Service Provider except for salary and/or target bonus opportunity increases granted in connection with and corresponding to any promotion or job change (to the extent that such increases are in the ordinary course of the Company business and consistent with past practicespractice) and (B) other than as required by applicable Law or as required pursuant to the terms of any Benefit Plan in effect on the date hereof: (1) discretionarily accelerate the vesting or payment of any cash or equity award held by any former or current Service Provider; (2) hire or engage the services of any individual who is expected to hold a position of vice president or above and have an annual base salary equal to or above $200,000 (each, a “Management Employee”) other than any individual replacing a former employee who was a Management Employee (but who is not an executive officer); (3) take any action to fund or secure the payment of any amounts under any Benefit Plan; (4) 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, other than as required by GAAP; (5) loan or advance any money or other property to any Service Provider, other than routine advances for business expenses in the ordinary course of business or (6) pay any severance in excess of what is legally required (it being understood that any exceptions under this Section 6.1(a)(xiii) will not apply to any actions otherwise prohibited by Section 6.1(a)(iv);
(exiv) neither adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated with Parent after giving effect to Parent’s rights under Section 6.2(g);
(xv) enter into any Contract which would limit (i) the incurrence of indebtedness or (ii) the declaration and payment of the dividends in respect of the Shares, RSUs and PSUs pursuant to Section 6.1(a)(vi) by the Company nor or its Subsidiaries;
(xvi) except as required by applicable Law or GAAP, (A) revalue in any material respect any of its Subsidiaries shall properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (iB) grant or agree to make any increase material change in any manner of its accounting principles or practices;
(xvii) (A) incur or commit to incur any capital expenditures other than (1) capital expenditures not to exceed $35,000,000 in the compensation aggregate during any six month period from July 1, 2015 to Closing; or benefits (2) pursuant to obligations imposed by Material Contracts, in the case of any current or former directorthis clause (2), officer or employee, except increases to the extent that such capital expenditures do not exceed $5,000,000 individually; (B) other than in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreementsenter into, bonus plans and other agreements and arrangements listed modify, amend or described terminate any Material Contract; (C) maintain insurance at less than current levels or otherwise in Section 5.01(ea manner inconsistent with past practice; (D) of the Company Disclosure Schedule and except engage in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plansany transaction with, (ii) or enter into any new agreement, arrangement or materially amend understanding with, any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate Affiliate of the Company or any other Person covered by Item 404 of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of Regulation S-K promulgated by the Company Disclosure Schedule, as may SEC that would be required to comply with applicable Law and be disclosed pursuant to Item 404; (E) effectuate a “plant closing,” “mass layoff” (each as provided or otherwise contemplated defined in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan WARN) or other employee benefit plan layoff event affecting in whole or in part any agreementsite of employment, arrangementfacility, plan operating unit or policy for employee; (F) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the benefit ordinary course of business; or (G) waive or release any current or former director, officer or employee material claim other than in existence on the date hereofordinary course of business;
(fxviii) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, propose or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);reorganization; or
(ixix) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries toagree, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(b) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s 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 Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless SBC shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement Agreement, disclosed in accordance with Article 7 hereofthe Company Disclosure Letter or required by applicable Law):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially all reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsregulators, licenseesdistributors, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) it shall not (A) amend its certificate of incorporation or by-laws or amend, modify or terminate the Rights Agreement; provided, however, that nothing in this Agreement shall prevent the Company from reducing below 20% the beneficial ownership threshold in the definition of an Acquiring Person (as defined in the Rights Agreement) or extending the Final Expiration Date of the Rights Agreement (as defined therein) or adopting a new rights agreement having substantially similar terms as the Rights Agreement and not inconsistent with (x) this proviso, (y)Section 5.1(o) (assuming references therein are to such a new rights agreement) or (z) the transactions contemplated by this Agreement; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock, other than regular quarterly cash dividends in amounts consistent with its past practice or rights to purchase Company shall notShares or Company Preference Shares pursuant to any successor agreement to the Rights Agreement, and shall not adopted in accordance with the terms of this Agreement; or (D) repurchase, redeem or otherwise acquire or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber except in open market transactions in connection with the Company Stock Plans, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, but subject to the Company's obligations under subparagraph (iii) below.
(iii) neither it nor any of its Subsidiaries shall knowingly take any action that would prevent the Merger from qualifying for "pooling of interests" accounting treatment or as a "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties herein to become untrue in any material respect;
(iv) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards of stock-based compensation or other benefits under, amend or otherwise modify, any Company Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any directors, officers or key employees except (A) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Company Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice, (B) in the normal and usual course of business (which shall include normal periodic performance reviews and related Company Compensation and Benefit Plan increases and the provision of individual Company Compensation and Benefit Plans consistent with past practice for promoted or newly hired officers and employees and the adoption of Company Compensation and Benefit Plans for employees of new Subsidiaries in amounts and on terms consistent with past practice); provided, that in no event shall it institute a broad based change in compensation, unless it shall have used its reasonable best efforts to provide SBC with prior notice of any such change or, if the Company was unable to provide such prior notice, the Company shall provide SBC with notice as soon as practicable following any such change, or (C) for actions necessary to satisfy existing contractual obligations under Company Compensation and Benefit Plans existing as of the date hereof;
(v) neither it nor any of its Subsidiaries shall issue any Company Preferred Shares or Company Preference Shares or incur any indebtedness for borrowed money or guarantee any such indebtedness if it should reasonably anticipate that after such incurrence any of its or any of its Subsidiaries' outstanding senior indebtedness would be rated A or lower by Standard & Poor's;
(vi) neither it nor any of its Subsidiaries shall make any capital expenditures in any period of twelve consecutive months following the date hereof in an aggregate amount in excess of 150% of the aggregate amount reflected in the Company's capital expenditure budget for such year, a copy of which has been provided to SBC;
(vii) neither it nor any of its Subsidiaries shall transfer, lease, license, sell, mortgage, pledge, encumber or otherwise dispose of any of its or its Subsidiaries property or assets (including capital stock of any of its Subsidiaries) with a fair market value in excess of $1 billion in the aggregate in any period of twelve consecutive months following the date hereof except for transfers, leases, licenses, sales, mortgages, pledges, encumbrances, or other dispositions in the ordinary course of business consistent with past practice;
(viii) neither it nor any other securities of its Subsidiaries shall issue, deliver, sell, or encumber shares of any class of its common stock or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares except, (A) any such shares issued pursuant to options and other awards outstanding on the date hereof under the Company Stock Plans, awards of options and other awards granted hereafter under the Company Stock Plans in accordance with this Agreement and shares issuable pursuant to such awards, and (B) up to an aggregate amount of $3.6 billion of such shares, securities securities, rights, warrants or convertible securities or any other securities or equity equivalents options (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding valued at their fair market value as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock agreement to make such acquisition) in any period of twelve consecutive months following the date hereof to fund, in whole or other equity interests in part, the cost of the Company any acquisition or any acquisitions permitted under clause (ix) below following reasonable notice to SBC of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind intention to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which take such Options were granted or (C) in connection with terminating the Options and the Stock Plansaction;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(eix) neither the Company it nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets spend in excess of $25,000 individually or $50,000 3.6 billion in the aggregate other than in any period of twelve consecutive months following the date hereof to acquire any business, whether by merger, consolidation, purchase of property or assets or otherwise (i) pursuant to existing contracts and commitments described in Section 5.01(g) valuing any non-cash consideration at its fair market value as of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) date of the Company Disclosure Scheduleagreement for such acquisition); provided, (iii) Permitted Liensthat no such acquisition would prevent, (iv) Liens relating materially delay or materially impair its ability to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established consummate the transactions contemplated by this Agreement. Notwithstanding the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) foregoing, neither the Company it nor any of its Subsidiaries shall adopt or put into effect a plan acquire any business the acquisition of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization which would subject SBC and its Subsidiaries following the consummation of the Company Merger to any Commercial Mobile Radio Service spectrum aggregation limit restriction pursuant to the provisions of 47 C.F.R. Section 20.6 or any of place SBC and its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) following the consummation of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations Merger in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) violation of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company Cellular Cross Ownership limits contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.47 C.F.R.
Appears in 1 contract
Interim Operations. (a) Except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 5.01 5.1 of the Company Disclosure Schedule Schedule, or as consented agreed to in writing by ParentPurchaser (which agreement shall not be unreasonably withheld, delayed or conditioned), the Company covenants and agrees that during the period from the date of this Agreement Stockholder covenant and agree that, prior to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):Closing:
(ab) the The business and operations of the Company and its the Company Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships consistent with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessespast practice;
(bc) the The Company shall, and shall cause each Company Subsidiary to, use its commercially reasonable efforts to keep intact its rights, properties and assets, and employee, independent contractor, supplier, customer and other business relationships;
(d) The Company shall, and shall cause each Company Subsidiary to, use its commercially reasonable efforts to keep and maintain its rights, properties and assets in their present condition, repair and working order, except for normal depreciation and wear and tear;
(e) The Company shall not, and shall not permit any of its Subsidiaries Company Subsidiary to, (i) authorize for issuance, issue, deliver, sell sell, grant options, warrants or rights to receive, purchase or subscribe for, or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries Company Subsidiary (including, without limitation, including securities exchangeable forconvertible into, or options, warrants, calls, commitments rights or rights of any kind options to acquire, capital stock or other equity interests of the Company or any Company Subsidiary), (ii) repurchase, redeem or otherwise acquire any shares of its Subsidiaries); capital stock or (iii) amend, modify or waive any term of any outstanding security other equity interests of the Company or any of its SubsidiariesCompany Subsidiary (including securities convertible into, except (A) as required by this Agreementor rights or options to acquire, (B) as set forth in Section 5.01(b) capital stock or other equity interests of the Company Disclosure Scheduleor any Company Subsidiary), in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (iiiii) amend or otherwise change its certificate of incorporation or bylaws (or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockequivalent organizational documents);
(df) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the The Company shall not, and shall not permit any of its Subsidiaries Company Subsidiary to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, including by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by in any other manner, any business or any corporation, partnership, association or other business organization or division thereof thereof, or make any capital expenditures or commitments in an amount in excess of One Hundred Thousand Dollars ($100,000) in the aggregate, other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionspursuant to existing agreements;
(g) the The Company shall not, and shall not permit any of its Subsidiaries Company Subsidiary to, (xi) incurincrease in any manner the compensation or fringe benefits of, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement bonus to, incurany current or former director, assumemanager, be responsible for officer, employee or pre-independent contractor, other than (A) increases and bonuses expressly contemplated by or required under existing employment or consulting agreements or bonus plans, and (B) increases in compensation to employees in the ordinary course of business consistent with past practice, (ii) except as required to comply with applicable Law, become obligated under any Benefit Plan that was not in existence on the date of this Agreement or amend, modify or terminate any Benefit Plan in existence on the date of this Agreement, or (iii) except as required to comply with applicable Law, pay any Indebtednessbenefit not required by any Benefit Plan as in effect as of the date of this Agreement;
(h) The Company shall not, guaranteeand shall not permit any Company Subsidiary to, sell, lease, license, subject to any Lien (other than a Permitted Lien) or otherwise encumber or dispose of (including through any sale-leaseback or similar transaction) any of its properties or assets, other than (i) pursuant to existing agreements, (ii) immaterial properties or assets (or immaterial portions of properties or assets), or agree to guarantee(iii) in the ordinary course of business consistent with past practice;
(i) The Company shall not, and shall not permit any Company Subsidiary to, (i) make or forgive any loans, advances or capital contributions to, or investments in, any such Indebtedness or Liabilities or obligations Person, other than trade accounts receivable incurred in the ordinary course of another person, issue or sell, or agree business consistent with past practice and cash advances to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities employees of the Company or any and the Company Subsidiaries for reimbursable travel and other business expenses incurred in the ordinary course of its Subsidiariesbusiness consistent with past practice, (ii) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Indebtedness or other obligations of any debt securities of othersother Person, or (iii) enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s SubsidiariesPerson;
(hj) neither the The Company nor shall not, and shall not permit any of its Subsidiaries shall Company Subsidiary to, adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)Company Subsidiary;
(ik) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the The Company shall not, and shall not permit any of its Subsidiaries Company Subsidiary to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or practice, any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), Material Contract or (ii) waive, release, grant, assign, modify assign or transfer any of its material rights or claims (whether such rights or claims arise under a Material Contract or otherwise);
(jl) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the The Company shall, and shall cause its the Company Subsidiaries to, (i) continue comply in force all material respects with its obligations under the Material Contracts as such obligations become due, (ii) maintain insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, and (iiiii) use commercially reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated;
(m) The Company shall not abandon, fail to maintain or allow to expire (iii) maintain all Leased Real Property (includingother than at the natural expiration of its terms), without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject or sell or exclusively license to any casualty Person, any material Company Intellectual Property, except in the exercise of commercially reasonable business judgment consistent with industry practices;
(n) The Company shall not fail to pay or condemnation and Permitted Liens, subject to satisfy when due any material Liability of the expiration of real property leases in accordance with their terms, and Company (iv) pay, prior to the imposition of other than any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them Liability that is being contested in good faith);
(lo) except as set forth in Section 5.01(lThe Company shall not settle or compromise any Action pending before any Governmental Authority, or any other material Action, against the Company;
(p) of the Company Disclosure Schedule, the The Company shall not, and shall not permit any of its Subsidiaries Company Subsidiary to, (i) materially amend change any currently existing labor material accounting policies, practices or collective bargaining agreementprocedures (including material Tax accounting policies, memorandum practices and procedures), except as required by changes in applicable Law or understandingGAAP, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different revalue in any material respect with any currently existing collective bargaining agreementof its assets (including writing down or writing off any notes or accounts receivable in any material manner), memorandum or understanding, grievance settlement or commitment, except, in each case, except as required by changes in GAAP, (iii) make or change any material Tax election (including any election under Section 338 of the Code or other similar election), make or change any material method of accounting with respect to Taxes except as required by changes in applicable Law;, (iv) settle or compromise any material Tax liability (except to the extent permitted by Section 5.8(f)), (v) file any amended Tax Return that would materially increase the Tax Liability of the Company or any Company Subsidiary after the Closing, (vi) file any Tax Return in any jurisdiction in which the Company or any Company Subsidiary previously did not file Tax Returns, or (vii) waive the statute of limitations or extend the period for the assessment or collection with respect to any Tax or Tax Return of the Company or any Company Subsidiary; and
(mq) the The Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries Subsidiary to, agree or commit to do take any of the foregoingforegoing actions prohibited by this Section 5.1. Notwithstanding anything to the contrary set forth in this Agreement, the parties acknowledge and agree that neither Purchaser nor its affiliates have the right to control or direct the Company’s or any Company Subsidiary’s operations prior to the Closing. Prior to the Closing, the Company and each Company Subsidiary shall exercise, consistent with the terms of this Agreement, complete control and supervision over its operations.
Appears in 1 contract
Sources: Stock Purchase Agreement (Amn Healthcare Services Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, or except as otherwise expressly contemplated by this Agreement Agreement, the Stock Option Agreement, disclosed in accordance with Article 7 hereofthe Company Disclosure Letter or required by applicable Law):
(ai) the The business and operations of the Company it and its Subsidiaries shall be conductedconducted in the ordinary and usual course and, and to the books and records of the Company extent consistent therewith, it and its Subsidiaries shall be maintaineduse their reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, only suppliers, regulators, distributors, creditors, lessors, licensors and licensees, employees and business associates;
(ii) It shall not: (A) amend its certificate of incorporation or bylaws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than regular quarterly cash dividends not in excess of $.225 per Company Share; or (D) repurchase, redeem or otherwise acquire, except in connection with commitments under or the express terms of the Company Stock Plans as in effect on the date of this Agreement but subject to the Company's obligations under subparagraph (iii) below, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(iii) Neither it nor any of its Subsidiaries shall take any action that would prevent the Merger from qualifying for "pooling-of-interests" accounting treatment in accordance with the requirements of APB No. 16 or as a "re▇▇▇▇▇▇▇▇▇▇on" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties in this Agreement to become untrue in any material respect;
(iv) Neither it nor any of its ERISA Affiliates shall: (A) make any contribution to the Company Benefits Protection Trust (the "Rabbi Trust") in excess of $5,000,000; (B) accelerate, amend or change the period of exerciseability of or terminate, establish, adopt, enter into, increase, make any new grants or awards of stock-based compensation or other benefits under any Compensation and Benefit Plans; (C) amend or otherwise modify or increase the benefits under any Compensation and Benefit Plans; or (D) increase the salary, wage, bonus or other cash compensation of any directors, officers or key employees, in the case of (B), (C) and (D), except for actions necessary to satisfy existing contractual obligations under Compensation and Benefit Plans existing as of the date of this Agreement and in the case of (D) except in the ordinary course of business and consistent with past practice and neither it nor any of its ERISA Affiliates shall take any actions that would or could have the effect of any of the foregoing; provided, however, that after the date of this Agreement and prior to the Effective Time, the Company and its Subsidiaries shall use their commercially reasonable best efforts may (I) establish a transition retention program which provides non-equity based retention incentives (not to preserve intact their current business organizationsexceed a maximum value of $20,000,000 in the aggregate), keep available the services criteria for which, including the criteria for the timing of their current officers and employees and preserve their relationships with their material customerspayments thereunder, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them are reviewed in advance by Parent; (II) make new grants or awards of stock-based compensation to the extent permitted under Section 6.1(a)(vii); (III) take actions to appoint the Administrative Committee under the Rabbi Trust and to preserve establish reasonable compensation for members of the goodwill Administrative Committee who are not employees of their respective businessesthe Company or its affiliates for services rendered as members of the Administrative Committee; and (IV) in the event that the Effective Time has not occurred prior to the next regularly scheduled meeting of the Company's shareholders and provided that the amendment would not prevent the Merger from qualifying for pooling-of-interest accounting treatment in accordance with APB No. 16, to seek approval from the Company's shareholders of an amendment to the 1997 Company Long-Term Incentive Plan to provide for the issuance of additional shares of Company Common Stock for grants and awards in the ordinary course of business and consistent with past practice as described in Section 6.1(a)(vii);
(bv) the Company shall not, and shall not permit Neither it nor any of its Subsidiaries toshall incur, repay or retire prior to maturity or refinance prior to maturity any indebtedness for borrowed money or guarantee any such indebtedness or issue, sell, repurchase or redeem prior to maturity any debt securities or warrants or rights to acquire any debt securities or guarantee any debt securities of others, in all such cases in excess of, in the aggregate, $500,000,000;
(ivi) authorize Neither it nor any of its Subsidiaries shall make any capital expenditures in an aggregate amount in excess of the aggregate amount reflected in the Company's capital expenditure budget for issuance, the applicable fiscal year;
(vii) Neither it nor any of its Subsidiaries shall issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)sell, pledge or otherwise encumber shares of any shares class of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable exchangeable into, or any rights, warrants or options to acquire, or any bonds, debentures, notes or other debt obligations having the right to vote or convertible into or exercisable for any such shares, securities or convertible securities or any other securities or equity equivalents (includingprovided, without limitationhowever, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of that the Company or may award equity-based compensation under the Company Stock Plans provided such awards are made in the ordinary course of business and are consistent (including the value of such awards, determined on an individual basis) with past practices;
(viii) Neither it nor any of its Subsidiaries (includingshall consummate, without limitationauthorize, securities exchangeable forpropose or announce an intention to authorize or propose, or optionsenter into an agreement with respect to, warrantsany merger, callsconsolidation, commitments joint venture or rights business combination (other than the Merger), or any purchase, sale, lease, license or other acquisition or disposition of any kind to acquirebusiness or of a material amount of assets or securities except (in the case of assets) for transactions entered into in the ordinary and usual course of its business;
(ix) It shall not make any material change in its accounting policies or procedures, capital stock other than any such change that is required by GAAP;
(x) It shall not release, assign, settle or other equity interests of the Company compromise any material claims or litigation or make any material tax election or settle or compromise any material federal, state, local or foreign tax liability; and
(xi) Neither it nor any of its Subsidiaries); Subsidiaries shall authorize or (iii) amend, modify or waive enter into any term of agreement to do any outstanding security of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval shall not be unreasonably withheld or any of its Subsidiariesdelayed, or except (A) as required otherwise expressly contemplated by this Agreement, disclosed in the Parent Disclosure Letter or required by applicable Law):
(i) It shall not: (A) reclassify its outstanding shares of capital stock; or (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether dividend payable in cash, stock (other than Parent Common Stock) or other property)property in respect of any capital stock, except (x) for regular quarterly cash dividends not in excess of $.87 per share of Parent Common Stock, or make any other distributions in respect of, any of its capital stock (except y) for dividends paid a dividend that would be received by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries holders of the Company consistent with past practices)Common Stock on an equivalent basis per share of Parent Common Stock after the Effective Time;
(eii) neither the Company Neither it nor any of its Subsidiaries shall (i) grant take any action that would prevent the Merger from qualifying for "pooling-of-interest" accounting treatment in accordance with the requirements of APB No. 16 or agree to any increase in any manner as a "re▇▇▇▇▇▇▇▇▇▇on" within the compensation or benefits meaning of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e368(a) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new Code or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or that would cause any of its Subsidiaries, or representations and warranties in this Agreement to become untrue in any material respect;
(iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and It shall not permit any make acquisitions of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person businesses or enter into any arrangement having the economic effect joint ventures, except for acquisitions of any businesses or joint ventures engaged in businesses of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described type listed in Section 5.01(g6.1(b)(iii) of the Company Parent Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) Letter. If Parent seeks the consent of the Company Disclosure Schedule)to make other acquisitions of businesses or enter into other joint ventures, (iii) Permitted Liensthe decision whether to grant such consent shall be made solely by the Company's Chief Executive Officer, who shall treat any information provided to him in connection with the request confidentially and shall not share such information, or the fact of the request, with any other Person; provided, however, that the Company's Chief Executive Officer may share such information, and disclose the fact of the request, with such of the Company's outside legal advisors as are reasonably necessary to enable the Chief Executive Officer to make an informed decision with respect to the requested consent.
(iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company Neither it nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(c) Parent and the Company agree that any written approval obtained under this Section 6.1 must be signed by the Chief Executive Officer or Chief Financial Officer if signing for Parent and by the Chief Executive Officer if signing for the Company.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by ParentIn furtherance of, and without limiting, the Company covenants and agrees that during the period foregoing Section 6.2, from the date of this Agreement to until the Effective Time Time, except (w) as otherwise expressly contemplated by this Agreement, (x) as expressly required by applicable Law, (y) as Parent may approve in writing (which approval shall not be unreasonably withheld, conditioned or until termination delayed) or (z) as set forth in Section 6.3 of this Agreement in accordance the MLP Disclosure Letter, each of the MLP Entities (and with Article 7 hereof):respect to Section 6.3(a) below, GP Holdings) will not and will not permit any of MLP’s Subsidiaries to, and GP Holdings will not permit any MLP Group Entity to, directly or indirectly:
(a) (i) issue (including issuing any certificate in connection therewith), grant, sell or otherwise permit to become outstanding, or authorize the business and operations of creation of, any additional Equity Interests (whether “phantom” or otherwise) or any additional Rights, including transactions between or among the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesMLP Group Entities or (ii) certificate any existing Partnership Interests;
(b) the Company shall not(i) split, and shall not permit combine or reclassify any of its Subsidiaries to, (i) Equity Interests or issue or authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through propose the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities in respect of, in lieu of or any securities convertible or exercisable intoin substitution for its Equity Interests, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporationpurchase, redeem or bylaws otherwise acquire any membership, partnership or other Equity Securities or (iii) split, combine or reclassify enter into any shares Contract with respect to the voting of its capital stock, and shall not permit any of its Subsidiaries to split, combine Partnership Interests or reclassify any shares of its capital stockother Equity Securities;
(dc) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant sell, transfer, lease, or agree to otherwise dispose of, or encumber all or any increase in any manner the compensation portion of its assets, business or benefits of any current or former director, officer or employeeproperties, except increases for (A) sales, transfers and dispositions of obsolete or worthless equipment, (B) sales, transfers and dispositions of inventory and produced hydrocarbons in the ordinary course of business or (C) sales, transfers, assignments, conveyances, abandonment, allowances to lapse, licenses, sublicenses, covenants not to assert or other disposals of Intellectual Property in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into acquire, by merger or otherwise, or lease any new assets or materially amend securities or all or any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate portion of the Company business or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit property of any current or former directorother Person, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, other than (x) enter into any new line acquisitions of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) goods and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets services in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under and (y) acquisitions pursuant to which the Company aggregate value exchanged or purchase price paid or payable by any MLP Group Entity would not exceed $2,000,000 in the aggregate, (iii) merge, consolidate or enter into any other business combination transaction with any Person or (iv) convert from any one form of business entity to any other form of business entity;
(d) make or declare dividends or distributions to the Unitholders or holders of Phantom Units (whether in cash, assets, stock or other securities of any MLP Group Entity or of any other Person), other than (i) regular quarterly cash distributions to the Unitholders and holders of Phantom Units declared and made in accordance with and subject to the limitations of Annex VI of the MLP Disclosure Letter and (ii) a one-time cash distribution to the Unitholders and holders of Phantom Units declared in accordance with and subject to the limitation of Annex VI of the MLP Disclosure Letter and made in accordance with the provisions of this Agreement;
(e) amend any MLP Charter Document, the MLP GP LLC Agreement or any similar governing document of any of the MLP Group Entities;
(f) (i) enter into any Contract that would have been an MLP Material Contract if in effect on the date of this Agreement, (ii) amend any Contract in existence on the date hereof that is not a Material Contract on the date hereof if, after giving effect to such amendment, it would be an MLP Material Contract or (iii) become a party to, establish or adopt any collective bargaining, union, labor or similar Contract;
(g) materially modify or amend, or waive or assign any material rights under, or terminate or assign, any MLP Material Contract;
(i) waive, release or assign its Subsidiaries shall have rights with respect to any Proceeding in which any of the MLP Group Entities are seeking monetary obligations damages in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), 2,000,000 or (ii) waivecompromise, release, grant, assign, modify settle or transfer agree to settle any Proceeding in which damages are being sought against any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall notMLP Group Entities, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof compromises, settlements or other planned capital expenditures agreements in the ordinary course of business consistent with past practice that (A) involve only the payment of monetary damages not in excess of $5,000,000 individually or $10,000,000 in the aggregate and (B) do not involve any imposition of equitable relief on, or any admission of wrongdoing or, in the context of any actual or potential violation of any Criminal Law, any nolo contendere or similar plea by, any MLP Group Entity;
(i) (i) implement or adopt any change in its GAAP accounting principles, practices disclosed or methods, other than as may be required by GAAP or SEC rules and regulations or (ii) write up, write down or write off the book value of any assets, except in Section 5.01(jaccordance with GAAP consistently applied;
(j) fail to use reasonable best efforts to maintain, with financially responsible insurance companies, insurance in such amounts and against such risks and losses as is maintained by it on the date of the Company Disclosure Schedule by categorythis Agreement;
(k) (i) change in any material respect any of its express or make deemed elections relating to Taxes, including elections for any commitments with respect to capital expenditures and all Subsidiaries or other planned capital expenditures investments where it has the capacity to make such binding election, (ii) settle or compromise any material Proceeding relating to Taxes or (iii) change in any material respect any of its methods of reporting income or deductions for federal income Tax purposes from those employed in the preparation of its federal income Tax Return for the most recent taxable year for which a return has been filed, except as may be required by applicable Law;
(l) except as expressly required by the terms of any MLP Benefit Plan as in effect on the date hereof, (i) other than in the ordinary course of business consistent with past practices practice, increase or accelerate the payment or vesting of the compensation, benefits or rights payable to or accrued for, or to become payable to or accrued for, any current or former employee, officer, individual manager or director of any MLP Group Entity or any of their beneficiaries, (ii) other than in the ordinary course of business consistent with past practice, grant any severance or termination pay to any employee, officer, individual manager or director of any MLP Group Entity, (iii) establish, adopt, enter into, amend or terminate any MLP Benefit Plan, (iv) other than in the ordinary course of business consistent with past practice, grant, pay, award or accelerate the vesting of, or commit to grant, pay, award or accelerate the vesting of, any bonuses or incentive compensation, any equity-based awards or any other compensation, (v) fund any rabbi trust or similar Contract, (vi) other than in the ordinary course of business consistent with past practice, terminate the employment or services of any officer or other employee whose target annual base compensation is greater than $100,000, other than for cause, (vii) forgive any loans of any current or former employee, manager, officer, director or consultant of any MLP Group Entity or GP Holdings, (viii) hire any officer, employee, independent contractor or consultant whose target annual base compensation is greater than $200,000 or (ix) enter into or modify or amend any indemnification or similar Contract with any current or former employee, individual manager, officer or director;
(m) (i) (A) incur, assume, guarantee or otherwise become liable, directly, contingently or otherwise, for any (1) Indebtedness under clause (a), (b) or (e) of the definition of Indebtedness (other than any borrowing or draws under existing revolving credit facilities in the ordinary course of business consistent with past practice), (2) Indebtedness under clause (c) of the definition of Indebtedness (other than standby letters of credit for collateral support) or (3) Indebtedness under clause (d) of the definition of Indebtedness, if in excess of $500,000 in the aggregate;
5,000,000 or (kB) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit prepay or repurchase any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, Indebtedness prior to the imposition of any Lien or material penalty all taxesstated maturity thereof, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor material lease (whether operating or collective bargaining agreementcapital), memorandum (iii) create any Lien (other than Permitted Liens) on its property or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any property of its Subsidiaries toin connection with any pre-existing Indebtedness, change new Indebtedness or lease, (iv) make or commit to make any capital expenditures, other than such capital expenditures as are required on an emergency basis or for the safety of individuals, assets or the environment, (v) issue or sell any debt securities or warrants or other rights to acquire any debt security of any MLP Group Entity, (vi) enter into any “keep well” or other Contract to maintain any financial statement condition of another Person or (vii) enter into any Contract having the economic effect of any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAPforegoing;
(n) the Company shall notrestructure, and shall not permit reorganize or liquidate all or a material part of any MLP Group Entity’s assets or authorize, recommend, propose or announce an intention to adopt a plan of its Subsidiaries complete or partial dissolution or liquidation;
(o) make any loans, advances or capital contributions to, takeor investments in, any Person, other than (i) travel, relocation expenses and similar expenses or agree advances to its employees in the ordinary course of business consistent with past practice and (ii) trade credit granted in the ordinary course of business consistent with past practice;
(p) enter into any new Contract to sell propylene, produced hydrocarbons or commit other substances other than in the ordinary course of business consistent with past practice;
(q) implement or otherwise enter into any derivative security with respect to takehydrocarbon production or marketing or enter into any Derivative Transaction;
(r) (i) engage in the production of any chemical, petrochemical or produced hydrocarbon other than those produced in the ordinary course of business consistent with past practice or (ii) materially deviate from the operating practices or production schedule of the Facility, including implementing or announcing any plant closing, material reduction in labor force or other material layoff of employees or service providers;
(s) take any action that would, is intended or is would reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or be expected to result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from VII not being satisfied;
(ot) convene any meeting, special or otherwise (or any adjournment or postponement thereof), of the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, Unitholders;
(u) enter into any closing agreement, settle transactions or compromise Contracts with any Tax claim, assessment Affiliate or liability relating other Person that would be required to the Company or any be disclosed by MLP under Item 404 of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) Regulation S-K of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its SubsidiariesSEC;
(pv) conduct the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination businesses of any Contract with MLP Group Entity in a manner that would cause any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance MLP Group Entity to become an “investment company” subject to registration under the Investment Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregateAct; andor
(qw) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any anything prohibited by clauses (a) through (v) of the foregoingthis Section 6.3.
Appears in 1 contract
Sources: Merger Agreement (PetroLogistics LP)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, during the Effective Period, except (i) as otherwise expressly required or contemplated by this Agreement or the Restructuring Term Sheet, (ii) as set forth in Section 5.01 of required by applicable Law (including the Company Disclosure Schedule Bankruptcy Code) or (iii) as consented to in writing by Parentthe DIP Agent (which consent shall not be unreasonably withheld, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time conditioned or delayed), (or until termination of this Agreement in accordance with Article 7 hereof):
(ax) the business and operations of the Company and its Subsidiaries Business shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary course of business consistent with past practice and in accordance with applicable Law and (y) the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve intact the Business and their current business organizations, keep available the services of their current officers and employees and preserve their relationships relationship with their material customers, suppliers, licensorsdistributors, licenseeswholesalers, advertisersretailers, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;Governmental Entities.
(b) Without limiting the Company shall notgenerality of, and shall not permit any of its Subsidiaries toin furtherance of, (i) authorize for issuancethe foregoing, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through during the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its SubsidiariesEffective Period, except (Ax) as otherwise expressly required or contemplated by this Agreement or the Restructuring Term Sheet, (y) as required by this Agreement, applicable Law (Bincluding the Bankruptcy Code) or (z) as set forth consented to in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required writing by the Stock Plans or the agreements pursuant to DIP Agent (which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company consent shall not (i) sellbe unreasonably withheld, transfer conditioned or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practicesdelayed), the Company shall not, and shall not permit any of its Subsidiaries to, declaredirectly or indirectly:
(i) amend the certificate of incorporation, set aside or pay any dividends on (whether in cash, stock bylaws or other property), or make any other distributions in respect of, any organizational documents of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new merge or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of consolidate the Company or any of its SubsidiariesSubsidiaries with any other Person, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedulerestructure, as may be required to comply with applicable Law and as provided reorganize or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof completely or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of partially liquidate the Company or any of its Subsidiaries, guarantee any debt securities of others, Subsidiaries or otherwise enter into any “keep well” agreements providing for the sale of their respective material assets, operations or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any business;
(iii) acquire assets outside of the foregoing; or ordinary course of business from any other Person;
(yiv) issue, sell, leasepledge, license or subject to any Lien or otherwise dispose of, grant, transfer, encumber, or agree to sellauthorize the issuance, lease sale, pledge, disposition, grant, transfer or subject to any Lien or otherwise dispose encumbrance of, any shares of its properties capital stock or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization Equity Interests of the Company or any of its Subsidiaries (other than any transaction specifically contemplated the issuance of shares by this Agreement);
(i) except as set forth in Section 5.01(i) a wholly owned Subsidiary of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock or Equity Interests, or any options, warrants or other rights of any kind to acquire any of its Subsidiariesthe foregoing;
(v) incur, create or surrender assume any right to claim a refund of TaxesEncumbrance (other than Permitted Encumbrances) on any properties or assets, except as set forth in Section 5.01(o) of the Company Disclosure Scheduletangible or intangible, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(pvi) the Company shall (iA) use its commercially reasonable efforts toincur, and shall cause its Subsidiaries to use their respective commercially reasonable efforts toassume or guarantee any Indebtedness or capitalized lease obligations or issue any debt securities or (B) make any loans, prevent the termination of any Contract with any Significant Customeradvances, (ii) not, and shall cause its Subsidiaries not to, amend guarantees or modify any Contract with any Significant Customer, other than on terms substantially equivalent capital contributions to, or more beneficial on balance investments in, any other Person;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or Equity Interests (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 or Equity Interests (other than this Agreement);
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiaries capital stock or Equity Interests or securities convertible or exchangeable into or exercisable for any of the foregoing;
(ix) except in accordance with the Budget (as defined in the DIP Orders), make or authorize any capital expenditure;
(x) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xi) other than in the ordinary course of business, cancel or terminate (other than, for the terms avoidance of such Contract prior doubt, any expiration in accordance with its terms), or modify or amend in any material respect, or waive any material rights under, any Material Contract;
(xii) make any material changes with respect to material accounting policies or procedures, except as required by changes in applicable Law or GAAP;
(xiii) settle or compromise any (A) Cause of Action (other than settlements involving only unsecured claims with an allowed amount of less than one hundred thousand dollars ($100,000)), or (B) Patent-related Cause of Action involving any of the Company Intellectual Property;
(xiv) transfer, assign, sell, lease, grant any license (other than non-exclusive licenses granted in the ordinary course of business) with respect to, or, to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which extent within the costs or obligations control of the Company or any of its Subsidiaries resulting from such amendmentSubsidiaries, modification abandon or supplement would exceed $25,000 per annum individually permit to lapse, any material Company Intellectual Property;
(xv) terminate or $100,000 per annum for all such amendments, modifications and supplements fail to renew any material Business Permit;
(xvi) other than in the aggregate; andordinary course of business, sell, pledge, dispose of, transfer or authorize the sale, pledge, disposition or transfer of any assets or properties of the Company or its Subsidiaries;
(qxvii) grant any material licenses, sublicenses, covenants not to assert or similar rights with respect to any assets or properties, whether tangible or intangible, of the Company shall notor its Subsidiaries;
(xviii) fail to use commercially reasonable efforts to maintain the Insurance Policies or to renew or replace the Insurance Policies following their termination;
(xix) except as required pursuant to the terms of any Debtor Plan in effect as of the date of this Agreement, the Approved ▇▇▇▇ or the Approved KERP, (A) increase in any manner the compensation, consulting fees, incentive, bonus, retirement, welfare, fringe or other benefits, severance or termination pay of any employee or independent contractor, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Debtor Plan or any arrangement that would have been a Debtor Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Debtor 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 Debtor Plan, (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Debtor Plan that is required by applicable Law to be funded 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, (F) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any employee, (G) hire any employee or engage any independent contractor (who is a natural person) other than the engagement of independent contractors to fill vacancies or staff currently existing or contemplated projects to the extent not currently staffed or (H) terminate the employment of any officer other than for cause other than any officer who was provided with written notice of termination prior to the date of this Agreement and who is listed on Section 7.1(b)(xix) of the Company Disclosure Letter;
(xx) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xxi) (A) change in any material respect any material method of accounting of the Company or its Subsidiaries for Tax purposes; (B) enter into any agreement with any Taxing Authority (including a “closing agreement” under Code Section 7121) with respect to any material Tax or Tax Returns of the Company or its Subsidiaries; (C) surrender a right of the Company or its Subsidiaries to a material Tax refund; (D) change an accounting period of the Company or its Subsidiaries with respect to any material Tax; (E) file an amended Tax Return; (F) change or revoke any material election with respect to Taxes; (G) make any material election with respect to Taxes that is inconsistent with past practice; (H) file any Tax Return that is inconsistent with past practice; (I) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment (other than in the ordinary course of business); or (J) take any action (or fail to take any action) that would result in a loss of any material Tax losses, credits or other attributes that may be used to reduce Tax liabilities;
(xxii) revalue any assets or properties of the Company or its Subsidiaries (including Inventory), except to the extent required by GAAP; or
(xxiii) agree, authorize or commit, in writing or otherwise, to take any of the foregoing actions.
(c) The Supporting Lenders shall not knowingly take or permit any of its their Subsidiaries to, agree to take any action that is reasonably likely to prevent or commit to do any materially impede the consummation of the foregoingTransactions.
Appears in 1 contract
Sources: Restructuring Support Agreement (Endologix Inc /De/)
Interim Operations. Except The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent will not unreasonably be withheld or delayed, and except as otherwise expressly set forth in or contemplated by this Agreement or as set forth in Section 5.01 7.1 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereofSchedule):
(a) the business and operations of the Company it and its Subsidiaries shall will be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseesstrategic partners, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company it shall not (i) issue, sell, transfer or pledge, dispose of or agree to sell, transfer or pledge, encumber any equity interest capital stock owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws by-laws (or permit any of its Subsidiaries to amend its articles of incorporationequivalent governing instruments), or bylaws or (iii) split, combine or reclassify any its outstanding shares of its capital stock, and shall not (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries, or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to splitpurchase or otherwise acquire, combine any shares of its capital stock or reclassify any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except The parties intend that the following covenants shall preserve the Company's business, finances, and operations as otherwise contemplated by this Agreement or currently conducted, and shall not be interpreted in such a manner as set forth in Section 5.01 to transfer such control of operations to Parent prior to the Company Disclosure Schedule or as consented to in writing by Parent, the Effective Time. The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination delayed in light of Parent's plans for the Company's and its Subsidiaries' business after the Closing Date, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(a) the business and operations of the Company it and its Subsidiaries Subsidiaries, including commercially reasonable efforts to bill ▇▇▇ collect accounts receivable, shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the extent consistent therewith, the Company and its Subsidiaries shall use their commercially reasonable respective best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees, and other material third parties having business dealings with them associates; provided, however, that the Company shall operate to conserve its cash and to preserve the goodwill of their respective businessescash equivalents;
(b) the Company shall not, and it shall not (i) issue, sell, pledge, dispose of, or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its or its Subsidiaries' certificate of incorporation or by-laws; (iii) split, combine, or reclassify its outstanding shares of capital stock; (iv) declare, set aside, or pay any dividend payable in cash, stock, or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) repurchase, redeem, or otherwise acquire, except in connection with the Stock Plans or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(c) neither it nor any of its Subsidiaries shall (includingi) other than upon exercise of securities outstanding on September 30, without limitation1999, issue, sell, pledge, dispose of, or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments commitments, or rights of any kind to acquire, any shares of its capital stock or other equity interests of the Company any class or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company Voting Debt or any of its Subsidiaries, except (A) as required by this Agreementother property or assets, (Bii) as set forth other than in Section 5.01(b) the ordinary and usual course of the Company Disclosure Schedulebusiness, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) transfer, lease, license, guarantee, sell, transfer or mortgage, pledge, dispose of, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in encumber any other fashion the corporate structure property or ownership assets (including capital stock of any of its Subsidiaries) or incur or modify any indebtedness or other liability, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) splitmake or authorize or commit for any capital expenditures other than pursuant to the year 1999/2000 capital appropriations/spending budgets initialed by Parent and the Company and previously delivered to Parent or (iv) by any means, combine make any acquisition of, or reclassify investment in, assets or stock of any shares of its capital stockother person or entity, other than investments in cash equivalents, and other than in the ordinary course of business, provided, however that for purposes of this Section 6.1(c), acquisitions of all or substantially all of the assets of a business shall not permit any be considered as done in the ordinary course of its Subsidiaries to split, combine or reclassify any shares business regardless of its capital stockprevious activities of the Company;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall terminate, declareestablish, set aside adopt, enter into, make any new grants or awards under, amend, or otherwise modify, any Compensation and Benefit Plans, pay or agree to pay any dividends on (whether in cashbonuses, stock or increase the salary, wage, bonus, or other property), or make compensation of any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)employees;
(e) neither the Company it nor any of its Subsidiaries shall settle or compromise any claims or litigation that, individually or in the aggregate, would have an adverse effect on the Company's financial condition equal to or in excess of $50,000, or, except in the ordinary and usual course of business, modify, amend, or terminate any of its material Contracts, waive, release, or assign any material rights or claims, or enter into any material Contracts or agreements;
(f) neither it nor any of its Subsidiaries shall make any Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated, except in the ordinary and usual course of business;
(g) neither it nor any of its Subsidiaries shall take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect;
(h) neither it nor any of its Subsidiaries shall establish, adopt, enter into, or make any new leases, capital leases, operating lease commitments, or any renewals or extensions thereof;
(i) grant neither it nor any of its Subsidiaries shall incur, authorize, or agree enter into any short-term or long-term debt;
(j) it and its Subsidiaries shall (i) maintain their respective properties and facilities, in as good working order and condition as at present, ordinary wear and tear excepted, except as would not, individually or in the aggregate, be reasonably expected to have a Company Material Adverse Effect; and (ii) perform all of their respective material obligations under material agreements relating to or affecting their respective assets, properties or rights;
(k) it and its Subsidiaries shall not: (i) guarantee any increase in indebtedness; (ii) create or assume any manner the compensation mortgage, pledge or benefits other lien or encumbrance upon any assets or properties whether now owned or hereafter acquired; (iii) sell, assign, lease, pledge or otherwise transfer or dispose of any current property or former director, officer or employee, equipment except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable acquire or otherwise being contested in good faith and as to which appropriate reserves have been established negotiate for the acquisition of (by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuringpurchase of a substantial portion of assets, recapitalization or other reorganization otherwise) any business or the start-up of the Company or any of its Subsidiaries new business; (v) commence a lawsuit other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) for routine collection of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregatebills; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.or
Appears in 1 contract
Sources: Merger Agreement (Comps Com Inc)
Interim Operations. Except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 hereby, without the prior written consent of the Company Disclosure Schedule or other parties, IDC and DWS (and DWS Delaware, as consented to applicable) shall conduct its business in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only all material respects in the ordinary course of business consistent with past practice and the Company and its Subsidiaries shall use their commercially all reasonable best efforts to to: (i) preserve intact their current its present business organizations, organization; (ii) keep available the services of their current officers its officers; (iii) maintain in effect all material foreign, federal, state and employees local licenses, permits, approvals and authorizations that are required for it to carry on its business as currently conducted or proposed to be conducted; and (iv) preserve their existing relationships with their its material customerspartners, supplierslenders, licensorssuppliers and others having material business relationships with it so that its business or prospects shall not be adversely affected in any material respect as of the Effective Time. Further, licenseesand without limiting the generality of the foregoing, advertisersand excluding those matters necessary to accomplish the Redomestication Transaction as provided in Section 6.2, distributors from the date hereof until the Effective Time, without the prior written consent of the other Parties, IDC and DWS shall not:
(a) amend its certificate of incorporation, articles or bylaws or other material third parties having business dealings with them and to preserve the goodwill of their respective businessesapplicable governing instrument;
(b) the Company shall not, and shall not permit amend any term of any of its Subsidiaries tooutstanding securities;
(c) split, (i) authorize for issuancecombine, issue, deliver, sell subdivide or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber reclassify any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on dividend or other distribution (whether in cash, stock or other property)property or any combination thereof) in respect of its capital stock, or make any other distributions in respect ofredeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)securities;
(ed) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit adopt a plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)material reorganization;
(ie) except as set forth in Section 5.01(i) of issue, deliver or sell, or authorize the Company Disclosure Scheduleissuance, the Company shall notdelivery or sale of, and shall not permit any shares of its Subsidiaries to, (i) enter intocapital stock of any class or other equity interests or any securities convertible into or exercisable for, or materially amendany rights, modify warrants or supplement options to acquire, any Contract outside the ordinary course of business consistent with past practice under which the Company such capital stock or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise)other equity interests;
(jf) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures except in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or business, make any commitments with respect to capital expenditures, except for capital expenditures not exceeding $50,000 in the aggregate;
(g) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability corporation, partnership, other planned capital expenditures business organization or division thereof, assets of any Person, other than in the ordinary course of business consistent with past practices in excess of $500,000 business;
(h) except in the aggregateordinary course of business, sell, lease, license, encumber or otherwise transfer any assets;
(i) except in the ordinary course of business, incur or assume any Indebtedness;
(j) except in the ordinary course of business, create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than liens for Taxes that are not yet due, statutory liens, or to secure Indebtedness or other obligations permitted by this Agreement;
(k) the Company shallmake any loan, and shall cause its Subsidiaries toadvance or capital contributions to or investment in any Person, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit or acquire any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithInvestment Interest;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor contract or collective bargaining agreement, memorandum other than in the ordinary course of business, or understanding, grievance settlement relinquish or any other agreement or commitment to or relating to any labor union which is different amend in any material respect with any currently existing collective bargaining agreementmaterial contract (as defined in Item 601(b)(1) of Regulation S-K of the SEC) to which it is a party, memorandum or understanding, grievance settlement or commitment, except, in each case, as required other than transactions and commitments contemplated by Lawthis Agreement;
(m) the Company shall not, and shall not permit enter into any of its Subsidiaries to, change any of the accounting policies, practices agreement or procedures (including tax accounting policies, practices and procedures) used by the Company arrangement that materially limits or otherwise materially restricts it or any of its Subsidiaries as Affiliates or any successor thereto or that could, after the Effective Time, limit or restrict any of IDC, the date hereofSurviving Corporation or any of its Affiliates, except as may be required as a result of a change from engaging in applicable Law or in GAAPany business;
(n) the Company shall notenter into any employment, and shall not permit deferred compensation or other similar agreement with any of its Subsidiaries todirector or officer or with any other Person; or establish or adopt any collective bargaining, takebonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any of its director, officer or any other Person; increase the compensation, bonus or other benefits payable to any director, or agree officer; or commit amend the terms of any outstanding option or right to takepurchase shares of its Common Stock or its other capital stock (except for the cancellation of all outstanding DWS options and warrants prior to the Effective Time in accordance with Section 4.5(c));
(o) except for changes pending as of the date hereof which have been disclosed by DWS to IDC, change: (1) its methods of accounting or accounting practices in any action that wouldmaterial respect, except as required by concurrent changes in GAAP or is reasonably likely toby law; or (2) its fiscal year, except with prior notification to the other parties;
(p) settle any material litigation, investigation, arbitration, proceeding or other claim;
(q) make any material tax election or enter into any settlement or compromise of any material tax liability;
(r) take any action, other than as expressly permitted by this Agreement, that would make any of its representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being hereunder inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;the Effective Time; or
(os) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in (a) Subject to Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent6.1.A., the Company covenants and agrees as to itself and its Subsidiaries that during after the period from the date of this Agreement Second Amendment Date and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective best reasonable best efforts to (A) preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other business associates and (B) maintain and keep material third parties having business dealings with them properties and assets in as good repair and condition as such are in as of the date hereof, subject to preserve the goodwill of their respective businessesordinary wear and tear;
(bii) the Company shall notnot (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its articles of incorporation or by-laws or amend, modify or terminate the Rights Agreement; (C) split, combine, subdivide or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock (other than dividends from its direct or indirect wholly owned Subsidiaries and shall other than regular quarterly cash dividends not in excess of $0.255 per Share and regular quarterly cash dividends on the preferred and preference stock of its Subsidiaries); or (E) repurchase, redeem or otherwise acquire (except for (I) mandatory sinking funds obligations existing on the date hereof and (II) open market repurchases pursuant to the terms of the Company's Direct Stock Purchase Plan and Dividend Reinvestment Plan), or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of stock;
(iii) neither the Company or nor any of its Subsidiaries shall (includingA) issue, without limitationsell, 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 equity interests property or assets (other than (I) Shares issuable pursuant to options and other rights outstanding on the date hereof under the Stock Plans, issuances of additional options or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans and issuances of Shares pursuant to options granted after the date hereof pursuant to the Stock Plans and (II) Shares issuable pursuant to the terms of the outstanding Feline Prides); (B) (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any of its coal fines property or assets, or, (II) except as identified on Section 6.1(a)(iii) of the Company Disclosure Letter, other than in the ordinary and usual course of business and other than sales not in excess of $10,000,000 in the aggregate or $1,000,000 in respect of any transaction or series of its Subsidiaries)related transactions, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets; (C) make or authorize or commit for any capital expenditures or operation and maintenance expenditures in excess of 100% of those contemplated to be spent pursuant to the year 1999, 2000 or 2001 capital appropriations/spending budgets set forth in Section 6.1(a) of the Company Disclosure Letter; or (iiiD) amendby any means, modify make any acquisition of, or waive investment in, assets or stock of, or other interest in, any term other Person or entity in excess of $10,000,000 in the aggregate or $3,000,000 in respect of any outstanding security transaction or series of the Company or any of its Subsidiaries, related transactions;
(iv) except (A) as required by this Agreement, (B) as set forth in Section 5.01(b6.1(a)(iv) of the Company Disclosure ScheduleLetter, neither the Company nor any of its Subsidiaries shall (A) accelerate or delay collection of notes or accounts receivable in connection advance of or beyond their regular due dates or the dates consistent with accelerating the vesting schedules of the Options past practice or (B) change any significant accounting principle, practice or method, except to the extent required by U.S. GAAP as advised by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection Company's regular independent accountants and after consultation with terminating the Options and the Stock PlansParent;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(ev) neither the Company nor any of its Subsidiaries shall (i) grant take or agree fail to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, to make any representation or warranty of the Company contained in this Agreement herein inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfiedTime, or omitthat is, individually or agree in the aggregate, reasonably likely to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfiedhave a Material Adverse Effect;
(ovi) except as required by applicable Law, an existing collective bargaining agreement or other Contract identified in Section 6.1(a)(vi) of the Company shall notDisclosure Letter, and shall not permit neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans (other than issuances of additional options, performance shares or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans, provided, that any such additional options, performance shares or rights to acquire Shares shall not vest in connection with the Merger and the other transactions contemplated by this Agreement), or except as required by any existing contract with a non-officer employer increase the salary, wage, bonus or other compensation of any 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);
(vii) except as required by applicable law, an existing collective bargaining agreement or other Contract identified in Section 6.1(a)(vii) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries shall grant any severance or termination pay to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreementemployment or severance agreement with any director or officer of it or such Subsidiaries, settle or compromise any Tax claimprovided, assessment or liability relating to that the foregoing shall not require the Company or to violate any of its Subsidiaries, or surrender any right obligations existing prior to claim a refund of Taxes, except the date hereof as set forth in Section 5.01(o5.1(h) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its SubsidiariesLetter;
(pviii) neither the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or nor any of its Subsidiaries thanshall settle or compromise any material claims or litigation or amend or terminate any of its material Contracts or waive, the terms of such Contract prior to the making of such amendment release or modification, and assign any material rights or claims;
(iiiix) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of neither the Company or nor any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements shall make any Tax election (other than in the aggregateordinary and usual course or as is required by Law) or 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;
(x) neither the Company nor any of its Subsidiaries shall make any filing (other than in the ordinary and usual course) with the MPSC, SEC or MPSC; and
(qxi) neither the Company shall not, and shall not permit nor any of its Subsidiaries to, agree will authorize or commit enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement):
(i) the business of Parent and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective best reasonable efforts to (A) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates and (B) maintain and keep material properties and assets in as good repair and condition as such are in as of the date hereof, subject to ordinary wear and tear;
(ii) it shall not (A) amend its articles of incorporation or by-laws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable, in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly owned Subsidiaries and other than regularly quarterly cash dividends not in excess of $0.515 per share of Parent Common Stock and regularly quarterly cash dividends on the preferred and preference stock of its Subsidiaries; or (D) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of Parent Common Stock or any securities convertible into or exchangeable or exercisable for any shares of Parent Common Stock (other than repurchases, redemptions or other acquisitions which are made at the then-prevailing market price of Parent Common Stock on the NYSE and which in the aggregate do not exceed ten percent of the shares of Parent Common Stock outstanding as of the date hereof);
(iii) neither Parent nor any of its Subsidiaries shall, (A) 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 Parent Common Stock (other than (I) shares of Parent Common Stock issuable pursuant to options outstanding on the date hereof under the Parent Stock Plan, issuances of additional options or rights to acquire shares of Parent Common Stock granted pursuant to the terms of the Parent Stock Plan as in effect on the date hereof in the ordinary and usual course of the operation of such Parent Stock Plan and issuances of shares of Parent Common Stock pursuant to options granted after the date hereof pursuant to the Parent Stock Plan and (II) issuances of Parent Common Stock, or securities convertible with or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, shares of Parent Common Stock, to a third-party on arms-length terms not in excess of 20% of the number of shares of Parent Common Stock outstanding as of the date hereof) or (B) acquire "Beneficial Ownership" (as such term is defined in the Rights Agreement) of any Shares;
(iv) neither Parent nor any of its Subsidiaries shall take or fail to take any action that is reasonably likely to make any representation or warranty of such party contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that is, individually or in the aggregate, reasonably likely to have a Material Adverse Effect; and
(v) neither Parent nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
Appears in 1 contract
Sources: Agreement and Plan of Merger (MCN Energy Group Inc)
Interim Operations. (a) Except as otherwise expressly contemplated or permitted by this Agreement or Agreement, as set forth in Section 5.01 of the Company Disclosure Schedule Schedule, as required by applicable Law, or as otherwise consented to in writing by ParentParent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company covenants and agrees that during the period from the date of this Agreement to the earlier of the Effective Time (or until and the termination of this Agreement in accordance with Article 7 hereof)::
(ai) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary course of business consistent with past practices (including the timely filing with the SEC of all SEC Reports required to be filed by the Company under the Exchange Act or the Securities Act from the date of this Agreement to the Effective Time, and the compliance in all material respects with the applicable requirements of the Exchange Act and Securities Act, as the case may be, with respect to such SEC Reports) and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their its current business organizationsorganization, keep available the services of their its current officers and key employees and preserve their its relationships with their its material customers, suppliers, licensors, licensees, advertisers, distributors licensees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesdistributors;
(bii) the Company shall not, and shall not permit any of its Subsidiaries to, (iA) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiariesstock, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, including stock appreciation rights or phantom interests), except (x) for issuances of up to 33,750 Restricted Stock Units in the aggregate to (1) employees (other than officers) hired after the date of this Agreement by the Company pursuant to customary new hire packages entered into in the ordinary course of business consistent with past practices and current market practices; provided, that the Company shall not issue more than 5,000 Restricted Stock Units to any individual employee, and (2) current employees (other than officers) of the Company; provided, that the Company shall not issue more than 2,500 Restricted Stock Units to any individual employee and such issuances shall be made in lieu of ordinary course periodic issuances, (y) for issuances of Common Shares upon the exercise of Options or Warrants, or settlement of Restricted Stock or Restricted Stock Units, in each case, outstanding as of the date hereof; of this Agreement or with respect to Restricted Stock Units, issued in compliance with Section 5.01 and solely in accordance with the provisions of the Stock Plans and/or Option agreements, Warrant Agreements or Restricted Stock award or purchase agreements, as applicable, in each case, in effect on the date of this Agreement or entered into in compliance with Section 5.01 or (iiz) for issuances of Common Shares to participants in the Company ESPP pursuant to the terms thereof and issued in compliance with the terms of this Agreement, including Section 2.02(e), (B) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, including securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company Company) except for forfeitures of Common Shares issued pursuant to Restricted Stock award or any purchase agreements in effect on the date of its Subsidiaries); this Agreement or (iii) amendfor Tax withholdings and exercise price settlements upon exercise of Options or Warrants or with respect to Restricted Stock or Restricted Stock Units, modify or waive any term of any in each case, outstanding security as of the Company or any date of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporationbylaws, or bylaws or (iiiD) split, combine or reclassify any shares of its capital stockstock or (E) amend or otherwise change the terms of any Options, and shall not permit any of its Subsidiaries to splitWarrants, combine Restricted Stock Units or reclassify any shares of its capital stockRestricted Stock;
(diii) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, (A) declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock or (B) acquire or agree to acquire any asset (except for dividends paid by direct raw materials, inventory or indirect wholly owned Subsidiaries to supplies in the Company or to other wholly owned Subsidiaries ordinary course of the Company business consistent with past practicespractices and capital expenditures permitted by Section 5.01(a)(xi)), business line, division, capital stock or other equity interest of any Person;
(eiv) neither except as otherwise permitted by Section 5.01(a)(ii), the Company nor any of its Subsidiaries shall not (iA) grant or agree to any increase increase, in any manner manner, in the compensation compensation, severance benefits or fringe benefits of of, or pay any severance or bonus to, any current or former director, officer or employee, except ; provided that compensation increases may be made only to employees (other than officers of the Company) in the ordinary course of business consistent with past practice, increases practices and bonuses expressly consistent with current market practices pursuant to the terms of any Benefit Plan in effect on the date of this Agreement or entered into as required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plansby this Agreement, (iiB) enter into any new or materially amend amend, modify or supplement any Contract (including any existing employment, consulting, severance, termination, change of control or indemnification Contract), transaction, commitment or arrangement with any current or former director, officer, employee or other affiliate of the Company, provided that the Company or any may enter into offer letters with new employees (other than officers) providing for customary new hire packages consistent with the Benefit Plans in effect on the date of its Subsidiaries, or this Agreement and may pay severance and provide other termination benefits to employees (iii) except as set forth in Section 5.01(eother than officers) of the Company Disclosure Scheduleas may be required by the Benefit Plans in effect on the date of this Agreement, in each case, in the ordinary course of business consistent with past practices and current market practices, (C) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in required by this Agreement (including, without limitation, including Section 2.02 hereofand Section 5.17), become obligated under any Benefit Plan that was not in existence on the date hereof of this Agreement or amend or amend, modify or terminate, or pay any benefit that is not required by, terminate any Benefit Plan or other employee benefit plan or any agreementContract, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofof this Agreement or (D) except as may be required to comply with applicable Law and except as provided or otherwise required by this Agreement (including Section 2.02 and Section 5.17), pay any benefit not required by any plan or arrangement (including any Benefit Plan) as in effect as of the date of this Agreement (including the granting of, acceleration of exercisability of or vesting of stock options, stock appreciation rights, restricted stock or restricted stock units; provided, however, that the foregoing restriction shall not exclude the grant of any stock options, restricted stock or restricted stock units granted (in accordance with the terms of Section 5.01(a)(ii)) to any employee (other than any officer) newly hired by the Company after the date of this Agreement);
(fv) the Company shall notnot sell, and shall not permit lease, license, mortgage or otherwise encumber or subject to any Lien (other than Permitted Liens) or otherwise dispose of any of its Subsidiaries toproperties or assets that are material, (x) enter into any new line of businessindividually or in the aggregate, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof Company other than acquisitions or purchases made with the prior written consent sales of the Parent (each an “Approved Acquisition”) inventory and other than non-taxable transfers by or among assets in the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside ordinary course of the United States and its territorial possessionsbusiness consistent with past practices;
(gvi) the Company shall not, and shall not permit any of its Subsidiaries to, (xA) incur, assume, be responsible for or pre-pay pay, discharge or satisfy any Indebtedness, Indebtedness or enter into any agreement to, Contract to incur, assume, be responsible for or pre-pay pay, discharge or satisfy any Indebtedness, other than in the ordinary course of business consistent with past practices pursuant to letters of credit, lines of credit or other credit facilities or arrangements disclosed on Section 5.01(a)(vi) of the Company Disclosure Schedule, or guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations obligation of another personPerson, or issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its SubsidiariesCompany, guarantee any debt securities of others, enter into any “keep well” or other agreement Contract to maintain any financial statement condition of another person Person or enter into any Contract or arrangement having the economic effect of any of the foregoing; foregoing or (yB) sellmake or forgive any loans, leaseadvances or capital contributions to, license or subject to any Lien or otherwise dispose guarantees for the benefit of, or agree to sell, lease or subject to any Lien or otherwise dispose ofinvestments in, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate Person, other than (i) pursuant cash advances to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiariesemployees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practices;
(hvii) neither the Company nor any of its Subsidiaries shall not adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)Company;
(iviii) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify modify, elect not to renew or supplement terminate or waive, release or assign any Contract outside the ordinary course of business consistent with past practice under which rights under, any Material Contract, provided, however, that the Company may (A) amend, modify, elect not to renew or terminate or waive, release or assign any rights under, any Material Contract described in subparagraphs (ii), (iii), (vii), (xii), (xiii), (xvi), (xix) and (xx) of its Subsidiaries shall have monetary obligations Section 3.16(a)) in excess of $25,000 (except as may be necessary for a manner that is not adverse to the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures which is in the ordinary course of business consistent with past practices disclosed and (B) enter into any new Material Contract of the type described in subparagraphs (ii), (iii), (vii), (xii), (xiii), (xvi), (xix) and (xx) of Section 3.16(a) in the ordinary course of business consistent with past practices.
(ix) the Company shall not renew any of its distribution agreements for a period of more than one (1) year from the date of expiration of the then current term of any such distribution agreement;
(x) except for customer (including distribution) Contracts entered into in the ordinary course of business consistent with past practices, the Company shall not renegotiate or enter into any new Material Contract or arrangements relating to any Proprietary Rights;
(xi) the Company shall not make any capital expenditure or commitments not consistent with expenditures in the Company’s capital budget for 2010 or 2011 provided to Parent prior to the date hereof and summarized in Section 5.01(j5.01(a)(xi) of the Company Disclosure Schedule by categorySchedule;
(xii) or the Company shall not make any commitments with respect to capital expenditures or other planned capital expenditures material changes in its standardized sales terms and conditions other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregatepractices;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(mxiii) the Company shall notnot enter into any settlement, and conciliation or similar Contract with any Governmental Authority;
(xiv) the Company shall not permit (A) settle or compromise any pending or threatened Claim, except with respect to the settlement or compromise of its Subsidiaries toany such Claim (x) where the full amount paid or to be paid is covered by insurance coverage maintained by the Company (subject to any applicable deductibles or retention amounts) or (y) that is not covered by insurance and where the full amount paid or to be paid does not exceed $25,000 individually, (B) change any of the accounting policies, practices or procedures (including tax material Tax accounting methods, periods, policies, practices and or procedures) used by the Company or any of its Subsidiaries as methods of the date hereofreporting income, deductions or other items for financial accounting purposes, except as may be required as a result of a change in applicable Law or in GAAP;
(n) GAAP enacted after the Company shall not, and shall not permit any date of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate or (C) except in the ordinary course of business consistent with past practices, make, change or rescind any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Returnelection, enter into any material closing agreementagreement relating to Taxes, settle or compromise any material Tax claimliability, assessment audit, Claim, proceeding or liability relating to the Company or assessment, file any of its Subsidiariesmaterial amended Tax Return, or surrender any right to claim a refund of material Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future material Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiariesassessment;
(pxv) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries not allow any material Company Proprietary Rights to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend become abandoned or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, expired for failure to make required filings or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; andpay required fees;
(qxvi) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingforegoing (other than as permitted by clause (i) above); and
(xvii) the Company shall use commercially reasonable efforts to maintain its inventory of supplies and components necessary for the manufacture of the Company's products at adequate levels as required to operate the business.
(b) If the Company shall desire to take an action which would be prohibited pursuant to Section 5.01(a) without the written consent of Parent, prior to taking such action the Company shall request such written consent by sending an email or facsimile to each of the following individuals, and may not take such action until such consent (which consent shall not be unreasonably withheld, conditioned or delayed) in writing has been received from any of the following individuals: C▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Director, New Business Development Email: c▇▇▇.▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇ J▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Vice President and General Manager (Bard Canada, Inc.) Email: j▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ In each case, with a copy (which shall not constitute notice) to: J▇▇ ▇▇▇▇▇▇▇ Group Vice President Email: j▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Appears in 1 contract
Sources: Merger Agreement (Senorx Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company it and its Subsidiaries shall be conductedconducted in accordance with the Operating Budget, and taken as a whole, and, to the books and records of the Company and its Subsidiaries shall be maintainedextent consistent therewith, only in the ordinary and usual course of business and consistent with past practice and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable respective best efforts to preserve its business organization intact their current business organizationsand maintain its existing relations and goodwill with all Governmental Entities (including, keep available without limitation, the services of their current officers and employees and preserve their relationships with their material SEC), ETP Holders, OTP Holders, Current Company Related Persons, customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors permit holders, Employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) it shall not (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries or any of the shares of Parent Common Stock by the Company shall notor any of its direct or indirect subsidiaries; (B) except as set forth in Sections 2.1 and 5.1(c)(ii) of this Agreement, and shall not amend its certificate of incorporation or by-laws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries; or (E) repurchase, redeem or otherwise acquire, except in connection with the Stock Plan, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(iii) neither it nor any of its Subsidiaries shall (includingA) issue, without limitationsell, 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 or other equity interests of the Company any class or any of its SubsidiariesVoting Debt or any other property or assets other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Stock Plan); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth other than in Section 5.01(b) the ordinary and usual course of the Company Disclosure Schedulebusiness, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) transfer, lease, license, guarantee, sell, transfer or mortgage, pledge, dispose of or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in encumber any other fashion the corporate structure property or ownership assets (including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation incur or bylaws modify any material indebtedness or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws other liability; or (iiiC) split, combine or reclassify acquire any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockParent Common Stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(eiv) neither the Company it nor any of its Subsidiaries shall (iA) grant terminate, establish, adopt or agree enter into any Benefit Plans, except as required under applicable Law, (B) make any new grants or awards under any Benefit Plans, except that the Company may reissue such Company Options and Company Restricted Stock which was issued and outstanding as of the date of this Agreement and which are subsequently cancelled prior to the Effective Time, in each case pursuant to the terms and conditions of the applicable Benefit Plan; or (C) or amend or otherwise modify any Benefit Plan or increase in any manner the salary, wage, bonus or other compensation or benefits of any current or former director, officer or employeeemployees, except in accordance with ordinary and usual course of business consistent with past practice and to the extent all such increases and all such present or future costs associated with such amendments or modifications (x) have been fully reserved against in the Company Financial Statements or (y) are in accordance with the Operating Budget;
(v) except in the ordinary and usual course of business consistent with past practice or as fully reserved in the Operating Budget, neither it nor any of its Subsidiaries shall settle or compromise any material claims or litigation or modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(vi) neither it nor any of its Subsidiaries shall make any Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(vii) it shall and shall cause its Subsidiaries to, (i) timely make all filings with the SEC and any other Governmental Entity required to maintain PCX’s status as a national securities exchange and as a self-regulatory organization (as registered under Section 6 and as defined in Section 3(a)(26), respectively, of the Exchange Act) and to keep it and all of its Subsidiaries in compliance in all material respects with all Laws, (ii) keep PCX Equities and all of its Subsidiaries in compliance in all material respects with all Laws and PCX rules and (iii) cause PCX and its Subsidiaries to fulfill, in all material respects, its regulatory oversight functions over the ArcaEx Business in PCX’s capacity as a national securities exchange and self-regulatory organization (as registered under Section 6 and as defined in Section 3(a)(26), respectively, of the Exchange Act);
(viii) neither it nor any of its Subsidiaries (A) shall permit any change in its credit practices or accounting principles, policies or practice (including, without limitation, 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 and (B) shall pay, collect or accrue, as the case may be, the consolidated accounts receivable and accounts payable of the Company, for the period following the Calculation Month-End, other than in the ordinary and usual course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(hix) neither the Company it nor any of its Subsidiaries shall adopt take any actions that, if taken prior to the date hereof, would constitute or put into effect result in a plan breach of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this AgreementSection 5.1(i);
(ix) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or neither it nor any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company take any action or omit to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer take any action that would cause any of its representations and warranties herein to become untrue in any material rights or claims (whether such rights or claims arise under a Contract or otherwise);respect at any time; and
(jxi) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, will authorize or make enter into an agreement to do any capital expenditures of the foregoing.
(other than pursuant b) If the Closing Date shall not have occurred by March 31, 2005, and the Company shall thereafter determine that additional funding is necessary in order for it to commitments prior maintain a positive cash balance, Parent, within five business days of any written request therefor from the Company, will advance to the date hereof or other planned capital expenditures Company by wire transfer of immediately available funds to a bank account designated by the Company, the requested amount to support the Company and its Subsidiaries operations; provided that the aggregate amount of such advances outstanding at any time (after giving effect to all outstanding requests therefor from the Company) shall not be required to exceed $10,000,000, unless Parent shall consent in writing to a larger amount. Such advances may be repaid at any time at the ordinary course option of business consistent with past practices disclosed in Section 5.01(jthe Company. Such advances: (i) for the avoidance of doubt, shall constitute a “Total Adjusted Liability” of the Company Disclosure Schedule for purposes of the Calculation and the Final Working Capital Amount and for any other purpose required by category) GAAP or make applicable Law, until repaid in accordance with the terms of this Agreement and the terms of any commitments with respect other customary evidence of indebtedness Parent may request that the Company and any of its Subsidiaries execute and deliver to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
it as a condition to Parent making such advances (k) which the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good execute and responsible insurance companies adequately covering risks deliver to Parent prior to Parent becoming obligated to make any such advances pursuant to the terms of such types this Agreement); and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts shall not to permit any insurance policy naming it bear interest, and unless repaid by the Company, shall remain outstanding for so long as beneficiary or loss payable payee to this Agreement shall remain in effect and the Effective Time shall not have occurred. If this Agreement is terminated and the Effective Time shall not have occurred, such advances shall bear interest and be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases repaid in accordance with their terms, and (ivSection 8.5(a) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;this Agreement.
(lc) except as set forth in Section 5.01(l) of the Company Disclosure ScheduleExcept for any resignation, the Company shall notretirements, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor dismissals or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used reductions in-force announced by the Company or any of its Subsidiaries as of prior to the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the event that the Company shall notimplement any reductions in-force prior to the Effective Time, and shall not permit any of its Subsidiaries toParent shall, takeon demand, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of reimburse the Company contained in this Agreement inaccurate in for any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) severance costs associated therewith; provided that the Company shall notprovide Parent reasonable prior notice of, and Parent shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to have the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplementveto, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingreductions.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Archipelago Holdings Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the The Company Disclosure Schedule or as consented to in writing by Parent, the Company and Parent each covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement to hereof and until the Effective Time (unless Parent or until termination of the Company, as the case may be, shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement, the respective Disclosure Letter, the Stock Option Agreement, the Company Budget or the Parent Budget, or as required by applicable Law):
(a) the business and operations of the Company it and its Subsidiaries shall be conductedconducted in the ordinary and usual course and, to the extent consistent therewith, it and the books and records each of the Company and its Subsidiaries shall use its best efforts to preserve its business organization intact and maintain its existing rela tions and goodwill with customers, suppliers, creditors, regulators, lessors, employees and business associates;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its articles of incorporation, charter or by-laws; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries and other than (A) in the case of the Company, regular quarterly cash dividends not in excess of $0.34 per Share (which amount may, at the election of the Company, be maintainedincreased by not more than 6.5% per year, only beginning in the 1997 fiscal year of the Company) and regular quarterly cash dividends on the preferred and preference stock of its Subsidiaries and (B) in the case of Parent, regular quarterly cash dividends not in excess of $0.43 per share of Parent Common Stock (which amount may, at the election of Parent, be increased by not more than 6.5% per year, beginning in the 1997 fiscal year of Parent) and regular quarterly cash dividends on the preferred shares of subsidiaries of Parent; or (v) repurchase, redeem or otherwise acquire (except for (A) mandatory sinking fund obligations existing on the date hereof and (B) redemptions, purchases, acquisitions or issuances required by the respective terms of any Stock Plans, in the case of the Company, or Parent Stock Plans, in the case of Parent, or any dividend reinvestment plans as in effect on the date hereof in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services operation of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(bsuch plans) the Company shall not, and shall not or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(c) neither it nor any of its Subsidiaries shall (includingi) issue, without limitationsell, 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 equity interests property or assets (other than (x) in the case of the Company or any of its Subsidiaries); or (iii) amendCompany, modify or waive any term of any Shares issuable pursuant to options outstanding security of on the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by date hereof under the Stock Plans or upon conversion of the agreements Preferred Shares and additional options or rights to acquire Shares required by the terms of any Stock Plan as in effect on the date hereof in the ordinary course of the operation of such Stock Plan, (y) in the case of the Parent, shares of Parent Common Stock issuable pursuant to which options outstanding under the Parent Stock Plans and additional options or rights to acquire Parent Shares required by the terms of any Parent Stock Plan as in effect on the date hereof in the ordinary course of 30 38 the operation of such Options were granted or Parent Stock Plan, and (Cz) issuances of securities in connection with terminating grants or awards of stock-based compensation made in accordance with Section 6.1(d) hereof); (ii) other than in the Options ordinary and usual course of business, and except for long-term indebtedness incurred in connection with the Stock Plans;
(c) the Company shall not (i) refinancing of existing indebtedness either at its maturity or at a lower cost of funds, transfer, lease, license, guarantee, sell, transfer or mortgage, pledge, dispose of or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in encumber any other fashion the corporate structure property or ownership assets (including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation incur or bylaws modify any material indebtedness or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or other liability; (iii) splitmake any commitments for, combine make or reclassify authorize any shares capital expenditures other than (x) capital expenditures not in excess of its $25,000,000 in the aggregate incurred in connection with the repair or replacement of facilities destroyed or damaged due to casualty or accident (whether or not covered by insurance), (y) as required by Law, or (z) in amounts less than $5,000,000 individually and $15,000,000 in the aggregate; provided, however, that if either party proposes to make any capital stockexpenditure which requires the written consent of the other party pursuant to this Section 6.1, and such other party shall not permit unreasonably withhold such consent; or (iv) make any acquisition of, or investment in, assets or stock of its Subsidiaries to split, combine any other Person or reclassify any shares entity in excess of its capital stock$15,000,000 in the aggregate;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards of stock-based compensation or other benefits under, amend or otherwise modify any Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any directors, officers or employees except (i) grant for grants or agree awards to any increase directors, officers and employees of it or its Subsidiaries under existing Compensation and Benefit Plans in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business such amounts and on such terms as are consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any in the normal and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases, annual reestablishment of Compensation and Benefit Plans and the provision of individual Compensation and Benefit Plans consistent with past practice for newly hired or appointed officers and employees and the adoption of Compensation and Benefit Plans for employees of new or materially amend any existing Contract, transaction, commitment or arrangement Subsidiaries in amounts and on terms consistent with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, past practice) or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required for actions necessary to comply with applicable Law satisfy existing contractual obligations under Compensation and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to Plans existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except (a) The Company and the Stockholders covenant and agree as otherwise contemplated by this Agreement or as set forth in Section 5.01 of to the Company Disclosure Schedule or as consented to in writing by Parentand its Subsidiaries that, the Company covenants and agrees that during the period from after the date of this Agreement hereof and prior to the Effective Time (or until termination of unless Parent shall otherwise grant prior approval in writing and except as otherwise expressly stated in this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the extent consistent therewith, the Company and its Subsidiaries shall use their commercially respective reasonable best efforts to preserve their business organization intact their current business organizations, keep available the services of their current officers and employees maintain existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) the Company shall notnot (A) issue, and shall not sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) other than as set forth in Section 6.9, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (E) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of stock;
(iii) neither the Company or nor any of its Subsidiaries shall (includingA) issue, without limitationsell, 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 or other equity interests of the Company any class or any Voting Debt, other than pursuant to the valid exercise of its Subsidiaries); currently outstanding options or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreementwarrants, (B) as set forth other than in Section 5.01(b) the ordinary and usual course of the Company Disclosure Schedulebusiness, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) transfer, lease, license, guarantee, sell, transfer or mortgage, pledge, dispose of or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in encumber any other fashion the corporate structure property or ownership assets (including capital stock of any of its Subsidiaries) or incur or modify any indebtedness or other liability; or (C) make or authorize or commit for any capital expenditures other than in amounts less than $50,000 individually and $200,000 in the aggregate or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity other than raw materials and inventory in the ordinary course of business;
(iiiv) amend or otherwise change its certificate of incorporation or bylaws or permit neither the Company nor any of its Subsidiaries to shall terminate, establish, adopt, enter into, make any new grants or awards under, amend its articles or otherwise modify, any Company Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of incorporation, or bylaws or any employees;
(iiiv) split, combine or reclassify any shares of its capital stock, and shall not permit neither the Company nor any of its Subsidiaries to splitshall settle or compromise any claims or litigation or waive, combine release or reclassify assign any shares of its capital stockrights or claims;
(dvi) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, neither the Company shall not, and shall not permit nor any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or shall make any other distributions Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in respect of, the ordinary and usual course of business;
(vii) neither the Company nor any of its capital stock (except for dividends paid by direct Subsidiaries shall make or indirect wholly owned Subsidiaries change any Tax election, obtain or request any private letter ruling, closing agreement or similar ruling or agreement with respect to the Company Taxes or to other wholly owned Subsidiaries change any method of the Company consistent with past practices)tax accounting;
(eviii) neither the Company nor any of its Subsidiaries shall knowingly take any action or omit to take any action that would be reasonably likely to cause any of its representations and warranties herein to become untrue;
(ix) neither the Company nor any of its Subsidiaries shall account for, manage, or treat accounts receivable, inventory or customer credits in any manner other than in the ordinary course of business, or (without limiting the generality of the foregoing) write off as uncollectible any notes or accounts receivable or write down the value of any inventory other than in the ordinary course of business;
(x) neither the Company nor any of its Subsidiaries shall (iA) grant amend, terminate or agree to enter into any increase in any manner the compensation or benefits of any current or former director, officer or employee, Contract that is not a Material Contract except increases in the ordinary and usual course of the Company's or its Subsidiaries' business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, practices or (iiiB) except as set forth in Section 5.01(e) of the Company Disclosure Scheduleamend, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person terminate or enter into any arrangement having the economic effect of any of the foregoingMaterial Contract; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;and
(hxi) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, will authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other an agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(b) Parent and Merger Sub agree that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise grant prior approval in writing and except as otherwise expressly stated in this Agreement) neither Parent nor Merger Sub shall knowingly take any action or omit to take any action that would be reasonably likely to cause any of its representations and warranties herein to become untrue.
Appears in 1 contract
Sources: Merger Agreement (Moore Wallace Inc)
Interim Operations. Except (a) Each of the Company and Technest covenants and agrees as to itself and its Subsidiaries that, after the Agreement Date and prior to the First Closing Date (except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing required by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereofapplicable Law):
(ai) the The business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsregulators, licenseesdistributors, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) the Company It shall not: (A) amend its certificate of incorporation or bylaws; (B) split, and shall not combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (D) repurchase, redeem or otherwise acquire or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the any securities convertible into or exchangeable or exercisable for any shares of its capital stock of stock;
(iii) Neither it nor any of its SubsidiariesSubsidiaries shall take any action that would prevent the Exchange from qualifying as a "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties in this Agreement to become untrue in any material respect;
(iv) Neither it nor any of its ERISA Affiliates shall: (A) accelerate, amend or change the period of exercisability of or terminate, establish, adopt, enter into, make any new grants or awards of stock-based compensation or other benefits under any Compensation and Benefit Plans; (B) amend or otherwise modify any Compensation and Benefit Plans; or (C) increase the salary, wage, bonus or other compensation of any directors, officers or key employees, in the case of (A), (B) and (C), except (x) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice, (y) in the normal and usual course of its business (which may include normal periodic performance reviews and related compensation and benefit increases and the provision of individual Compensation and Benefit Plans consistent with past practice for promoted or newly hired officers and employees on terms consistent with past practice); provided, that it shall not take such action unless it shall have provided the other party with prior reasonable notice, or (z) for actions necessary to satisfy existing contractual obligations under Compensation and Benefit Plans existing as of the Agreement Date;
(v) Neither it nor any of its Subsidiaries shall incur, repay or retire prior to maturity or refinance any indebtedness for borrowed money or guarantee any such 27 34 indebtedness or issue, sell, repurchase or redeem prior to maturity any debt securities or warrants or rights to acquire any debt securities or guarantee any debt securities of others;
(vi) Neither it nor any of its Subsidiaries shall make any capital expenditures;
(vii) Neither it nor any of its Subsidiaries shall issue, deliver, sell, pledge or encumber shares of any class of its capital stock or any securities convertible or exercisable exchangeable into, or any rights, warrants or options to acquire, any such shares, securities shares except (i) Company Shares or convertible securities or any Technest Shares issued pursuant to options and other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon awards outstanding on the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of Agreement Date under the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements Technest Stock Plans, awards of options and other awards granted hereafter under the Company Stock Plans or the Technest Stock Plans in accordance with this Agreement and Company Shares or Technest Shares issuable pursuant to which such Options were granted or (C) in connection with terminating the Options awards, and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any bona fide sales by the Company of its Subsidiaries common stock pursuant to amend its articles of incorporationexisting commitments, or bylaws or in an amount, in the aggregate, not to exceed 10,000,000 shares (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries determined prior to the Company or to other wholly owned Subsidiaries reverse split of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically Shares contemplated by this Agreement);
(iviii) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or Neither it nor any of its Subsidiaries shall have monetary obligations in excess of $25,000 authorize, propose or announce an intention to authorize or propose, or enter into an agreement with respect to, any Exchange, consolidation or business combination (except as may be necessary for other than the Company to comply with its obligations hereunderExchange), or (ii) waiveany purchase, releasesale, grantlease, assign, modify license or transfer other acquisition or disposition of any business or of a material amount of assets or securities except for transactions entered into in the normal and usual course of its material rights or claims (whether such rights or claims arise under a Contract or otherwise)business;
(jix) Neither the Company nor Technest shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (material change in its accounting policies or procedures, other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which change that is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(nx) Neither the Company nor Technest shall notrelease, and shall not permit any of its Subsidiaries toassign, take, settle or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in compromise any material respect at, claims or as of any time prior to, the Effective Time litigation or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claimmaterial federal, assessment state, local or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;foreign tax liability; and
(pxi) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or Neither it nor any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment shall authorize or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, into any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit agreement to do any of the foregoing.
(b) Company and Technest agree that any written approval obtained under this Section 6.1 must be signed by the Chief Executive Officer or Chief Financial Officer of the respective party.
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Financial Intranet Inc/Ny)
Interim Operations. Except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 hereby, without the prior written consent of the Company Disclosure Schedule or other parties, IDC and DWS (and DWS Delaware, as consented to applicable) shall conduct its business in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only all material respects in the ordinary course of business consistent with past practice and the Company and its Subsidiaries shall use their commercially all reasonable best efforts to to: (i) preserve intact their current its present business organizations, organization; (ii) keep available the services of their current officers its officers; (iii) maintain in effect all material foreign, federal, state and employees local licenses, permits, approvals and authorizations that are required for it to carry on its business as currently conducted or proposed to be conducted; and (iv) preserve their existing relationships with their its material customerspartners, supplierslenders, licensorssuppliers and others having material business relationships with it so that its business or prospects shall not be adversely affected in any material respect as of the Effective Time. Further, licenseesand without limiting the generality of the foregoing, advertisersand excluding those matters necessary to accomplish the Redomestication Transaction as provided in Section 6.2, distributors from the date hereof until the Effective Time, without the prior written consent of the other Parties, IDC and DWS shall not:
(a) amend its certificate of incorporation, articles or bylaws or other material third parties having business dealings with them and to preserve the goodwill of their respective businessesapplicable governing instrument;
(b) the Company shall not, and shall not permit amend any term of any of its Subsidiaries tooutstanding securities;
(c) split, (i) authorize for issuancecombine, issue, deliver, sell subdivide or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber reclassify any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on dividend or other distribution (whether in cash, stock or other property)property or any combination thereof) in respect of its capital stock, or make any other distributions in respect of▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)securities;
(ed) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit adopt a plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)material reorganization;
(ie) except as set forth in Section 5.01(i) of issue, deliver or sell, or authorize the Company Disclosure Scheduleissuance, the Company shall notdelivery or sale of, and shall not permit any shares of its Subsidiaries to, (i) enter intocapital stock of any class or other equity interests or any securities convertible into or exercisable for, or materially amendany rights, modify warrants or supplement options to acquire, any Contract outside the ordinary course of business consistent with past practice under which the Company such capital stock or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise)other equity interests;
(jf) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures except in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or business, make any commitments with respect to capital expenditures, except for capital expenditures not exceeding $50,000 in the aggregate;
(g) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability corporation, partnership, other planned capital expenditures business organization or division thereof, assets of any Person, other than in the ordinary course of business consistent with past practices in excess of $500,000 business;
(h) except in the aggregateordinary course of business, sell, lease, license, encumber or otherwise transfer any assets;
(i) except in the ordinary course of business, incur or assume any Indebtedness;
(j) except in the ordinary course of business, create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than liens for Taxes that are not yet due, statutory liens, or to secure Indebtedness or other obligations permitted by this Agreement;
(k) the Company shallmake any loan, and shall cause its Subsidiaries toadvance or capital contributions to or investment in any Person, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit or acquire any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithInvestment Interest;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor contract or collective bargaining agreement, memorandum other than in the ordinary course of business, or understanding, grievance settlement relinquish or any other agreement or commitment to or relating to any labor union which is different amend in any material respect with any currently existing collective bargaining agreementmaterial contract (as defined in Item 601(b)(1) of Regulation S-K of the SEC) to which it is a party, memorandum or understanding, grievance settlement or commitment, except, in each case, as required other than transactions and commitments contemplated by Lawthis Agreement;
(m) the Company shall not, and shall not permit enter into any of its Subsidiaries to, change any of the accounting policies, practices agreement or procedures (including tax accounting policies, practices and procedures) used by the Company arrangement that materially limits or otherwise materially restricts it or any of its Subsidiaries as Affiliates or any successor thereto or that could, after the Effective Time, limit or restrict any of IDC, the date hereofSurviving Corporation or any of its Affiliates, except as may be required as a result of a change from engaging in applicable Law or in GAAPany business;
(n) the Company shall notenter into any employment, and shall not permit deferred compensation or other similar agreement with any of its Subsidiaries todirector or officer or with any other Person; or establish or adopt any collective bargaining, takebonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any of its director, officer or any other Person; increase the compensation, bonus or other benefits payable to any director, or agree officer; or commit amend the terms of any outstanding option or right to takepurchase shares of its Common Stock or its other capital stock (except for the cancellation of all outstanding DWS options and warrants prior to the Effective Time in accordance with Section 4.5(c));
(o) except for changes pending as of the date hereof which have been disclosed by DWS to IDC, change: (1) its methods of accounting or accounting practices in any action that wouldmaterial respect, except as required by concurrent changes in GAAP or is reasonably likely toby law; or (2) its fiscal year, except with prior notification to the other parties;
(p) settle any material litigation, investigation, arbitration, proceeding or other claim;
(q) make any material tax election or enter into any settlement or compromise of any material tax liability;
(r) take any action, other than as expressly permitted by this Agreement, that would make any of its representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being hereunder inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;the Effective Time; or
(os) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except (a) The Company shall, from and after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, with such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise contemplated expressly required by this Agreement or as set forth required by applicable Law, conduct its business in Section 5.01 the Ordinary Course of the Company Disclosure Schedule or as consented to in writing by ParentBusiness and, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conductedextent consistent therewith, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to to, preserve its business organization intact their current business organizationsand maintain satisfactory relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, employees and business associates and keep available the services of its present employees and agents. Without limiting the generality of and in furtherance of the foregoing sentence, from the date of this Agreement until the Effective Time, except as otherwise expressly required by this Agreement, required by applicable Law, required by the express terms of any Company Material Contract made available to Parent, as approved in writing by Parent (with such approval not to be unreasonably withheld, conditioned or delayed) or set forth in the corresponding subsection of Section 8.1(a) of the Company Disclosure Letter, the Company shall not:
(i) adopt or propose any change in its Organizational Documents;
(ii) form, incorporate or organize any Subsidiaries;
(iii) merge or consolidate the Company with any other Person or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material third parties having business dealings with them and to preserve the goodwill of their respective changes or restrictions on its assets, operations or businesses;
(biv) acquire assets from any other Person, other than acquisitions of goods in the Ordinary Course of Business or assets valuing less than $100,000 individually or $250,000 in the aggregate;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company, 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 (A) the Support Agreement and (B) the issuance of shares of capital stock in respect of Company shall notEquity Awards outstanding as of the date of this Agreement or issued after the date of this Agreement in accordance with Section 8.1(a)(xxiv), in each case in accordance with their terms and, as applicable, the Incentive Plans as in effect on the date of this Agreement;
(vi) enter into any Contracts or other arrangements between the Company, on the one hand, and shall any director or executive officer of the Company or any Person beneficially owning five percent or more of the outstanding Shares or shares of common stock of any of their respective Affiliates, on the other hand, except for compensatory arrangements consistent with Section 8.1(a)(xxiv) or entered into in the Ordinary Course of Business with Company Employees consistent with Section 8.1(a)(xxiv) and transactions with Parent or its Affiliates;
(vii) create or incur any Encumbrance that is not permit incurred in the Ordinary Course of Business on any assets of the Company;
(viii) make any loans, advances, guarantees or capital contributions in excess of $50,000 to or investments in any Person;
(ix) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its Subsidiaries tocapital stock (including with respect to the Company, for the avoidance of doubt, Shares);
(ix) authorize for issuancereclassify, issuesplit, delivercombine, sell subdivide or agree or commit to issueredeem, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge directly or otherwise encumber indirectly, any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exchangeable into or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(dxi) incur any Indebtedness (including the issuance of any debt securities, warrants or other than quarterly dividends not rights to acquire any debt security) in excess of $0.075 per Common Share declared 50,000;
(xii) enter into any Contract that would have been a Company Material Contract had it been entered into prior to this Agreement, other than Contracts entered into in the Ordinary Course of Business with payment obligations not to exceed $100,000;
(xiii) other than with respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 8.1(a)(xi), terminate or amend, modify, supplement or waive in any material respect, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Company Material Contract, except for (x) expirations of any such Contract in the Ordinary Course of Business and paid consistent in accordance with past practicesthe terms of such Contract with no further action by the Company or other party to such Contract, except for any ministerial actions, (y) non-exclusive licenses under Intellectual Property Rights owned or purported to be owned by the Company, in each case, granted in the Ordinary Course of Business or (z) terminations, amendments, modifications, assignments, conveyances, transfers or expirations where, concurrent therewith, the Company enters into a replacement Contract providing substantially similar property, products or services on substantially similar terms;
(xiv) cancel, modify or waive any debts or claims held by the Company in excess of $100,000 or waive any material rights;
(xv) except as expressly provided for by Section 8.11, amend, modify, terminate, cancel or let lapse an Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by the Company or replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing 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, which shall notbe governed by Section 8.15, and shall not permit settlement of trade accounts payable in the Ordinary Course of Business, settle or compromise any Proceeding for an amount in excess of its Subsidiaries to, declare, set aside $100,000 individually or pay any dividends on $250,000 in the aggregate;
(whether in cash, stock or other property), or xvii) make any other distributions in changes with respect of, any to the legal structure of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to their accounting policies or procedures, except as required by changes in applicable Law or GAAP;
(xviii) enter into any line of business in any geographic area other wholly owned Subsidiaries than the existing lines of business of the Company consistent with past practices)and lines of products and services reasonably ancillary to any existing line of business, in any geographic area for which a License (if one is required) authorizing the conduct of such business, product or service in such geographic area is held by it, or, except as currently conducted, engage in the conduct of any business in any jurisdiction that would require the receipt or transfer of any License issued by any Governmental Entity;
(exix) neither make any material changes to the existing lines of business of the Company nor or adopt or make any material modifications to the Company’s strategic plan;
(xx) make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended material Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a material refund or take any action which would be reasonably expected to result in an increase in the Tax liability of the Company, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Subsidiaries shall Affiliates;
(ixxi) grant transfer, sell, lease, divest, cancel, allow to lapse or agree expire, or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any material assets (tangible or intangible, including any Intellectual Property Rights), Licenses, product lines or businesses of the Company, except in connection with services provided in the Ordinary Course of Business or sales of obsolete assets;
(xxii) cancel, abandon or otherwise allow to lapse or expire any Company Intellectual Property Rights, except in the Ordinary Course of Business with respect to Intellectual Property Rights that are not material to any business of the Company;
(xxiii) amend or fail to comply with the Privacy and Security Policies, or alter the operation or security of any IT Assets owned, used or held for use in the operation of the Company’s business, in each case, in a manner that would be less protective of any IT Assets, Personal Information or any other confidential or proprietary information that is in the Company’s possession or control, including any information stored on or processed by such IT Assets;
(xxiv) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement and set forth in Section 8.1(a)(xxiv) of the Company Disclosure Letter, (A) increase in any manner the compensation or benefits fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any current Company Employee, (B) become a party to, establish, adopt, amend, commence participation in or former director, officer terminate any Company Benefit Plan or employeeany arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement, except increases in connection with annual renewals or as required to comply with applicable Law, (C) grant any new awards, or amend or modify the ordinary course terms of business consistent with past practiceany outstanding awards, increases and bonuses expressly required under existing employment agreementsany Company Benefit Plan, bonus plans and other agreements and arrangements listed or described in (D) except as provided on Section 5.01(e5.3(a)(i) of the Company Disclosure Schedule and except in connection with accelerating Letter, take any action to accelerate the vesting schedules or lapsing of restrictions or payment, or fund or in any other way secure the Options and terminating the Options and the Stock Planspayment, of compensation or benefits under any Company Benefit Plan, (iiE) enter into change any new actuarial or materially amend other assumptions used to calculate funding obligations with respect to any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee applicable Law to be canceled funded or terminated, (iii) maintain all Leased Real Property (including, without limitation, change the furniture, fixtures, equipment and systems therein) manner in its current condition in all material respects, subject which contributions to reasonable wear and tear and subject to any casualty such plans are made or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting basis on which such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereofcontributions are determined, except as may be required as a result by GAAP, (F) forgive any loans or make any extensions of credit in the form of a change personal loan to any Company Employee (other than routine travel advances issued in applicable Law the Ordinary Course of Business), (G) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees and target cash bonus opportunity in GAAPexcess of $100,000 or (H) terminate the employment of any executive officer other than for cause;
(nxxv) 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;
(xxvi) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xxvii) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company shall not, and shall not permit operates or is otherwise subject to jurisdiction;
(xxviii) take any of its Subsidiaries to, take, action or agree or commit fail to take, take any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or expected to result in any of the conditions to the Merger set forth in Article 6 IX not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;; or
(oxxix) the Company shall notagree, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
(b) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time or give the Company, directly or indirectly, the right to control or direct the Parent’s or its Subsidiaries’ operations prior to the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Cafepress Inc.)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 SECTION 6.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 ARTICLE 8 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, conducted only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, including without limitation, limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; hereof or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its Subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate charter, articles of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, bylaws or bylaws equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or fringe benefits of of, or pay any bonus to, any current or former director, officer or employee, employee except increases in the ordinary course of business consistent with past practicepractice of less than 10% of each such individual's salary for non-officer employees, increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(eSECTION 6.01(E) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contractemployment, transactionconsulting, commitment severance, termination, change-of-control or arrangement indemnification agreement with any current or former director, officer, officer or employee or affiliate of the Company or any of its SubsidiariesCompany, or (iii) except as set forth in Section 5.01(eSECTION 6.01(E) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 SECTION 3.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or amend, modify or terminate, or pay any benefit that is not required by, terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, hereof or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company required to comply with its obligations hereunder), applicable Law and except as provided or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures otherwise contemplated in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property this Agreement (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.SECTION 40
Appears in 1 contract
Sources: Acquisition Agreement (Prentice Capital Management, LP)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during as to itself and its Subsidiaries that, after the period date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, such approval not to be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of it and its Subsidiaries shall be conducted in the ordinary and usual course of business consistent with past practice 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, agents, customers, employees and other Persons with whom they have business relationships. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement to until the Effective Time Time, except (i) as otherwise contemplated or until termination of permitted by this Agreement Agreement, (ii) as Parent may approve in accordance with Article 7 hereof):
writing (asuch approval not to be unreasonably withheld or delayed), (iii) the business and operations as is required by applicable Law or any Governmental Entity or (iv) as set forth in Schedule 6.1(a) of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries shall be conducted, and the books and records to:
(A) adopt or propose any change in its certificate of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and incorporation or bylaws or other material third parties having business dealings with them and to preserve the goodwill of their respective businessesapplicable governing instruments;
(bB) merge or consolidate the Company shall not, and shall not permit or any of its Subsidiaries towith any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate;
(iC) make any material acquisition, by purchase, merger, consolidation, other business combination or otherwise, of stock or assets from any Person (other than a wholly-owned Subsidiary of the Company);
(D) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueencumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, other than (1) the issuance of Shares upon the exercise of Company Options or Warrants or (2) 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 forinto or exercisable for any shares of such capital stock, or any options, warrants, calls, commitments warrants or other rights of any kind to acquire, 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 in excess of $250,000 in the aggregate (other equity interests of than the Company or any direct or indirect wholly owned Subsidiary of the Company) except in accordance in all material respects with the Company’s investment policy in effect as of the date hereof (the “Investment Policy”), a copy of which is included in Schedule 6.1 of the Company Disclosure Letter; provided, however, that no investments whatsoever shall be made in those entities set forth on Schedule 6.1(a)(E) of the Company Disclosure Letter;
(F) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its Subsidiaries); capital stock (other than the Company’s regular quarterly cash dividends in respect of the Shares not to exceed $0.08 per share) or enter into any agreement with respect to the voting of its capital stock or otherwise make any payments to its stockholders in their capacity as such;
(iiiG) amendreclassify, modify split, combine, subdivide or waive any term redeem, purchase or otherwise acquire, directly or indirectly, or amend the terms of any outstanding of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than the acquisition of any Shares tendered by current or former employees or directors in connection with the exercise of Company Options or pursuant to puts and calls in employee and former employee stockholder agreements);
(H) incur, assume or prepay any indebtedness for borrowed money or guarantee such indebtedness of another Person (other 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, except for borrowings in the ordinary course under the Company’s credit facility, a copy of which has been made available to Parent (Aand which shall not be amended, waived or modified after the date hereof) as required by this Agreement, (B) as set forth in Section 5.01(b) the proceeds of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansshall be used for operating purposes;
(cI) the Company shall not (i) sell, transfer make or pledge, or agree to sell, transfer or pledge, authorize any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not expenditure in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 1,000,000 in the aggregate;
(kJ) the Company shallmake any material changes with respect to actuarial, and shall cause its Subsidiaries tomarketing, (i) continue underwriting, claims management, pricing, reserving, reinsurance, investment or accounting policies or procedures, except as required by changes in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary GAAP or loss payable payee to be canceled Law or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithby a Governmental Entity;
(lK) except as set forth in Section 5.01(l) of the Company Disclosure Schedulewaive, the Company shall notrelease, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreementassign, settle or compromise any Tax claim, assessment litigation or other proceedings before a Governmental Entity for an amount in excess of $500,000 or any obligation or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedulein excess of such amount, consent to in any extension or waiver case without the imposition of the limitation period applicable to any Tax claim or assessment relating to the Company equitable relief or any of its Subsidiariesrestrictions on the business and operations of, or take any other similar action, or omit to take any action relating to the filing of any Tax Return on or the payment admission of any Taxwrongdoing by, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(pL) the Company shall change or make any material Tax election, settle or compromise any material Tax liability or change any material method of accounting with respect to Taxes;
(iM) use its commercially reasonable efforts totransfer, and shall cause its Subsidiaries to use their respective commercially reasonable efforts tosell, prevent the termination lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or otherwise dispose of any Contract with any Significant Customerassets, (ii) notsecurities, and shall cause its Subsidiaries not to, amend product lines or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries thanand including by merger, consolidation, asset sale or other business combination, other than obsolete assets in the terms ordinary course of such Contract business and investments in accordance in all material respects with the Investment Policy;
(N) except as contemplated by this Agreement, required pursuant to agreements in effect prior to the making date of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter intothis Agreement, or materially amendas otherwise required by applicable Law, modify (1) grant or supplementprovide any severance or termination payments or benefits to any director, any Lease elected officer of the Company listed on Schedule 6.1(a)(N) (the “Elective Officers”) or other Material Contract under which the costs or obligations employee of the Company or any of its Subsidiaries resulting from such amendmentSubsidiaries, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendmentsexcept, modifications and supplements in the aggregate; and
case of employees who are not Elective Officers, in the ordinary course of business, (q2) increase the compensation or make any new equity awards to any director, Elective Officer or employee of the Company shall not, and shall not permit or any of its Subsidiaries toSubsidiaries, agree except, in the case of employees who are not Elective Officers of the Company, in the ordinary course of business, (3) establish, adopt, terminate or materially amend any Benefit Plan (other than as may be necessary to comply with applicable Laws or to avoid adverse Tax consequences) or (4) enter into, amend, waive or terminate (other than terminations in accordance with their terms) any Affiliate Transaction;1
(O) enter into, renew, extend, amend or terminate any Material Contract (other than Company Producer agreements in the ordinary course of business);
(P) take any action that would reasonably be expected to result in a reduction of any financial ratings of the Company, including the insurer financial strength ratings of the Company and its insurance Subsidiaries; or
(Q) except as provided in Section 6.2 and Section 8.3(a), agree, authorize or commit to do any of the foregoing.
(b) Parent shall not knowingly take or permit any of its Subsidiaries to take, directly or indirectly, any action that is reasonably likely to prevent, delay or impair the consummation of the Merger.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company (a) Yankees covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date hereof and until the earlier of this Agreement to the Yankees Effective Time (or until the termination of this Agreement in accordance with Article 7 hereof):its terms, unless Braves shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in Section 4.1(a) of the Yankees Disclosure Letter:
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships consistent with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessespast practice;
(bii) the Company shall not, and (A) it shall not issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) it shall not amend its certificate of incorporation or bylaws; (C) it shall not split, combine or reclassify its outstanding shares of capital stock; (D) 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 the quarterly dividends payable by Yankees (in an amount per share not to exceed its most recent quarterly per share dividend and with the timing of such dividend to be consistent with past practice) or, subject to Section 4.1(a)(viii) of the Yankees Disclosure Letter, dividends payable by its direct or indirect wholly owned Subsidiaries to it or another of its direct or indirectly wholly owned Subsidiaries; and (E) it shall not repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge any interests or otherwise encumber shares of its capital stock, as applicable, or any securities convertible into or exchangeable or exercisable for any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents stock;
(including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (iiiii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or neither it nor any of its Subsidiaries shall (includingA) issue, without limitationsell, pledge, dispose of or encumber (w) any shares of, or (x) securities payable in, convertible into or exchangeable or exercisable for, or (y) options, warrants, calls, commitments or rights of any kind to acquire, capital stock of any class, as appropriate, or (z) any bonds, debentures, notes or other equity interests 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 matter or any other property or assets other than Yankees Shares issuable pursuant to stock-based awards outstanding on or awarded prior to the date hereof under the Yankees Stock Plans; (B) (1) increase the amount of net indebtedness for borrowed money, including any guarantee of such indebtedness, by $100,000,000 in excess of the Company net indebtedness set forth in the Yankees Financial Statement as of December 31, 2012 (it being understood that net indebtedness shall be calculated as the amount of debt less the sum of the amount of cash and marketable securities, in each case, set forth in the Yankees Financial Statements as of December 31, 2012; it being further understood that notwithstanding the amount set forth in such Yankees Financial Statements, the non-U.S. dollar-denominated portion of such calculation shall be determined using the exchange rates in effect as of the date hereof without regard to any subsequent changes in such rates) or (2) incur any additional indebtedness for borrowed money with a tenor of its Subsidiaries)greater than 90 days, including any guarantee of such indebtedness; or (iiiC) amendmake or authorize or commit for any capital expenditures, modify except for in accordance with the 2013 capital expenditure target for Yankees that has been provided to Braves prior to the date of this Agreement or waive such other capital expenditures targets as may be agreed by Yankees and Braves (provided that (1) Yankees shall be permitted to make or authorize or commit for any term of any outstanding security of the Company or any capital expenditures in an amount that is between 75% and 110% of its Subsidiariescapital expenditure target and (2) if the Yankees Effective Time shall not have occurred on or prior to December 31, 2013, then, for purposes of this Section 4.1(a)(iii), Yankees’s capital expenditure target will be adjusted upwards to take into account the number of days between December 31, 2013 and the Yankees Effective Time and assuming that the 2014 capital expenditure target shall be equal to the 2013 capital expenditure target);
(iv) except (A) as required by this Agreementpursuant to existing written, (B) as binding agreements in effect prior to the date hereof and set forth in Section 5.01(b4.1(a)(iv) of the Company Yankees Disclosure ScheduleLetter, in connection with accelerating the vesting schedules of the Options to the extent or as otherwise required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sellapplicable Law, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company Yankees nor any of its Subsidiaries shall (iA) grant or agree provide any severance or termination payments or benefits to any director, officer or employee of Yankees or any of its Subsidiaries, (B) increase in any manner the compensation compensation, bonus, pension, welfare, fringe, severance or other benefits of of, pay any current bonus to, or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into make any new or materially amend any existing Contract, transaction, commitment or arrangement with equity awards to any current or former director, officer, employee or affiliate consultant of the Company Yankees or any of its SubsidiariesSubsidiaries (other than increases in base salary in the ordinary course of business for employees who are not officers), (C) become a party to, establish, adopt, commence participation in, amend or terminate any stock option plan or other stock-based compensation plan, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Scheduleany compensation, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (includingseverance, without limitationpension, Section 2.02 hereof)retirement, become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminateprofit-sharing, or pay any benefit that is not required bywelfare benefit, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan agreement with or policy for the benefit of any current or former directordirectors, officer officers, employees or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any consultants of Yankees or its Subsidiaries to(or newly hired employees) or amend the terms of any outstanding equity-based awards, (xD) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (E) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any collective bargaining agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person with a labor union, works council or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedulesimilar organization, (iiF) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor change any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization actuarial or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary assumptions used to calculate funding obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures any Benefit Plan or other planned capital expenditures other than to change the manner in which contributions to such plans are made or the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of basis on which such types and in such amounts as contributions are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereofdetermined, except as may be required as a result by GAAP, (G) terminate without cause the employment of a change in applicable Law or in GAAP;
(n) any member of the Company shall not, and shall not permit any management committee of its Subsidiaries to, takeYankees, or agree (H) forgive any loans or commit issue any loans to takedirectors, any action that would, officers or is reasonably likely to, make any representation or warranty employees of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company Yankees or any of its Subsidiaries;
(pv) neither Yankees nor any of its Subsidiaries shall lease, license, transfer, exchange or swap, mortgage (including securitizations), or otherwise dispose (whether by way of merger, consolidation, sale of stock or assets, or otherwise) of any material portion of its assets, including the Company capital stock of Subsidiaries (it being understood that the foregoing shall not prohibit the sale of inventory in the ordinary course of business), except for dispositions of assets that in total have an aggregate fair market value of less than $50,000,000;
(vi) neither Yankees nor any of its Subsidiaries shall (iA) use its commercially reasonable efforts toacquire or invest in or agree to acquire or invest in (whether by merger, consolidation, purchase or otherwise) any Person or assets, in which the expected gross expenditures and shall cause commitments (including the amount of any indebtedness assumed) (1) for all such acquisitions exceeds, in the aggregate, $50,000,000 or (2) is reasonably likely, individually or in the aggregate, to delay the satisfaction of the conditions set forth in Article V hereof or prevent the satisfaction of such conditions or (B) enter into any joint venture, partnership or similar agreement with any Person;
(vii) subject to Section 4.13, neither Yankees nor any of its Subsidiaries shall (A) settle or compromise 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 Yankees or its Subsidiaries of $60,000,000 (provided that Yankees shall consult in good faith with respect to use their respective commercially reasonable efforts to, prevent the termination any such proposed settlement or compromise individually in excess of $20,000,000) or more or would involve any Contract with admission of material wrongdoing or any Significant Customermaterial conduct requirement or restriction by Yankees or its Subsidiaries, (iiB) not, and shall cause its Subsidiaries not tomodify, amend or terminate in any material respect any of its Material Contracts or waive, release or assign any material rights or claims thereunder in excess of $10,000,000 individually or in the aggregate or (C) enter into any new clearing services agreement or arrangement or modify or amend in any Contract with material respect any Significant Customer, other than on terms substantially equivalent to, existing clearing services agreement or more beneficial on balance arrangement to extend the Company term or to increase the commitments of Yankees or any of its Subsidiaries than, the terms of such Contract prior subsidiaries thereunder;
(viii) except to the making of such amendment or modificationextent otherwise required by Law, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or neither Yankees nor any of its Subsidiaries resulting from shall (A) make or change any Tax election, change any method of Tax accounting, file any amended Tax Return, or settle or compromise any audit or proceeding relating to Taxes, in each case, if such amendmentaction would reasonably be expected to have an adverse effect on Yankees and its Subsidiaries that is material, modification (B) take any action specified in Section 4.1(a)(viii)(B) of the Yankees Disclosure Letter or supplement would exceed $25,000 per annum individually (C) permit any material insurance policy naming it as a beneficiary or $100,000 per annum for all such amendments, modifications and supplements loss-payable payee to be cancelled or terminated except in the aggregateordinary and usual course of business;
(ix) neither Yankees nor any of its Subsidiaries shall permit any change in its financial 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 financial accounting principles, policies or practices shall be required by changes in GAAP;
(x) neither Yankees nor any of its Subsidiaries shall enter into any Contract that includes a “non-compete,” exclusivity or similar provision that would materially restrict the business of Braves, Parent or any of their Subsidiaries (including Yankees and its Subsidiaries) following the Yankees Effective Time;
(xi) except as permitted pursuant to Section 4.1(a)(iv), neither Yankees nor any of its Subsidiaries shall enter into any Contract between itself, on the one hand, and any of its employees, officers or directors, on the other hand;
(xii) neither Yankees nor any of its Subsidiaries shall knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede (A) either of the Mergers from qualifying as a reorganization within the meaning of Section 368(a) of the Code, or (B) with respect to the Alternative Transaction, the Mergers, taken together, from qualifying as a transaction described in Section 351 of the Code;
(xiii) neither Yankees nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing set forth in Section 4.1(a)(i) through Section 4.1(a)(xii) if Yankees would be prohibited by the terms of Section 4.1(a)(i) through Section 4.1(a)(xii) from doing the foregoing; and
(qxiv) it shall not fail to make in a timely manner any filings with the Company SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder.
(b) Braves covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the Yankees Effective Time or the termination of this Agreement in accordance with its terms, unless Yankees shall nototherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in Section 4.1(a) of the Braves Disclosure Letter:
(i) it shall not (A) split, combine or reclassify its outstanding shares of capital stock, (B) declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any of its capital stock, and (C) directly or indirectly repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries toto purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, if such repurchase or acquisition is at a price above the then market value;
(ii) it shall not issue, sell, dispose of or grant, or authorize the issuance, sale, disposition or grant of, any shares of any class of its capital stock except (A) for fair market value or (B) upon the vesting of restricted stock units or the exercise of options, warrants, convertible securities or other rights of any kind to acquire any of its capital stock which were issued with an exercise or conversion price of not less than the market price at the time of issuance; provided, however, that the foregoing shall not prohibit issuances of common stock, restricted stock units, options or rights as part of normal employee compensation in the ordinary course of business; and provided, further, that this clause (B) shall not prohibit the issuance of capital stock, restricted stock units, options, warrants, convertible securities or other rights in connection with any equity financing contemplated by Braves or Parent in connection with the transactions contemplated by this Agreement;
(iii) it shall not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(iv) neither it nor any of its Subsidiaries shall knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede (A) either of the Mergers from qualifying as a reorganization within the meaning of Section 368(a) of the Code, or (B) with respect to the Alternative Transaction, the Mergers, taken together, from qualifying as a transaction described in Section 351 of the Code;
(v) neither it nor any of its Subsidiaries shall acquire (other than with respect to any agreements entered into prior to the date of this Agreement) or agree to acquire (whether by merger, consolidation, purchase or commit otherwise, which have been previously publically disclosed or provided to Yankees) any Person or assets that is reasonably likely, individually or in the aggregate, to delay in any material respects the satisfaction of the conditions set forth in Article V hereof or prevent the satisfaction of such conditions; and
(vi) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing set forth in Section 4.1(b)(i) through Section 4.1(b)(v) if it would be prohibited by the terms of Section 4.1(b)(i) through Section 4.1(b)(v) from doing the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented agreed to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article ARTICLE 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties others having business dealings with them and to preserve the goodwill of their respective businessesgoodwill;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiariessubsidiaries, any other voting securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights, phantom interests and stock purchase rights (whether pursuant to the 1996 Option Plan or phantom interestsotherwise)), except for issuances of Common Shares upon the exercise of Options outstanding as of prior to the date hereof; hereof or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiariessubsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiariessubsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries subsidiaries to amend its articles certificate of incorporation, bylaws or bylaws equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries subsidiaries to the Company or with respect to other wholly owned Subsidiaries of the Company consistent with past practicescapital stock);
(e) neither the Company nor any of its Subsidiaries subsidiaries shall (i) grant or agree to any increase in any manner in the compensation or fringe benefits of of, or pay any bonus to, any current or former director, officer or employee, employee except increases in the ordinary course of business consistent with past practice, for increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section SECTION 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock PlansSchedule, (ii) subject to the covenants set forth in clause (i) of this SECTION 5.01(e), enter into any new or materially amend any existing Contractemployment, transaction, commitment severance or arrangement termination agreement with any current or former director, officer, officer or employee or affiliate of the Company or any other than in the ordinary course of its Subsidiariesbusiness consistent with past practice, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof)Agreement, become obligated under any Benefit Plan that was not in existence on the date hereof or amend or amend, modify or terminate, or pay any benefit that is not required by, terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofhereof or (iv) pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock);
(f) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing all or substantially all the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof thereof, other than acquisitions purchases of inventory, supplies or purchases made equipment parts in the ordinary course of business consistent with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionspast practice;
(g) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets, including any Company Intellectual Property, other than (xi) pursuant to existing contracts and commitments described in SECTION 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets or Company Intellectual Property (or immaterial portions of properties or assets or Company Intellectual Property) and (iii) inventory in the ordinary course of business consistent with past practice;
(h) the Company shall not, and shall not permit any of its subsidiaries to, incur, assume, be responsible for assume or pre-pay any Indebtedness, indebtedness for borrowed money or enter into any agreement to, to incur, assume, be responsible for assume or pre-pay any Indebtednessindebtedness for borrowed money, or guarantee, or agree to guarantee, any such Indebtedness indebtedness or Liabilities or obligations obligation of another person, or issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiariessubsidiaries, guarantee any debt securities of others, enter into any “"keep well” " or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; , other than borrowings by the Company under SECTION 5.15 or under its existing credit agreement;
(yi) sellthe Company shall not, leaseand shall not permit any of its subsidiaries to, license make or subject to forgive any Lien loans, advances or otherwise dispose capital contributions to, guarantees for the benefit of, or agree to sell, lease or subject to any Lien or otherwise dispose ofinvestments in, any of its properties person or assets in excess of $25,000 individually or $50,000 in the aggregate entity (other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by loans between or among the Company and the Company’s Subsidiariesany of its wholly-owned subsidiaries);
(hj) the Company shall not, and shall not permit any of its subsidiaries to, assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except for the obligations of the subsidiaries of the Company permitted under this Agreement;
(k) neither the Company nor any of its Subsidiaries subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries subsidiaries (other than any transaction specifically contemplated by this Agreement);
(il) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, (i) enter into, or materially amend, modify or supplement any Material Contract or License Agreement outside of the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), ) or (ii) waive, release, grant, assign, modify assign or transfer any of its material rights or claims (whether such rights or claims arise under a Material Contract or otherwise);
(jm) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(jSECTION 5.01(m) of the Company Disclosure Schedule by categorySchedule) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 100,000 in the aggregateaggregate for the Company and its subsidiaries taken as a whole;
(kn) the Company shall, and its subsidiaries shall comply with their non-monetary obligations (and shall cause use their reasonable best efforts to comply with their monetary obligations) under the Material Contracts and License Agreements as such obligations become due;
(o) the Company and its Subsidiaries to, subsidiaries (i) shall continue in force insurance with good and responsible insurance companies adequately adequate insurance covering risks of such types and in such amounts as are consistent with the Company’s 's past practices and its Subsidiaries’ past practices, (ii) use reasonable best efforts shall not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminatedterminated without the prior written approval of Parent;
(p) the Company shall not, and shall not permit any of its subsidiaries to, enter into, amend, modify or supplement any agreement, transaction, commitment or arrangement with any current or former officer, director, employee or other affiliate of the Company or any of its subsidiaries (or any affiliate of any of the foregoing) other than agreements, transactions, commitments and arrangements (i) permitted by SECTION 5.01(e) hereof or (ii) as otherwise expressly contemplated by this Agreement;
(q) the Company shall not, and shall not permit any of its subsidiaries to, establish or acquire (i) any subsidiary other than wholly-owned subsidiaries or (ii) subsidiaries organized outside of the United States and its territorial possessions;
(r) the Company shall not, and shall not permit any of its subsidiaries to, amend, modify or waive any term of any outstanding security of the Company and any of its subsidiaries, except as required by this Agreement;
(s) the Company shall, and shall cause its subsidiaries to, (iiii) maintain all Leased Real Property any real property to which the Company and any of its subsidiaries have a leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respectscondition, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Lienscondemnation, subject to the expiration of real property leases in accordance with their terms, and (ivii) pay, prior to the imposition of any Lien or material penalty timely pay all taxes, water and sewage rents, assessments and insurance premiums affecting such real property and (iii) timely comply in all material respects with the terms and provisions of all leases, contracts and agreements relating to affecting such real property and the use and operation thereof, in all cases to the extent required by any such lease, contract or contest them in good faithagreement;
(lt) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Lawunion;
(mu) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, settle or compromise any pending or threatened suit, action, claim or litigation (except in the ordinary course of business and with prior written notice to Parent);
(v) the Company shall not, and shall not permit any of its subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of and its Subsidiaries subsidiaries as of the date hereofMarch 31, 2001, except as may be required as a result of a change in applicable Law law or in GAAPUnited States generally accepted accounting principles;
(nw) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory in any material manner or the write-off of notes or accounts receivable in any material manner;
(x) the Company shall not, and shall not permit any of its subsidiaries to, make or change any material tax election, make or change any method of accounting with respect to Taxes, file any amended Tax Return or settle or compromise any material tax liability;
(y) the Company shall not, and shall not permit any of its subsidiaries to, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice (and in a manner that is not more rapid than past practice);
(z) the Company shall not, and shall not permit any of its subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions to the Merger set forth in Article ARTICLE 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;; and
(oaa) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Rockshox Inc)
Interim Operations. Except (a) The Company shall, and shall cause each of its Subsidiaries to, from and after the date of this Agreement and prior to the Effective Time (unless Parent and Merger Sub shall otherwise approve in writing, with such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise contemplated expressly required by this Agreement or as set forth required by applicable Law, conduct its business in Section 5.01 the Ordinary Course of the Company Disclosure Schedule or as consented to in writing by ParentBusiness and, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination extent consistent therewith, shall use and cause each of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall to use their commercially respective reasonable best efforts to to, preserve its and their business organizations intact their current business organizationsand maintain satisfactory relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of and in furtherance of the foregoing sentence, from the date of this Agreement until the Effective Time, except as otherwise expressly required by this Agreement, required by applicable Law, or as approved in writing by Parent, with such approval not to be unreasonably withheld, conditioned or delayed, the Company shall not and shall cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents other material third parties having business dealings with them and than pursuant to preserve the goodwill of their respective businessestransactions contemplated by this Agreement;
(bii) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliversell, sell or agree or commit to issuepledge, sell or deliver (whether through the issuance or granting of optionsdispose of, commitmentsgrant, subscriptionstransfer, rights to purchase or otherwise)lease, pledge license, guarantee, Encumber, or otherwise encumber enter into any Contract or understanding with respect to the voting of, any shares of its capital stock of the Company (including, for the avoidance of doubt, Company Shares) or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exchangeable into or exercisable intofor any such shares of capital stock, or any rightsoptions, warrants or options other rights of any kind to acquire, acquire any such sharesshares of capital stock or such convertible or exchangeable securities, securities other than the issuance of shares of capital stock (A) by a Wholly Owned Subsidiary of the Company to the Company or convertible securities another Wholly Owned Subsidiary of the Company, or any other securities or equity equivalents (includingB) in respect of Preferred Shares, without limitationCompany Options, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Warrants and Management Options outstanding as of the date hereof; of this Agreement or issued after the date of this Agreement in each case in accordance with their terms, (iiC) repurchaseas applicable, redeem or otherwise acquire the Incentive Plan as in effect on the date of this Agreement, and (D) the Series C Financing;
(iii) enter into any shares of the capital stock Contracts or other equity interests of arrangements between the Company or any of its Subsidiaries Subsidiaries, on the one hand, and any director or officer of the Company or any Person beneficially owning five percent or more of the outstanding Company Shares (including, without limitation, securities exchangeable for, on a fully diluted basis) or options, warrants, calls, commitments or rights shares of common stock of any kind to acquireof their respective Affiliates, capital stock on the other hand, except for compensatory arrangements entered into in the Ordinary Course of Business with Company Employees and transactions with its Affiliates;
(iv) create or other equity interests incur any Encumbrance that is not incurred in the Ordinary Course of Business on any of the assets of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(cv) the Company shall not (i) selldeclare, transfer set aside, make or pledgepay any dividend or other distribution, payable in cash, stock, property or agree otherwise, with respect to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company;
(vi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiaries to split, combine capital stock or reclassify securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(dvii) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practicesamend, the Company shall notmodify, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, cancel or pay any benefit that is not required bylet lapse an Insurance Policy, any Benefit Plan unless simultaneous with such termination, cancellation or other employee benefit plan or any agreementlapse, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than nonreplacement self-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that insurance programs are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any one or more of its Subsidiaries shall adopt or put into effect a plan replacement policies underwritten by insurance and reinsurance companies of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth nationally recognized standing are in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, full force and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, excepteffect, 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 required by Law;
(m) the Company shall notapplicable, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as in effect as of the date hereofof this Agreement;
(viii) make any changes with respect to the legal structure of the Company and its Subsidiaries or to their accounting policies or procedures, except as may be required as a result of a change in applicable Law or by changes in GAAP;
(nix) the Company shall notmake, and shall not permit change or revoke any of its Subsidiaries toTax election, takechange an annual Tax accounting period, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make adopt or change any material tax election or change an annual Tax accounting period with respect to Taxesmethod, file any amended Tax Return, enter into any closing agreementagreement with respect to Taxes, settle or compromise any Tax claim, audit, assessment or liability relating to the Company or any of its Subsidiariesdispute, or surrender any right to claim a refund of Taxes, except as set forth or take any action which would be reasonably expected to result in Section 5.01(o) an increase in the Tax liability of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar actionor, or omit to take any action relating to the filing in respect of any Tax Return taxable period (or portion thereof) ending after the payment of any TaxClosing Date, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability of Parent, Merger Sub or materially decreasing their Affiliates;
(x) cancel, abandon or otherwise allow to lapse or expire any present or future Tax benefit Company Intellectual Property Rights, except in the Ordinary Course of Business with respect to Intellectual Property Rights that are not material to any business of the Company or any of its Subsidiaries;
(pxi) become 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;
(xii) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xiii) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries operate or are otherwise subject to use their respective commercially reasonable efforts to, prevent jurisdiction;
(xiv) take any action or fail to take any action that is reasonably expected to result in any of the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance conditions to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries Merger set forth in Article VIII not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregatebeing satisfied; andor
(qxv) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
(b) 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.
(c) Parent shall, and shall cause each of its Subsidiaries to, from and after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, with such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly required by this Agreement or as required by applicable Law, conduct its business in the Ordinary Course of Business and, to the extent consistent therewith, shall use and cause each of its Subsidiaries to use their respective reasonable best efforts to, preserve its and their business organizations intact and maintain satisfactory relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of and in furtherance of the foregoing sentence, from the date of this Agreement until the Effective Time, except as otherwise expressly required by this Agreement, required by applicable Law, required by the express terms of any material contract made available to Company, as approved in writing by Company, with such approval not to be unreasonably withheld, conditioned or delayed, or set forth in the corresponding subsection of Section 7.1(c) of the Parent Disclosure Letter, Parent shall not and shall cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate Parent or any of its Subsidiaries 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 assets, operations or businesses;
(iii) acquire assets from any other Person;
(iv) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of Parent 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 the issuance of shares of capital stock by a Wholly Owned Subsidiary of Parent to Parent or another Wholly Owned Subsidiary of Parent;
(v) enter into any Contracts or other arrangements between Parent or any of its Subsidiaries, on the one hand, and any director or officer of Parent or any Person beneficially owning five percent or more of the outstanding Company Shares or shares of common stock of any of their respective Affiliates;
(vi) create or incur any Encumbrance that is not incurred in the Ordinary Course of Business on any of the assets of Parent or any of its Subsidiaries;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from Parent and any of its Wholly Owned Subsidiaries);
(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 for (A) dividends paid by any Wholly Owned Subsidiary to Parent or to any other Wholly Owned Subsidiary of Parent;
(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 material Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security);
(xi) enter into any Contract other than Contracts entered into in the Ordinary Course of Business with payment obligations not to exceed $50,000;
(xii) cancel, modify or waive any debts or claims held by Parent or any of its Subsidiaries or waive any material rights;
(xiii) amend, modify, terminate, cancel or let lapse an Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by Parent or one or more of its Subsidiaries or replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing 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;
(xiv) other than settlement of trade accounts payable in the Ordinary Course of Business, settle or compromise any Proceeding for an amount in excess of $20,000 individually or $50,000 in the aggregate during any calendar year;
(xv) make any changes with respect to the legal structure of the Company and its Subsidiaries or to their accounting policies or procedures, except as required by changes in GAAP;
(xvi) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute, surrender any right to claim a refund or take any action which would be reasonably expected to result in an increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent, Merger Sub or their Affiliates;
(xvii) transfer, sell, lease, divest, cancel, allow to lapse or expire, or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any assets (tangible or intangible, including any Intellectual Property Rights and Programs), Licenses, product lines or businesses of the Company or any of 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) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property Rights, except in the Ordinary Course of Business with respect to Intellectual Property Rights that are not material to any business of the Company or any of its Subsidiaries;
(xix) become 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) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xxi) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company and its Subsidiaries operate or are otherwise subject to jurisdiction;
(xxii) take any action or fail to take any action that is reasonably expected to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; or
(xxiii) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. Except The Company covenants and agrees as otherwise contemplated by to itself and its Subsidiaries that, from the date of this Agreement until the Effective Time, except as specifically permitted by any other provision of this Agreement (or as set forth in Section 5.01 7.1 of the Company Disclosure Schedule Letter) or as consented required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to in writing by the Company or except with Parent’s prior written approval, which approval shall not be unreasonably withheld, the Company covenants and agrees that during the period from the date business of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and consistent with past practice and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees protect and preserve their relationships the scope and breadth of its assets and the Company Intellectual Property and to preserve its business organization intact and maintain its existing relations and goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors outside counsel, clinical trial investigators or managers of its clinical trials, employees and other material third parties having business dealings with them consultants. Without limiting the generality of the foregoing, and to preserve the goodwill of their respective businesses;
(b) as an extension thereof, the Company shall not, not and shall not permit any of its Subsidiaries to, (i) authorize for issuancefrom the date of this Agreement until the Effective Time, issuedirectly or indirectly, deliverdo, sell or agree to do, any of the following without the prior written consent of Parent:
(a) amend or commit propose to issueamend the certificate of incorporation or bylaws or other comparable governing instruments of the Company or any of its Subsidiaries or amend, sell modify or deliver waive any provision of the Rights Agreement;
(whether through b) acquire (including, without limitation, by merger, consolidation, or acquisition of stock, assets or Intellectual Property or any other business combination) any corporation, partnership, other business organization or any division thereof or any assets or interest in any assets from any other Person in excess of $500,000 individually or $1,000,000 in the issuance aggregate;
(c) split, combine or granting reclassify its outstanding shares of optionscapital stock of the Company nor enter into any agreement with respect to voting of any of its capital stock, commitmentsor any securities convertible into or exchangeable for such shares;
(d) declare, subscriptionsset aside or pay any dividend or other distribution, rights payable in cash, stock, property or otherwise, in respect of the capital stock of the Company or any of its Subsidiaries, other than dividends from its wholly-owned Subsidiaries;
(e) purchase, redeem or otherwise acquire, except in connection with the Company Option Plan, the Preferred Stock or the AZ Note, or permit any of its Subsidiaries to purchase or otherwise), pledge or otherwise encumber acquire any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock stock;
(f) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or other equity interests encumber any material property or assets or interest therein of the Company or any of its Subsidiaries (includingincluding (i) Intellectual Property material to the business of the Company and its Subsidiaries, without limitationbut excluding non-exclusive Intellectual Property licenses granted in the ordinary course of business to third parties, and (ii) capital stock of any of the Company’s Subsidiaries);
(g) incur any indebtedness for borrowed money or issue any debt securities or warrants or other rights to acquire debt securities of the Company or any of its Subsidiaries or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any other Person, in the case of any of the foregoing, involving an aggregate principal amount or potential guaranteed amount in excess of $500,000 or otherwise incur or modify any material indebtedness or liability;
(h) 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, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit stock of any of its Subsidiaries to split, combine class or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside Voting Debt or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties property or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreementin accordance with the Rights Agreement and other than shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Stock Plan or upon conversion of the Convertible Notes, the AZ Note or the Preferred Stock);
(i) make or agree to make any capital expenditures other than any such expenditure (A) not in excess of $200,000 individually or $1,000,000 in the aggregate or (B) in conformance with the Draft ET Meeting 2006 Plan Review, dated December 7, 2005, furnished to Parent prior to the date hereof;
(j) waive any benefits of, agree to modify in any respect, fail to enforce or consent to any matter with respect to which consent is required under any (i) standstill or similar agreement containing provisions prohibiting a third party from purchasing the capital stock or assets of the Company or any of its Subsidiaries or otherwise seeking to influence or exercise control over the Company or any of its Subsidiaries and to which the Company or any of its Subsidiaries is a party or (ii) confidentiality, non-solicitation or similar agreements to which the Company or any of its Subsidiaries is a party, excluding, however, waivers of confidentiality relating to non-material Intellectual Property in the ordinary course of business consistent with past practice;
(k) make any change in accounting practices, policies or principles, except as required by GAAP or by Law or a Governmental Entity as concurred to by the Company’s independent auditors;
(l) enter into, modify, amend or terminate, or waive, release or assign any material rights or claims under (i) any Contract pursuant to which the Company, any of its Subsidiaries or any other party thereto has material continuing obligations, rights or interests relating to research, development, clinical trial, distribution, supply, manufacturing, marketing or co-promotion of, or collaboration with respect to, any product or product candidate for which the Company or any of its Subsidiaries is currently engaged in research and development (excluding (A) clinical study agreements with clinical trial sites, (B) non-disclosure agreements (other than non-disclosure, standstill and exclusivity agreements relating to potential business combinations or acquisitions involving the Company or any of its Subsidiaries or similar transactions), (C) Contracts with independent contractors or vendors providing for services to the Company or any of its Subsidiaries (other than material manufacture or supply services Contracts or material Contracts with contract research organizations for clinical trials related services), and (D) customary material transfer Contracts (other than material transfer Contracts for pre-clinical products or clinical products of the Company or any of its Subsidiaries with commercial, pharmaceutical or biotechnology companies), in the case of each of the foregoing (A), (B), (C) or (D), entered into in the ordinary course of business consistent with past practice); or (ii) any Contract pursuant to which the Company, any of its Subsidiaries or any other party thereto has, or will have, material continuing obligations, rights or interests;
(m) make any material loan, advance, capital contribution to, or investment in, any Person other than (i) loans, advances or capital contributions to, or investments in, wholly-owned Subsidiaries of the Company and (ii) loans, advances or capital contributions to, or investments in, any other Person in an amount not in excess of $250,000 in the aggregate;
(n) enter into, modify, amend or terminate any Contract or waive, release or assign any rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would be reasonably likely to (i) adversely affect the Company (or, following the Merger, Parent or any Affiliates of Parent) in any material respect, (ii) impair the ability of the Company to perform its obligations under this Agreement in any material respect, (iii) prevent or materially delay or impair the consummation of the Merger and the other transactions contemplated by this Agreement or (iv) limit or restrict the Surviving Corporation, any Affiliate of the Surviving Corporation or any of their successors and assigns from engaging or competing in any line of business, including the research, development and commercialization of any antibody or therapeutic agent directed at a specific antigen or other target or in any therapeutic area, or in any geographic area;
(o) pre-pay any long-term debt or accelerate or delay any material payments or the collection of payment due to the Company, except in the ordinary course of business consistent with past practice;
(p) unless reasonably determined to be beneficial to the Company’s prosecution of its patent or Trademark applications, (i) grant, extend, amend (except as required in the diligent prosecution of the Company Intellectual Property), waive or modify any material rights in or to the Company Intellectual Property, Co-Owned Intellectual Property or Licensed Intellectual Property, (ii) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (iii) fail to exercise a right of renewal or extension under any material Licensed Intellectual Property;
(q) (i) increase the number of employees of the Company and the Company Subsidiaries by more than 4.5%, based on the number of employees employed by the Company and the Company Subsidiaries as of the date hereof, or (ii) enter into an employment agreement or relationship, other than an “at will” employment relationship, with any Person;
(r) except as required pursuant to existing written, binding agreements in effect prior to the date hereof and set forth in Section 5.01(i) 5.8 of the Company Disclosure ScheduleLetter, the Company shall not, and shall not permit any as provided in Section 4.5 of its Subsidiaries tothis Agreement or as otherwise required by applicable Law or tax qualification requirement, (i) enter intogrant or provide or adopt a plan intended to grant or provide any retention, 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 materially amendmake any new equity awards to any director, modify officer or supplement employee of the Company or any Contract outside of its Subsidiaries, except for increases in base salary in the ordinary course of business consistent with past practice under which for employees who are not officers that do not exceed, on average, 5.0% of the Company or any base salary of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether those receiving such rights or claims arise under a Contract or otherwise);
(j) the Company shall notsalary increases, and shall that the increases are not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts being given as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminatedpromotional increases, (iii) maintain all Leased Real Property (includingestablish, without limitationadopt, amend or terminate any Company Benefit Plan or amend the furnitureterms of any outstanding equity-based awards, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) paytake any action to accelerate the vesting or payment, prior or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the imposition of extent not already provided in any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries toBenefit Plan, (iv) materially amend change any currently existing labor actuarial or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment assumptions used to or relating calculate funding obligations with respect to any labor union, Company Benefit Plan or (ii) enter into any labor to change the manner in which contributions to such plans are made or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union the basis on which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereofsuch contributions are determined, except as may be required as a result of a change in by GAAP or applicable Law Laws; or in GAAP;
(nvi) the Company shall notissue or forgive any loans to directors, and shall not permit any of its Subsidiaries toofficers, take, contractors or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit employees of the Company or any of its Subsidiaries;
(ps) communicate with Company employees regarding the compensation, benefits or other treatment they will receive in connection with the proposed Merger, unless any such communications are consistent with prior directives or documentation provided to the Company by Parent (in which case, the Company shall provide Parent with prior notice of and the opportunity to review and comment upon any such communications);
(it) use its commercially reasonable efforts tomake any material Tax election or settle or compromise any material liability for Taxes, and shall cause its Subsidiaries change any annual Tax accounting period (except as required by Law), change any Tax accounting method (except as required by Law), file any material amended Tax Return, enter into any closing agreement relating to use their respective commercially reasonable efforts toany material Tax, prevent surrender any right to claim a material Tax refund or consent to any extension or waiver of the termination statute of limitations period applicable to any material Tax claim or assessment;
(u) in respect of any Contract with any Significant CustomerContract, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent grant rights thereunder to, or more beneficial on balance to accept the Company designation thereunder of, any newly proposed antigen, which grant or designation would limit or restrict Parent or any of its Subsidiaries Affiliates (other than, following the Effective Date, the Company and its Subsidiaries) from researching, developing or commercializing any antibody or other therapeutic agent directed at such antigen, for any therapeutic area or in any geographic area, unless and only to the extent that any such failure to make such grant or acceptance will constitute a breach under such Contract and provided that the Company has provided to Parent at least 10 business days' prior written notice of any such grant or acceptance, which notice shall identify the antigen proposed to be designated, unless such disclosure is prohibited by the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregateContract; andor
(qv) the Company shall not, and shall not permit any of its Subsidiaries to, agree authorize or commit enter into an agreement to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Amgen Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or until termination of delayed) and except as otherwise expressly set forth in this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) the Company shall not, and it shall not (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its Organizational Documents or amend, modify or terminate the Rights Agreement; (C) other than in the case of any direct or indirect wholly owned Subsidiary, split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect A-24 wholly owned Subsidiaries and other than regular quarterly cash dividends not in excess of $0.165 per Share; (E) repurchase, redeem or otherwise acquire, except in connection with the Stock Plans, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(iii) neither it nor any of its Subsidiaries shall (includingA) issue, without limitationsell, 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 or other equity interests of the Company any class or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company Voting Debt or any of its Subsidiaries, other property or assets (other than Shares issuable under the Stock Plans) except (A) as required by this Agreement, (B) as set forth in Section 5.01(b6.1(a)(iii) of the Company Disclosure Schedule; (B) other than as set forth on Section 6.1(a)(iii)(B) of the Company Disclosure Schedule, products sold to customers in connection with accelerating the vesting schedules ordinary and usual course of business (without limitation as to dollar amount) or otherwise in the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) ordinary and usual course of business and not in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) an aggregate amount of more than $5,000,000, transfer, lease, license, guarantee, sell, transfer or mortgage, pledge, dispose of or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in encumber any other fashion the corporate structure property or ownership assets (including capital stock of any of its Subsidiaries); (C) incur or modify any indebtedness other than tax-exempt indebtedness, (ii) amend indebtedness existing solely between the Company and its wholly owned Subsidiaries or otherwise change its certificate between such wholly owned Subsidiaries or indebtedness in an aggregate amount less than $2,000,000; provided that prior to incurring any indebtedness, if practicable, the Company shall provide Parent with a reasonable right of incorporation or bylaws or permit consultation prior to incurring any such indebtedness; provided, further, that the foregoing right of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and consultation shall not permit apply in the case of indebtedness in respect of letters of credit, guarantees or performance bonds or indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries; (D) make or authorize or commit for any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) expenditures other than quarterly dividends not as set forth on Schedule 6.1(a)(iii) of the Company Disclosure Schedule or which, individually, is in excess of $0.075 per Common Share declared and paid consistent with past practices1,000,000 or, in the aggregate, are in excess of $5,000,000; provided that prior to making any expenditure not set forth on Schedule 6.1(a)(iii) of the Company Disclosure Schedule, if practicable, the Company shall notprovide Parent with a reasonable right of consultation prior to making any such expenditure; and (E) by any means, and shall not permit make any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property)acquisition of, or make any other distributions investment in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant stock of or agree to other interest in, any increase in any manner the compensation other Person or benefits of any current or former director, officer or employee, (ii) except increases in the ordinary and usual course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and assets of any other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, Person;
(ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iiiiv) except as set forth in Section 5.01(e6.1(a)(iv) of the Company Disclosure Schedule, or as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) terms of this Agreement, neither the Company it nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation(A) terminate, dissolutionestablish, mergeradopt, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, make any new grants or materially amendawards under, modify amend or supplement otherwise modify, any Contract outside Compensation and Benefit Plans except as required by law, (B) other than in the ordinary and usual course of business consistent with past practice under which and the Company or Company's compensation budget with respect to employees at a compensation level of less than $80,000 a year, increase the compensation of any employee, (C) hire any employee at a compensation level expected to be more than $100,000 a year;
(v) neither it nor any of its Subsidiaries shall have monetary obligations settle or compromise any material claims or litigation or, except in excess the ordinary and usual course of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)business modify, amend or (ii) waive, release, grant, assign, modify or transfer terminate any of its material Contracts or waive, release or assign any material rights or claims (whether such rights or claims arise under a Contract or otherwise)claims;
(jvi) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, authorize or shall make any capital expenditures (material Tax election or file any material income Tax Refund or implement or adopt any change in its accounting principles or material accounting practices, in all cases other than pursuant to commitments prior to the date hereof as may be required by applicable Laws or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregateGAAP;
(kvii) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming neither it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit nor any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission that it reasonably expects would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or cause any of its Subsidiaries;representations and warranties herein to become untrue in any material respect; and
(pviii) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or neither it nor any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment will authorize or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed) and except as otherwise expressly set forth in this Agreement):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) split, combine or reclassify its outstanding shares of capital stock; or (B) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries;
(iii) it shall not (A) enter into any transaction, other than as contemplated pursuant to this Agreement, to the extent any such transaction would require approval of the stockholders of Parent under applicable law or stock exchange rules; or (B) enter into an agreement relating to any acquisition, merger, consolidation or purchase that would reasonably be expected to (I) impose any material delay in the obtaining of, or significantly increase the risk of not obtaining, any authorizations, consents, orders, declarations or approvals of any Governmental Entity necessary to consummate the Merger or the expiration or termination of any applicable waiting period, (II) significantly increase the risk of any Governmental Entity entering an order prohibiting the consummation of the Merger, or (III) significantly increase the risk of not being able to remove any such order on appeal or otherwise;
(iv) amend Parent's or Merger Sub's Organizational Documents;
(v) neither it nor any of its Subsidiaries shall take any action or omit to take any action that it reasonably expects would cause any of its representations and warranties herein to become untrue in any material respect; and
(vi) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the The Company covenants and agrees that during the period from as to itself and ------------------ its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) Time, the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable respective best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them associates, and to preserve the goodwill of their respective businesses;
(b) neither the Company shall not, and shall not permit nor any of its Subsidiaries toshall take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect. By way of amplification of the foregoing and not limitation, neither the company nor any of its Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly, take any action, including but not limited to the following, except with the prior consent of a Designated Officer (as defined below):
(a) it shall not (i) authorize for issuanceamend its articles of incorporation or by-laws, issue, deliver, sell or agree or commit except as may be required to issue, sell or deliver (whether through increase the issuance or granting number of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock Common Stock in connection with the conversion of the Convertible Loan, the Series A Preferred or the capital stock of any of its SubsidiariesSeries B Preferred, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options in each case outstanding as of the date hereof; (ii) split, combine or reclassify its outstanding shares of capital stock; (iii) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (iv) repurchase, redeem or otherwise acquire any shares of the capital stock acquire, or other equity interests of the Company or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(includingb) neither it nor any of its Subsidiaries shall (i) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets, except for (x) issuances of Common Stock upon conversion of the Company Convertible Loan, the Series A Preferred or the Series B Preferred, in each case outstanding on the date hereof, and (y) issuances of Series B Preferred upon exercise of warrants outstanding on the date hereof; (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries); or (iii) amendmake or authorize or commit for any capital expenditures or, modify by any means, make any acquisition of, or waive investment in, assets or stock of or other interest in, any term of any outstanding security of the Company other Person or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansentity;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by neither it in nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or alter through mergerawards under, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate modify, any Company Compensation and Benefit Plans (including, without limitation, any grant or issuance of incorporation new Options, any amendment or bylaws changes to the terms of any Options or permit any repricing of its Subsidiaries to amend its articles of incorporationOptions), or bylaws increase the salary, wage, bonus or (iii) split, combine or reclassify other compensation of any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockemployees;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall settle or compromise any material claims or litigation or modify, declare, set aside amend or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, terminate any of its capital stock (except for dividends paid by direct material Contracts or indirect wholly owned Subsidiaries to the Company waive, release or to other wholly owned Subsidiaries of the Company consistent with past practices)assign any material rights or claims;
(e) neither the Company it nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof Tax election or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration usual course of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithbusiness;
(lf) except as set forth in Section 5.01(lmake any change, other than required by GAAP, to its accounting principles or procedures; and
(g) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor will authorize or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other an agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Sohu Com Inc)
Interim Operations. Except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, which consent, solely, with respect to clauses (e)(iv), (l), (m), (u) or, with respect to the foregoing, clause (z) below, shall not be unreasonably withheld) the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, conducted only in the ordinary and usual course of business and the Company and its Subsidiaries subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees organizations and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve substantially intact the goodwill of their respective businessesthose having business relationships with it;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiariessubsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, including without limitation, limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of prior to the date hereof; hereof or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiariessubsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiariessubsidiaries, (ii) amend or otherwise change its certificate articles of incorporation or bylaws or permit any of its Subsidiaries subsidiaries to amend its articles of incorporation, bylaws or bylaws equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries subsidiaries to the Company or with respect to other wholly owned Subsidiaries of the Company consistent with past practicescapital stock);
(e) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries subsidiaries shall (i) grant or agree to any increase in any manner the compensation or fringe benefits of of, or pay any bonus to, any current or former director, officer or employee, employee except increases in the ordinary course of business consistent with past practice, for increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection periodic increases consistent with accelerating the vesting schedules past practice for employees other than officers and directors of the Options and terminating the Options and the Stock PlansCompany, (ii) subject to the covenants set forth in clause (i) of this Section 5.01(e), enter into any new or materially amend any existing Contractemployment, transaction, commitment severance or arrangement termination agreement with any current or former director, officer, officer or employee or affiliate of the Company or any of its SubsidiariesCompany, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof)Agreement, become obligated under any Benefit Plan that was not in existence on the date hereof or amend or materially amend, modify or terminate, or pay any benefit that is not required by, terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof, (iv) hire any employee (A) except the replacement of any current employee of the Company or any of its subsidiaries whose employment with the Company or any of its subsidiaries is terminated for any reason (with such replacement employee receiving substantially similar compensation and benefits as such terminated employee) or (B) new employees having anticipated annual compensation (including bonuses) not exceeding $100,000 individually or $500,000 in the aggregate, or (v) except as may be required to comply with applicable law and except as provided in this Agreement, pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement);
(f) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing all or substantially all the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof thereof, other than acquisitions purchases of inventory or purchases made supplies in the ordinary course of business consistent with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionspast practice;
(g) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets other than (xi) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets) and (iii) inventory in the ordinary course of business consistent with past practice;
(h) the Company shall not, and shall not permit any of its subsidiaries to, incur, assume, be responsible for assume or pre-pay any Indebtedness, indebtedness for borrowed money or enter into any agreement to, to incur, assume, be responsible for assume or pre-pay any Indebtednessindebtedness for borrowed money, or guarantee, or agree to guarantee, any such Indebtedness indebtedness or Liabilities or obligations obligation of another person, or issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiariessubsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; , other than the incurrence of indebtedness under the Company’s existing revolving credit facility up to the limits of such facility as of the date hereof.
(i) the Company shall not, and shall not permit any of its subsidiaries to, make or (y) sellforgive any loans, leaseadvances or capital contributions to, license or subject to any Lien or otherwise dispose guarantees for the benefit of, or agree to sell, lease or subject to any Lien or otherwise dispose ofinvestments in, any of its properties person or assets in excess of $25,000 individually or $50,000 in the aggregate entity (other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by loans between or among the Company and any of its wholly-owned subsidiaries and except for cash advances to employees for reimbursable travel and other reasonable business expenses in the Company’s Subsidiariesordinary course of business);
(hj) the Company shall not, and shall not permit any of its subsidiaries to, assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except for the obligations of the subsidiaries of the Company permitted under this Agreement;
(k) neither the Company nor any of its Subsidiaries subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as Agreement or set forth in Section 5.01(i5.01(k) of the Company Disclosure Schedule, );
(l) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, (i) enter into, or materially amend, modify or supplement any Material Contract or License Agreement outside of the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), hereunder or as set forth in Section 5.01(l) of the Company Disclosure Schedule) or (ii) waive, release, grant, assign, modify assign or transfer any of its material rights or claims (whether such rights or claims arise under a Contract Material Contract, License Agreement or otherwise);
(jm) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j5.01(m) of the Company Disclosure Schedule by categorySchedule) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 750,000 in the aggregateaggregate for the Company and its subsidiaries taken as a whole;
(kn) the Company shall, and its subsidiaries shall cause comply in all material respects with their obligations under the Material Contracts and License Agreements as such obligations become due;
(o) the Company and its Subsidiaries to, subsidiaries (i) shall continue in force with its existing or other reputable insurance with good and responsible companies, adequate insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s past practices and its Subsidiaries’ past practices, (ii) use reasonable best efforts shall not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated;
(p) the Company shall not, and shall not permit any of its subsidiaries to, enter into, amend, modify or supplement any material agreement, transaction, commitment or arrangement with any current or former officer, director, employee or other affiliate of the Company or any of its subsidiaries (or any affiliate of any of the foregoing) other than agreements, transactions, commitments and arrangements (i) permitted by Section 5.01(e) hereof or (ii) as otherwise expressly contemplated by this Agreement;
(q) the Company shall not, and shall not permit any of its subsidiaries to, establish or acquire (i) any subsidiary other than wholly-owned subsidiaries or (ii) subsidiaries organized outside of the United States and its territorial possessions;
(r) the Company shall not, and shall not permit any of its subsidiaries to, amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except as required by this Agreement;
(s) the Company shall, and shall cause its subsidiaries to, (iiii) maintain all Leased Real Property any real property to which the Company and any of its subsidiaries have ownership or a leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respectscondition, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Lienscondemnation, subject to the expiration of real property leases in accordance with their terms, and (ivii) pay, prior to the imposition of any Lien or timely pay all material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them and (iii) timely comply in good faithall material respects with the terms and provisions of all leases, contracts and agreements relating to such real property and the use and operation thereof;
(lt) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreementunion, memorandum or understanding, grievance settlement or commitment, except, in each case, except as required by LawLaw or as set forth in Section 5.01(t) of the Company Disclosure Schedule;
(mu) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, settle or compromise any pending or threatened suit, action, claim or litigation (except in the ordinary course of business and with prior written notice to Parent);
(v) the Company shall not, and shall not permit any of its subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of and its Subsidiaries subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law law or in GAAPUnited States generally accepted accounting principles;
(nw) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate revalue in any material respect at, or as of any time prior to, the Effective Time or result in any of its assets, including, without limitation, writing down the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate value of inventory in any material respect at manner or the write-off of notes or accounts receivable in any such time or to prevent any such condition from not being satisfiedmaterial manner;
(ox) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, make or change any material tax election election, make or change an annual any method of accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, Return or settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiariesmaterial tax liability;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(qy) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; and
(z) the Company shall not, and shall not permit any of its subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless the Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(a) the The business and operations of the Company and its Subsidiaries shall be conductedmanaged by the Manager pursuant to the Management Agreement, and the books and records of the Company and its Subsidiaries shall otherwise be maintained, only conducted in the ordinary and usual course of business and consistent with past practices and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the The Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver otherwise dispose of or subject to Lien (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of other than Permitted Liens) any of its Subsidiaries, any other securities ' Capital Stock owned by it; (ii) amend its charter or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests)bylaws, except for issuances of Common Shares upon any amendment which will not hinder, delay or make the exercise of Options outstanding as of Merger more costly to the date hereofParent; (iiiii) split, combine or reclassify its outstanding shares of Capital Stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any Capital Stock; (v) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its Capital Stock or any securities convertible into or exchangeable or exercisable for any shares of its Capital Stock; or (includingvi) adopt a plan of complete or partial liquidation or dissolution, without limitationmerger or otherwise restructure or recapitalize or consolidate with any Person other than the Purchaser or another wholly-owned Subsidiary of the Parent;
(c) neither it nor any of its Subsidiaries shall (i) authorize for issuance or issue, sell or otherwise dispose of or subject to any Lien (other than Permitted Liens) any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit Capital Stock of any of its Subsidiaries class or any Voting Debt (other than Shares issuable pursuant to split, combine or reclassify any shares of its capital stock;
the Company Options outstanding on the date hereof); (dii) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary and usual course of business consistent with past practicepractices, increases and bonuses expressly required under existing employment agreementstransfer, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Planslease, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtednesslicense, guarantee, sell or agree to guarantee, any such Indebtedness or Liabilities or obligations otherwise dispose of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to (other than Permitted Liens) any Lien or otherwise dispose of, any of its properties other property or assets in excess of $25,000 individually or $50,000 in the aggregate incur or modify any material indebtedness or other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), liability; (iii) Permitted Liensassume, (iv) Liens relating to Taxes that are not yet due and payable guarantee, endorse or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and become liable or responsible (vwhether directly, contingently or otherwise) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer of any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures Person except in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) and except for obligations of Subsidiaries of the Company Disclosure Schedule by categoryincurred in the ordinary course of business; (iv) or make any commitments with respect loans to capital expenditures or any other planned capital expenditures Person (other than to Subsidiaries of the Company or, customary loans or advances to non-officer employees in connection with business-related travel in the ordinary course of business consistent with past practices practices); or (v) make any commitments for, make or authorize any capital expenditures other than in excess of amounts less than $500,000 5,000 individually and $25,000 in the aggregateaggregate or, by any means, make any acquisition of, or investment in, assets or stock of any other Person;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(ld) except as set forth in Section 5.01(l) of the Company Disclosure Schedulemay be required to comply with applicable law or by existing contractual commitments, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, shall (i) materially amend enter into any currently existing labor new agreements or collective bargaining agreementcommitments for any severance or termination pay to, memorandum or understandingenter into any employment or severance agreement with, grievance settlement any of its directors, officers or any other agreement employees or commitment to or relating to any labor unionconsultants, or (ii) terminate, establish, adopt, enter into into, make any labor new grants or collective bargaining agreementawards under, memorandum amend or understandingotherwise modify, grievance settlement any Compensation and Benefit Plan or increase or accelerate the salary, wage, bonus or other compensation of any employees or directors or consultants or pay or agree to pay any pension, retirement allowance or other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as employee benefit not required by Lawany existing Compensation and Benefit Plan;
(me) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereofshall, except as may be required as a result of a change in applicable Law law or in GAAP, change any of the accounting principles or practices used by it;
(nf) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate shall revalue in any material respect at, or as of any time prior to, the Effective Time or result in any of its material assets, including writing down the conditions set forth in Article 6 not being satisfied, value of inventory or omit, writing-off notes or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfiedaccounts receivable;
(og) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, shall settle or compromise any Tax claim, assessment material claims or liability relating to the Company litigation or terminate or materially amend or modify any of its Subsidiariesmaterial Contracts or waive, release or surrender assign any right to claim a refund of Taxes, except as set forth in Section 5.01(omaterial rights or claims;
(h) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or neither it nor any of its Subsidiaries, Subsidiaries shall make any Tax election or permit any insurance policy naming it as a beneficiary or loss- payable payee to be canceled or terminated;
(i) neither it nor any of its Subsidiaries shall take any other similar action, action or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission that would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or cause any of its Subsidiaries;representations and warranties herein to become untrue in any material respect; and
(pj) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or neither it nor any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment will authorize or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, into any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in (a) Subject to Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent6.1.A., the Company covenants and agrees as to itself and its Subsidiaries that during after the period from the date of this Agreement Second Amendment Date and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective best reasonable best efforts to (A) preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other business associates and (B) maintain and keep material third parties having business dealings with them properties and assets in as good repair and condition as such are in as of the date hereof, subject to preserve the goodwill of their respective businessesordinary wear and tear;
(bii) the Company shall notnot (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its articles of incorporation or by-laws or amend, modify or terminate the Rights Agreement; (C) split, combine, subdivide or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock (other than dividends from its direct or indirect wholly owned Subsidiaries and shall other than regular quarterly cash dividends not in excess of $0.255 per Share and regular quarterly cash dividends on the preferred and preference stock of its Subsidiaries); or (E) repurchase, redeem or otherwise acquire (except for (I) mandatory sinking funds obligations existing on the date hereof and (II) open market repurchases pursuant to the terms of the Company's Direct Stock Purchase Plan and Dividend Reinvestment Plan), or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of stock;
(iii) neither the Company or nor any of its Subsidiaries shall (includingA) issue, without limitationsell, 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 equity interests property or assets (other than (I) Shares issuable pursuant to options and other rights outstanding on the date hereof under the Stock Plans, issuances of additional options or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans and issuances of Shares pursuant to options granted after the date hereof pursuant to the Stock Plans and (II) Shares issuable pursuant to the terms of the outstanding Feline Prides); (B) (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any of its coal fines property or assets, or, (II) except as identified on Section 6.1(a)(iii) of the Company Disclosure Letter, other than in the ordinary and usual course of business and other than sales not in excess of $10,000,000 in the aggregate or $1,000,000 in respect of any transaction or series of its Subsidiaries)related transactions, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets; (C) make or authorize or commit for any capital expenditures or operation and maintenance expenditures in excess of 100% of those contemplated to be spent pursuant to the year 1999, 2000 or 2001 capital appropriations/spending budgets set forth in Section 6.1(a) of the Company Disclosure Letter; or (iiiD) amendby any means, modify make any acquisition of, or waive investment in, assets or stock of, or other interest in, any term other Person or entity in excess of $10,000,000 in the aggregate or $3,000,000 in respect of any outstanding security transaction or series of the Company or any of its Subsidiaries, related transactions;
(iv) except (A) as required by this Agreement, (B) as set forth in Section 5.01(b6.1(a)(iv) of the Company Disclosure ScheduleLetter, neither the Company nor any of its Subsidiaries shall (A) accelerate or delay collection of notes or accounts receivable in connection advance of or beyond their regular due dates or the dates consistent with accelerating the vesting schedules of the Options past practice or (B) change any significant accounting principle, practice or method, except to the extent required by U.S. GAAP as advised by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection Company's regular independent accountants and after consultation with terminating the Options and the Stock PlansParent;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(ev) neither the Company nor any of its Subsidiaries shall (i) grant take or agree fail to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, to make any representation or warranty of the Company contained in this Agreement herein inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfiedTime, or omitthat is, individually or agree in the aggregate, reasonably likely to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfiedhave a Material Adverse Effect;
(ovi) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth required by applicable Law, an existing collective bargaining agreement or other Contract identified in Section 5.01(o6.1(a)(vi) of the Company Disclosure ScheduleLetter, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to neither the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or nor any of its Subsidiaries thanshall terminate, the terms of such Contract prior to the making of such amendment or modificationestablish, and (iii) not, and shall cause its Subsidiaries not toadopt, enter into, make any new grants or materially amendawards under, modify amend or supplementotherwise modify, any Lease Compensation and Benefit Plans (other than issuances of additional options, performance shares or other Material Contract under which rights to acquire Shares granted pursuant to the costs or obligations terms of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements Stock Plans as in effect on the date hereof in the aggregate; and
(q) ordinary and usual course of the Company shall notoperation of such Stock Plans, and provided, that any such additional options, performance shares or rights to acquire Shares shall not permit any of its Subsidiaries to, agree or commit to do any of vest in connection with the foregoing.Merger and the other transactions contemplated by this Agreement),
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless Keystone shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement, the Stock Option Agreement, the Company Disclosure Letter or as required by applicable Law):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially all reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) the Company shall not, and it shall not (A) amend its certificate of incorporation or by-laws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (D) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the any securities convertible into or exchangeable or exercisable for any shares of its capital stock of stock;
(iii) neither it nor any of its SubsidiariesSubsidiaries shall knowingly take any action that would prevent the merger from qualifying as a tax-free "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties herein to become untrue in any material respect;
(iv) 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 Compensation and Benefit Plans or Stock Plans or increase the salary, wage, bonus or other securities compensation of any directors, officers or employees or take any action which would result in an acceleration of benefits or vesting under the Stock Plans as a result of the consummation of the Merger which would not otherwise occur pursuant to the terms and conditions of such benefits or Stock Plan grants, awards or options as in effect on the date hereof;
(v) neither it nor any of its Subsidiaries shall issue any preferred stock or incur any indebtedness for borrowed money (other than indebtedness in the ordinary course of business consistent with past practice, indebtedness incurred solely for the purpose of funding the Escrow Account or the replacement or refinancing of existing short-term indebtedness); or guarantee any such indebtedness;
(vi) neither it nor any of its Subsidiaries shall make any capital expenditures in an aggregate amount in excess of the aggregate amount reflected in the Company's capital expenditure budget heretofore delivered to Keystone;
(vii) except as contemplated by Section 6.1(a)(iv), neither the Company nor any of its Subsidiaries shall issue, deliver, sell, or encumber shares of any class of its common stock or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such sharesshares except the option granted under the Stock Option Agreement, securities options and performance share programs outstanding on the date hereof under the Stock Plans, and shares issuable pursuant to such options and performance share programs;
(viii) neither it nor any of its Subsidiaries shall acquire any business, whether by merger, consolidation, purchase of property or convertible securities assets or otherwise;
(ix) neither it nor any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon its Subsidiaries shall agree prior to the exercise of Options outstanding as Effective Time to do any of the foregoing after the Effective Time.
(b) Keystone covenants and agrees as to itself and its Subsidiaries that, after the date hereofhereof and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or in the Keystone Disclosure Letter or as required by applicable Law):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) amend its certificate of incorporation or by-laws in any manner that would prohibit or hinder, impede or delay in any material respect the Merger or the consummation of the transactions contemplated hereby; (iiB) declare, set aside or pay any dividend or other distribution payable in cash or property in respect of any capital stock; or (C) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporationpurchase or otherwise acquire, except in open market transactions or bylaws or (iii) splitin connection with the Keystone Stock Plans, combine or reclassify any shares of its capital stock, and shall not permit stock or any of its Subsidiaries to split, combine securities convertible into or reclassify exchangeable for any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(eiii) neither the Company it nor any of its Subsidiaries shall (i) grant or agree to knowingly take any increase in any manner action that would prevent the compensation or benefits Merger from qualifying as a tax-free "reorganization" within the meaning of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e368(a) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new Code or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or that would cause any of its Subsidiariesrepresentations and warranties herein to become untrue in any material respect, or (iii) except as set forth in Section 5.01(e) provided, however, that nothing contained herein shall limit the ability of Keystone to exercise its rights under the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;Stock Option Agreement; and
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company it nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, will authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other an agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(c) Keystone and the Company agree that any written approval obtained under this Section 6.1 may be relied upon by the other party if signed by the Chief Executive Officer or the Chief Financial Officer of the other party.
Appears in 1 contract
Sources: Merger Agreement (Keystone Automotive Industries Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees as to itself and its Subsidiaries that during the period from after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective best reasonable best efforts to (A) preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other business associates and (B) maintain and keep material third parties having business dealings with them properties and assets in as good repair and condition as such are in as of the date hereof, subject to preserve the goodwill of their respective businessesordinary wear and tear;
(bii) the Company shall notnot (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its articles of incorporation or by-laws or amend, modify or terminate the Rights Agreement; (C) split, combine, subdivide or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock (other than dividends from its direct or indirect wholly owned Subsidiaries and shall other than regular quarterly cash dividends not in excess of $0.255 per Share and regular quarterly cash dividends on the preferred and preference stock of its Subsidiaries); or (E) repurchase, redeem or otherwise acquire (except for (I) mandatory sinking funds obligations existing on the date hereof and (II) open market repurchases pursuant to the terms of the Company's Direct Stock Purchase Plan and Dividend Reinvestment Plan), or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of stock;
(iii) neither the Company or nor any of its Subsidiaries shall (includingA) issue, without limitationsell, 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 equity interests property or assets (other than (I) Shares issuable pursuant to options and other rights outstanding on the date hereof under the Stock Plans, issuances of additional options or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans and issuances of Shares pursuant to options granted after the date hereof pursuant to the Stock Plans and (II) Shares issuable pursuant to the terms of the outstanding Feline Prides); (B) (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any of its coal fines property or assets, or, (II) except as identified on Section 6.1(a)(iii) of the Company Disclosure Letter, other than in the ordinary and usual course of business and other than sales not in excess of $100,000,000 in the aggregate or $30,000,000 in respect of any transaction or series of its Subsidiaries)related transactions, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets; (C) make or authorize or commit for any capital expenditures or operation and maintenance expenditures in excess of 110% of those contemplated to be spent pursuant to the year 1999, 2000 or 2001 capital appropriations/spending budgets set forth in Section 6.1(a) of the Company Disclosure Letter; or (iiiD) amendby any means, modify make any acquisition of, or waive investment in, assets or stock of, or other interest in, any term other Person or entity in excess of $100,000,000 in the aggregate or $30,000,000 in respect of any outstanding security transaction or series of the Company or any of its Subsidiaries, related transactions;
(iv) except (A) as required by this Agreement, (B) as set forth in Section 5.01(b6.1(a)(iv) of the Company Disclosure ScheduleLetter, neither the Company nor any of its Subsidiaries shall (A) incur, assume or prepay any long-term debt or incur or assume any short-term debt other than in the ordinary and usual course of business in amounts and for purposes consistent with past practice under existing lines of credit, and except for the incurrence of long-term indebtedness in connection with accelerating the vesting schedules refinancing of existing indebtedness either at its stated maturity or at a lower cost of funds, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Options obligations of any third-party, including by means of any "keep well" or other agreement to support or maintain any financial statement condition of another person, except in the ordinary and usual course of business, (C) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates consistent with past practice, or (D) change any accounting principle, practice or method in a manner that is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock PlansCompany's regular independent accountants;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(ev) neither the Company nor any of its Subsidiaries shall (i) grant take or agree fail to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, to make any representation or warranty of the Company contained in this Agreement herein inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfiedTime, or omitthat is, individually or agree in the aggregate, reasonably likely to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfiedhave a Material Adverse Effect;
(ovi) except as required by applicable Law, an existing collective bargaining agreement or other Contract identified in Section 6.1(a)(vi) of the Company shall notDisclosure Letter, and shall not permit neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans (other than issuances of additional options, performance shares or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans, provided, that any such additional options, performance shares or rights to acquire Shares shall not vest in connection with the Merger and the other transactions contemplated by this Agreement), or except as required by any existing contract with a non-officer employer increase the salary, wage, bonus or other compensation of any 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);
(vii) except as required by applicable law, an existing collective bargaining agreement or other Contract identified in Section 6.1(a)(vii) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries shall grant any severance or termination pay to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreementemployment or severance agreement with any director or officer of it or such Subsidiaries, settle or compromise any Tax claimprovided, assessment or liability relating to that the foregoing shall not require the Company or to violate any of its Subsidiaries, or surrender any right obligations existing prior to claim a refund of Taxes, except the date hereof as set forth in Section 5.01(o5.1(h) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its SubsidiariesLetter;
(pviii) neither the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or nor any of its Subsidiaries thanshall settle or compromise any material claims or litigation or amend or terminate any of its material Contracts or waive, the terms of such Contract prior to the making of such amendment release or modification, and assign any material rights or claims;
(iiiix) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of neither the Company or nor any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements shall make any material Tax election (other than in the aggregateordinary and usual course or as is required by Law) or 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; and
(qx) neither the Company shall not, and shall not permit nor any of its Subsidiaries to, agree will authorize or commit enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement):
(i) the business of Parent and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective best reasonable efforts to (A) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates and (B) maintain and keep material properties and assets in as good repair and condition as such are in as of the date hereof, subject to ordinary wear and tear;
(ii) it shall not (A) amend its articles of incorporation or by-laws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable, in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly owned Subsidiaries and other than regularly quarterly cash dividends not in excess of $0.515 per share of Parent Common Stock and regularly quarterly cash dividends on the preferred and preference stock of its Subsidiaries; (D) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of Parent Common Stock or any securities convertible into or exchangeable or exercisable for any shares of Parent Common Stock (other than repurchases, redemptions or other acquisitions which are made at the then-prevailing market price of Parent Common Stock on the NYSE and which in the aggregate do not exceed ten percent of the shares of Parent Common Stock outstanding as of the date hereof) or (E) except as permitted under this Agreement, enter into any agreement with respect to a merger, reorganization, share exchange, consolidation or similar transaction involving, or any purchase of all or substantially all of the equity securities of it or any of its Significant Subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X under the Exchange Act);
(iii) neither Parent nor any of its Subsidiaries shall, (A) 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 Parent Common Stock (other than (I) shares of Parent Common Stock issuable pursuant to options outstanding on the date hereof under the Parent Stock Plan, issuances of additional options or rights to acquire shares of Parent Common Stock granted pursuant to the terms of the Parent Stock Plan as in effect on the date hereof in the ordinary and usual course of the operation of such Parent Stock Plan and issuances of shares of Parent Common Stock pursuant to options granted after the date hereof pursuant to the Parent Stock Plan and (II) issuances of Parent Common Stock, or securities convertible with or -42- 49 exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, shares of Parent Common Stock, to a third-party on arms-length terms not in excess of 20% of the number of shares of Parent Common Stock outstanding as of the date hereof), (B) other than pursuant to the year 1999, 2000 or 2001 capital appropriations/ spending budgets set forth in Section 6.1(b) of the Parent Disclosure Letter and other than in the ordinary and usual course of business (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any property or assets, and other than sales not in excess of $250,000,000 in the aggregate; or (II) by any means, make any acquisition of, or investment in, assets or stock of, or other interest in, any other Person or entity in excess of $250,000,000 in the aggregate or (C) acquire "Beneficial Ownership" (as such term is defined in the Rights Agreement) of any Shares;
(iv) Parent shall not change any material accounting principle, practice or method in a manner that is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by Parent's regular independent accountants;
(v) neither Parent nor any of its Subsidiaries shall take or fail to take any action that is reasonably likely to make any representation or warranty of such party contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that is, individually or in the aggregate, reasonably likely to have a Material Adverse Effect; and
(vi) neither Parent nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Dte Energy Co)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees as to itself and its Subsidiaries that during the period from after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective best reasonable best efforts to (A) preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other business associates and (B) maintain and keep material third parties having business dealings with them properties and assets in as good repair and condition as such are in as of the date hereof, subject to preserve the goodwill of their respective businessesordinary wear and tear;
(bii) the Company shall notnot (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its articles of incorporation or by-laws or amend, modify or terminate the Rights Agreement; (C) split, combine, subdivide or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock (other than dividends from its direct or indirect wholly owned Subsidiaries and shall other than regular quarterly cash dividends not in excess of $0.255 per Share and regular quarterly cash dividends on the preferred and preference stock of its Subsidiaries); or (E) repurchase, redeem or otherwise acquire (except for (I) mandatory sinking funds obligations existing on the date hereof and (II) open market repurchases pursuant to the terms of the Company's Direct Stock Purchase Plan and Dividend Reinvestment Plan), or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of stock;
(iii) neither the Company or nor any of its Subsidiaries shall (includingA) issue, without limitationsell, 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 equity interests property or assets (other than (I) Shares issuable pursuant to options and other rights outstanding on the date hereof under the Stock Plans, issuances of additional options or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans and issuances of Shares pursuant to options granted after the date hereof pursuant to the Stock Plans and (II) Shares issuable pursuant to the terms of the outstanding Feline Prides); (B) (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any of its coal fines property or assets, or, (II) except as identified on Section 6.1(a)(iii) of the Company Disclosure Letter, other than in the ordinary and usual course of business and other than sales not in excess of $100,000,000 in the aggregate or $30,000,000 in respect of any transaction or series of its Subsidiaries)related transactions, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets; (C) make or authorize or commit for any capital expenditures or operation and maintenance expenditures in excess of 110% of those contemplated to be spent pursuant to the year 1999, 2000 or 2001 capital appropriations/spending budgets set forth in Section 6.1(a) of the Company Disclosure Letter; or (iiiD) amendby any means, modify make any acquisition of, or waive investment in, assets or stock of, or other interest in, any term other Person or entity in excess of $100,000,000 in the aggregate or $30,000,000 in respect of any outstanding security transaction or series of the Company or any of its Subsidiaries, related transactions;
(iv) except (A) as required by this Agreement, (B) as set forth in Section 5.01(b6.1(a)(iv) of the Company Disclosure ScheduleLetter, neither the Company nor any of its Subsidiaries shall (A) incur, assume or prepay any long-term debt or incur or assume any short-term debt other than in the ordinary and usual course of business in amounts and for purposes consistent with past practice under existing lines of credit, and except for the incurrence of long-term indebtedness in connection with accelerating the vesting schedules refinancing of existing indebtedness either at its stated maturity or at a lower cost of funds, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Options obligations of any third-party, including by means of any "keep well" or other agreement to support or maintain any financial statement condition of another person, except in the ordinary and usual course of business, (C) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates consistent with past practice, or (D) change any accounting principle, practice or method in a manner that is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock PlansCompany's regular independent accountants;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(ev) neither the Company nor any of its Subsidiaries shall (i) grant take or agree fail to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, to make any representation or warranty of the Company contained in this Agreement herein inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfiedTime, or omitthat is, individually or agree in the aggregate, reasonably likely to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfiedhave a Material Adverse Effect;
(ovi) except as required by applicable Law, an existing collective bargaining agreement or other Contract identified in Section 6.1(a)(vi) of the Company shall notDisclosure Letter, and shall not permit neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans (other than issuances of additional options, performance shares or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans, provided, that any such additional options, performance shares or rights to acquire Shares shall not vest in connection with the Merger and the other transactions contemplated by this Agreement), or except as required by any existing contract with a non-officer employer increase the salary, wage, bonus or other compensation of any 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);
(vii) except as required by applicable law, an existing collective bargaining agreement or other Contract identified in Section 6.1(a)(vii) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries shall grant any severance or termination pay to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreementemployment or severance agreement with any director or officer of it or such Subsidiaries, settle or compromise any Tax claimprovided, assessment or liability relating to that the foregoing shall not require the Company or to violate any of its Subsidiaries, or surrender any right obligations existing prior to claim a refund of Taxes, except the date hereof as set forth in Section 5.01(o5.1(h) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its SubsidiariesLetter;
(pviii) neither the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or nor any of its Subsidiaries thanshall settle or compromise any material claims or litigation or amend or terminate any of its material Contracts or waive, the terms of such Contract prior to the making of such amendment release or modification, and assign any material rights or claims;
(iiiix) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of neither the Company or nor any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements shall make any material Tax election (other than in the aggregateordinary and usual course or as is required by Law) or 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; and
(qx) neither the Company shall not, and shall not permit nor any of its Subsidiaries to, agree will authorize or commit enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement):
(i) the business of Parent and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective best reasonable efforts to (A) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates and (B) maintain and keep material properties and assets in as good repair and condition as such are in as of the date hereof, subject to ordinary wear and tear;
(ii) it shall not (A) amend its articles of incorporation or by-laws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable, in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly owned Subsidiaries and other than regularly quarterly cash dividends not in excess of $0.515 per share of Parent Common Stock and regularly quarterly cash dividends on the preferred and preference stock of its Subsidiaries; (D) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of Parent Common Stock or any securities convertible into or exchangeable or exercisable for any shares of Parent Common Stock (other than repurchases, redemptions or other acquisitions which are made at the then-prevailing market price of Parent Common Stock on the NYSE and which in the aggregate do not exceed ten percent of the shares of Parent Common Stock outstanding as of the date hereof) or (E) except as permitted under this Agreement, enter into any agreement with respect to a merger, reorganization, share exchange, consolidation or similar transaction involving, or any purchase of all or substantially all of the equity securities of it or any of its Significant Subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X under the Exchange Act);
(iii) neither Parent nor any of its Subsidiaries shall, (A) 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 Parent Common Stock (other than (I) shares of Parent Common Stock issuable pursuant to options outstanding on the date hereof under the Parent Stock Plan, issuances of additional options or rights to acquire shares of Parent Common Stock granted pursuant to the terms of the Parent Stock Plan as in effect on the date hereof in the ordinary and usual course of the operation of such Parent Stock Plan and issuances of shares of Parent Common Stock pursuant to options granted after the date hereof pursuant to the Parent Stock Plan and (II) issuances of Parent Common Stock, or securities convertible with or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, shares of Parent Common Stock, to a third-party on arms-length terms not in excess of 20% of the number of shares of Parent Common Stock outstanding as of the date hereof), (B) other than pursuant to the year 1999, 2000 or 2001 capital appropriations/ spending budgets set forth in Section 6.1(b) of the Parent Disclosure Letter and other than in the ordinary and usual course of business (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any property or assets, and other than sales not in excess of $250,000,000 in the aggregate; or (II) by any means, make any acquisition of, or investment in, assets or stock of, or other interest in, any other Person or entity in excess of $250,000,000 in the aggregate or (C) acquire "Beneficial Ownership" (as such term is defined in the Rights Agreement) of any Shares;
(iv) Parent shall not change any material accounting principle, practice or method in a manner that is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by Parent's regular independent accountants;
(v) neither Parent nor any of its Subsidiaries shall take or fail to take any action that is reasonably likely to make any representation or warranty of such party contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that is, individually or in the aggregate, reasonably likely to have a Material Adverse Effect; and
(vi) neither Parent nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by ParentIn furtherance of, and without limiting, the Company covenants and agrees that during the period foregoing Section 6.2, from the date of this Agreement to until the Effective Time Time, except (w) as otherwise expressly contemplated by this Agreement, (x) as expressly required by applicable Law, (y) as Parent may approve in writing (which approval shall not be unreasonably withheld, conditioned or until termination delayed) or (z) as set forth in Section 6.3 of this Agreement in accordance the MLP Disclosure Letter, each of the MLP Entities (and with Article 7 hereof):respect to Section 6.3(a) below, GP Holdings) will not and will not permit any of MLP’s Subsidiaries to, and GP Holdings will not permit any MLP Group Entity to, directly or indirectly:
(a) (i) issue (including issuing any certificate in connection therewith), grant, sell or otherwise permit to become outstanding, or authorize the business and operations of creation of, any additional Equity Interests (whether “phantom” or otherwise) or any additional Rights, including transactions between or among the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesMLP Group Entities or (ii) certificate any existing Partnership Interests;
(b) the Company shall not(i) split, and shall not permit combine or reclassify any of its Subsidiaries to, (i) Equity Interests or issue or authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through propose the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities in respect of, in lieu of or any securities convertible or exercisable intoin substitution for its Equity Interests, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporationpurchase, redeem or bylaws otherwise acquire any membership, partnership or other Equity Securities or (iii) split, combine or reclassify enter into any shares Contract with respect to the voting of its capital stock, and shall not permit any of its Subsidiaries to split, combine Partnership Interests or reclassify any shares of its capital stockother Equity Securities;
(dc) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant sell, transfer, lease, or agree to otherwise dispose of, or encumber all or any increase in any manner the compensation portion of its assets, business or benefits of any current or former director, officer or employeeproperties, except increases for (A) sales, transfers and dispositions of obsolete or worthless equipment, (B) sales, transfers and dispositions of inventory and produced hydrocarbons in the ordinary course of business or (C) sales, transfers, assignments, conveyances, abandonment, allowances to lapse, licenses, sublicenses, covenants not to assert or other disposals of Intellectual Property in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into acquire, by merger or otherwise, or lease any new assets or materially amend securities or all or any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate portion of the Company business or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit property of any current or former directorother Person, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, other than (x) enter into any new line acquisitions of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) goods and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets services in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under and (y) acquisitions pursuant to which the Company aggregate value exchanged or purchase price paid or payable by any of its Subsidiaries shall have monetary obligations in excess of MLP Group Entity would not exceed $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 2,000,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.,
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent 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 set forth in Section 5.01 6.1 of the Company Disclosure Schedule or Letter) and except as consented to in writing required by Parentapplicable Law, the Company covenants business of it and agrees that during its Subsidiaries shall be conducted in the period ordinary and usual course consistent with past practice 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, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement to until the Effective Time Time, except (i) as otherwise contemplated by this Agreement, (ii) as Parent may approve in writing (such approval not to be unreasonably withheld or until termination of this Agreement delayed), (iii) as is required by applicable Law or any Governmental Entity or (iv) as set forth in accordance with Article 7 hereof):
(a) the business and operations Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries shall be conductedto:
(A) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(B) merge or consolidate the Company or any of its Subsidiaries with any other Person, and the books and records except for any such transactions among wholly owned Subsidiaries of the Company and its Subsidiaries shall be maintainedCompany, only in or restructure, reorganize or completely or partially liquidate;
(C) acquire assets outside of the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, from any other securities Person with a value or purchase price in the aggregate in excess of $15 million in any securities convertible transaction or exercisable intoseries of related transactions, or any rights, warrants or options other than acquisitions pursuant to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding Contracts in effect as of the date hereof; of this Agreement;
(iiD) repurchaseissue, redeem sell, pledge, dispose of, grant, transfer, encumber, or otherwise acquire authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forother than (1) the issuance of Shares upon the exercise of Company Options or (2) 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, calls, commitments warrants or other rights of any kind to acquire, 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 equity interests of than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $15 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 any of its Subsidiariescapital stock (except for (1) the Company’s regular annual dividend for calendar year 2007, payable in an amount not in excess of $0.35 per Share (the “2007 Regular Dividend”); provided that the record date for the 2007 Regular Dividend shall be no earlier than July 14, 2007, and that the 2007 Regular Dividend shall not be paid if the Effective Time occurs on or prior to such record date, and (iiiii) amenddividends 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;
(G) reclassify, modify split, combine, subdivide or waive redeem, purchase or otherwise acquire, directly or indirectly, any term of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than the acquisition of any outstanding Shares tendered by current or former employees or directors in connection with the exercise of Company Options);
(H) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other 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, except for indebtedness for borrowed money incurred in the ordinary course of business;
(AI) as required by this Agreement, (B) except as set forth in the capital budgets set forth in Section 5.01(b6.1(a)(I) of the Company Disclosure ScheduleLetter, make or authorize any capital expenditure in connection with accelerating excess of $15 million in the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansaggregate;
(cJ) 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 or as required to address Option Accounting Issues;
(K) settle any litigation or other proceedings before a Governmental Entity or otherwise for an amount in excess of $10 million or any obligation or liability of the Company shall not in excess of such amount;
(iL) make or change any material Tax election or tax accounting method, or settle or compromise any material Tax liability other than in the ordinary course of business consistent with past practice;
(M) transfer, sell, transfer or lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or agree to sellotherwise dispose of any assets, transfer product lines or pledgebusinesses of the Company or its Subsidiaries, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of in each case which are material to the Company and its Subsidiaries taken as a whole, other than inventory, supplies and other assets in the ordinary course of business and other than pursuant to amend its articles Contracts in effect prior to the date of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockthis Agreement;
(dN) other than quarterly dividends not except as expressly contemplated by this Agreement, required pursuant to Benefit Plans in excess effect prior to the date of $0.075 per Common Share declared this Agreement and paid consistent with past practices, listed on the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property)Company’s Disclosure Letter, or make any other distributions in respect ofas otherwise required by applicable Law, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i1) grant or agree to provide any increase in any manner the compensation severance or termination payments or benefits of to any current or former director, officer Elected Officer or employeeemployee of the Company or any of its Subsidiaries, except increases except, in the case of employees who are not Elected Officers, in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements(2) increase the compensation, bonus plans and other agreements and arrangements listed perquisites or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with benefits payable to any current or former director, officer, Elected Officer or employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth except, in Section 5.01(e) the case of employees who are not Elected Officers of the Company Disclosure ScheduleCompany, as increases in base salary in the ordinary course of business consistent with past practice, (3) grant any equity or equity-based awards that may be required to comply with applicable Law and as provided or otherwise contemplated settled in this Agreement (includingShares, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan preferred shares or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its SubsidiariesSubsidiaries or the value of which is linked directly or indirectly, guarantee in whole or in part, to the price or value of any debt securities of othersShares, enter into any “keep well” preferred shares or other agreement to maintain any financial statement condition of another person Company securities or enter into any arrangement having Subsidiary securities, (4) accelerate the economic effect vesting or payment of any of compensation payable or benefits provided or to become payable or provided to any current or former director, Elected Officer or employee; provided that notwithstanding the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall notbe permitted, at any time prior to the Effective Time, to pay any annual or quarterly bonus earned and shall not permit determined in the ordinary course earlier than it would otherwise have been paid in order to pay such amount in the calendar year prior to the calendar year in which it would otherwise have been paid, regardless of when such bonus payments have historically been paid or (5) terminate or materially amend any of its Subsidiaries to, (i) enter intoexisting, or materially amendadopt any new, modify or supplement any Contract outside Benefit Plan (other than changes made in the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)applicable Laws, or (ii) waive, release, grant, assign, modify or transfer in either case that do not materially increase the costs of any of its material rights or claims (whether such rights or claims arise under a Contract or otherwiseBenefit Plans);
(jO) the Company shall notenter into, and shall not permit amend or extend any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof material collective bargaining agreement or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregatelabor agreement;
(kP) except to the extent necessary to take any actions that the Company shall, and shall cause its Subsidiaries to, is otherwise permitted to take pursuant to Section 6.2 (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases case only in accordance with their termsthe terms of Section 6.2), and (iv) paytake any action to render inapplicable, prior or to exempt any third party from, any standstill arrangements or the imposition provisions of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithTakeover Statutes;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (iiQ) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not tointo, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations agreement of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements type described in the aggregateSection 5.1(r); andor
(qR) the Company shall notexcept as provided in Section 6.2 and Section 8.3(a), and shall not permit any of its Subsidiaries toagree, agree authorize or commit to do any of the foregoing.
(b) Notwithstanding anything to the contrary in the foregoing, the parties shall work together in good faith to agree upon actions intended to ameliorate, to the extent reasonably practicable, any adverse tax impact imposed under Section 409A of the Code to employees arising out of or related to Option Accounting Issues.
(c) The Company shall consult with Parent reasonably in advance of any decision to (i) hire any “Executive Officer” (as such term is defined in Rule 3b-7 promulgated under the Exchange Act), promote any existing Executive Officer to a more senior position or 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 three-year operating plan, as previously provided to Parent; and in each case shall consider in good faith the reasonable recommendations of Parent in connection therewith.
(d) The Company will use its reasonable best efforts to conclude its internal investigation regarding the Company’s practices with respect to the issuance of stock options and to complete, if required, any restatement of the Company’s financial statements, in each case as promptly as reasonably practicable after the date hereof, and shall keep Parent informed, on a current basis, of the status with respect thereto and with respect to any other investigation or litigation relating directly to Option Accounting Issues.
(e) 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 respect to any criminal or regulatory investigation or action involving the Company or any of its Subsidiaries.
Appears in 1 contract
Sources: Merger Agreement (Biomet Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time date on which Purchaser's nominees comprise a majority of the Board of Directors of the Company (or until termination of unless Praxair shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially its reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing rela- tions and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;associates; 27
(bii) it shall not (A) sell or pledge any capital stock owned by it in any of its Subsidiaries; (B) amend the Company shall notCharter or its by-laws or amend, modify or terminate the Rights Agreement; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any Shares or Preferred Shares other than regular quarterly or semi- annual cash dividends not in excess of $0.12 per Share and shall not regular quarterly or semi-annual cash dividends on the Preferred Shares; or (E) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests except in connection with the ordinary course of operations of the Company or CBI Salaried Employee Stock Ownership Plan (1987);
(iii) neither it nor any of its Subsidiaries shall except as disclosed in Section 7.1(a) of the Company Disclosure Letter (includingA) issue, without limitationsell, pledge, dispose of or encumber, or authorize or propose the issuance, sale, pledge, disposition or encumbrance of, any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets (other than Shares issuable pursuant to options outstanding on the date hereof under the Stock Plan or upon conversion of Convertible Preferred Shares; (B) other than in the Company ordinary and usual course of busi- ness, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of any other property or assets or encumber any property or assets (including capital stock of any of its Subsidiaries)) or incur or modify any material indebtedness or other liability; or (iiiC) amendmake any commitments for, modify make or waive authorize any term of any outstanding security of the Company or any of its Subsidiariescapital expenditures other than existing capital expenditures required to be made pursuant to existing capital projects, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b7.1(a)(iii) of the Company Disclosure ScheduleLetter, in connection with accelerating the vesting schedules which have been previously authorized or, by any means, make any acquisition of, or investment in, assets or stock of the Options to the extent required by the Stock Plans any other Person or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansentity;
(civ) the Company shall not (iexcept as disclosed in Section 7.1(a) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) Disclosure Letter, neither the Company it nor any of its Subsidiaries shall (i) grant terminate, establish, adopt, enter into, make any new grants or agree to awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase in any manner the salary, wage, bonus or other compensation or benefits of any current or former director, officer or employee, except employees other than increases in compensation in the ordinary course 28 of business business, in each case, consistent with past practice, increases practices with regard to frequency and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofamount;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company it nor any of its Subsidiaries shall adopt settle or put into effect a plan compromise any material claims or litigation or, except in the ordinary and usual course of complete business modify, amend or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or terminate any of its Subsidiaries (other than material Contracts or waive, release or assign any transaction specifically contemplated by this Agreement)material rights or claims;
(ivi) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or neither it nor any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof Tax election or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration usual course of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;business; and
(lvii) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor will authorize or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other an agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company Meritus covenants and agrees that during the period from as to itself and each of its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (or until termination of unless agreed to in this Agreement or as DSI may otherwise approve in accordance with Article 7 hereofadvance and in writing):
(a) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable best efforts to preserve all business organization intact their current business organizations, keep available the services of their current officers and employees maintain all existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseesmarketing representatives, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it or any of its Subsidiaries in any of its Subsidiaries or other Affiliates; (ii) amend its certificate or articles of incorporation or by-laws; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) repurchase, redeem or otherwise acquire, except in connection with the Company shall notpayment of the exercise price of any option outstanding on the date hereof, and shall not or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(c) neither it nor any of its Subsidiaries shall (includingi) issue, without limitationsell, 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 or other equity interests of the Company any class or any other property or assets; (ii) purchase, transfer, lease, sell, mortgage, pledge, dispose of its Subsidiaries)or encumber any real property, or effect any improvements or expansions thereon; or (iii) amendother than the sale of inventory in the ordinary and usual course of business, modify or waive any term of any outstanding security of the Company or any of its Subsidiariespurchase, except (A) as required by this Agreementtransfer, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedulelease, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) license, guarantee, sell, transfer or mortgage, pledge, dispose of or agree to sell, transfer encumber any property or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership assets (including capital stock of any of its Subsidiaries) or incur or modify any indebtedness or other liability; (iv) make or authorize or commit for any capital expenditures other than in the ordinary and usual course of business (as approved in advance by an authorized representative of DSI); or (v) by any means, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit make any of its Subsidiaries to amend its articles of incorporationacquisition of, or bylaws investment in any business, through acquisition of assets or (iii) split, combine stock of any other Person or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockentity;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall notexcept as may be required by applicable law, and shall not permit except as provided in Section 6.9 below, neither it nor any of its Subsidiaries toshall terminate, declareestablish, set aside adopt, enter into, make any new grants or pay awards under, amend or otherwise modify, any dividends on (whether in cashCompensation and Benefit Plans or increase the salary, stock wage, bonus, severance, incentive or other property), or make compensation of any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)employees;
(e) neither the Company it nor any of its Subsidiaries shall settle or compromise any claims or litigation or enter into any Debt Contracts or Other Contracts or modify, amend or terminate any of its Debt Contracts or Other Contracts, or waive, release or assign any material rights or claims;
(if) grant neither it nor any of its Subsidiaries shall make any Tax election or agree permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated;
(g) neither it nor any increase in of its Subsidiaries shall take any manner the compensation or benefits of any current or former directoraction, officer or employee, except increases other than reasonable and usual actions in the ordinary and usual course of business consistent with GAAP and with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed with respect to accounting policies or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiariesprocedures;
(h) neither the Company it nor any of its Subsidiaries shall adopt sell, transfer, assign or put into effect a plan of complete abandon any patents or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization trademarks which are owned or other reorganization of the Company controlled directly or indirectly by Meritus or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)Subsidiaries;
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or neither it nor any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), license or (ii) waive, release, grant, assign, modify otherwise encumber any patents or transfer trademarks which are owned or controlled directly or indirectly by Meritus or any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise)Subsidiaries;
(j) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, authorize or shall make any capital expenditures modification to employee or customer incentives or trade policies which would reasonably be expected to cause the Company's distributors or end-user customers to increase purchases above those levels normally required to meet their respective needs or cause an increase or decrease in the Company's inventories or Working Capital;
(other than pursuant k) it and its Subsidiaries shall use their best efforts pay and discharge all debts, charges, taxes, assessments, contributions and governmental charges when and as due;
(l) it and its Subsidiaries shall, at all times, comply in all material respects with all laws, rules, regulations, licenses, permits, approvals and orders of any federal, state or local government authority applicable to commitments them;
(m) neither it not its Subsidiaries shall make any expenditure or incur any obligation, without the prior written consent of DSI, which does not arise directly from the proper business expenses of it or its Subsidiaries;
(n) it shall promptly notify DSI in writing of the details of any loss, damage, investigation, action, suit, proceeding, or claim relating to the business of it or its Subsidiaries or which will or might reasonably be expected to have an economic impact in excess of $10,000.00 on the business, properties, assets, goodwill or condition, financial or otherwise, of Meritus or its Subsidiaries;
(o) it and its Subsidiaries shall keep proper books and records in which true and complete entries shall be made of all dealings or transactions of it and its Subsidiaries and Meritus shall furnish to DSI: (i) within fifteen (15) calendar days after the end of each calendar month, monthly unaudited financial statements (including balance sheets, statements of income and loss and statements of cash flow), with footnote disclosure information reasonably acceptable to DSI, and (ii) prior to the date hereof Effective Time, draft unaudited financial statements for the calender month preceding the Effective Time;
(p) neither it not its Subsidiaries shall enter into any Debt Contracts or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures Other Contracts other than in the ordinary course of business consistent with general past practices in excess of $500,000 in the aggregatepractice;
(kq) the Company shall, it and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, shall obtain DSI's prior to the imposition written approval of any Lien or material penalty and all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor unionbusiness decisions which have, or (ii) enter into any labor or collective bargaining agreementshall in the future have, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any a material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) effect on the Company shall not, and shall not permit any business of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company Meritus or any of its Subsidiaries, or surrender any right to claim a refund and for purposes of Taxes, except this Section 6.1(q) only; "material effect" shall be defined as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the an economic effect of materially increasing the present $20,000.00 or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregatemore; and
(qr) the Company neither it nor its Subsidiaries shall not, and shall not permit authorize or announce an intention to do any of its Subsidiaries tothe actions prohibited in this Section 6.1, agree or commit enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Dsi Toys Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company (a) Yankees covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date hereof and until the earlier of this Agreement to the Effective Time (or until the termination of this Agreement in accordance with Article 7 hereof):its terms, unless Braves shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in Section 4.1(a) of the Yankees Disclosure Letter:
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships consistent with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessespast practice;
(bii) the Company shall not, and (A) it shall not issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) it shall not amend its certificate of incorporation or bylaws; (C) it shall not split, combine or reclassify its outstanding shares of capital stock; (D) 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 the quarterly dividends payable by Yankees (in an amount per share not to exceed its most recent quarterly per share dividend and with the timing of such dividend to be consistent with past practice) or, subject to Section 4.1(a)(viii) of the Yankees Disclosure Letter, dividends payable by its direct or indirect wholly owned Subsidiaries to it or another of its direct or indirectly wholly owned Subsidiaries; and (E) it shall not repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge any interests or otherwise encumber shares of its capital stock, as applicable, or any securities convertible into or exchangeable or exercisable for any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents stock;
(including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (iiiii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or neither it nor any of its Subsidiaries shall (includingA) issue, without limitationsell, pledge, dispose of or encumber (v) any shares of, or (w) securities payable in, convertible into or exchangeable or exercisable for, or (x) options, warrants, calls, commitments or rights of any kind to acquire, capital stock of any class, as appropriate, or (y) any bonds, debentures, notes or other equity interests 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 matter or any other property or assets other than Yankees Shares issuable pursuant to stock-based awards outstanding on or awarded prior to the date hereof under the Yankees Stock Plans; (B) (1) increase the amount of net indebtedness for borrowed money, including any guarantee of such indebtedness, by $100,000,000 in excess of the Company net indebtedness set forth in the Yankees Financial Statement as of December 31, 2012 (it being understood that net indebtedness shall be calculated as the amount of debt less the sum of the amount of cash and marketable securities, in each case, set forth in the Yankees Financial Statements as of December 31, 2012; it being further understood that notwithstanding the amount set forth in such Yankees Financial Statements, the non-U.S. dollar-denominated portion of such calculation shall be determined using the exchange rates in effect as of the date hereof without regard to any subsequent changes in such rates) or (2) incur any additional indebtedness for borrowed money with a tenor of its Subsidiaries)greater than 90 days, including any guarantee of such indebtedness; or (iiiC) amendmake or authorize or commit for any capital expenditures, modify except for in accordance with the 2013 capital expenditure target for Yankees that has been provided to Braves prior to the date of this Agreement or waive such other capital expenditures targets as may be agreed by Yankees and Braves (provided that (1) Yankees shall be permitted to make or authorize or commit for any term of any outstanding security of the Company or any capital expenditures in an amount that is between 75% and 110% of its Subsidiariescapital expenditure target and (2) if the Effective Time shall not have occurred on or prior to December 31, 2013, then, for purposes of this Section 4.1(a)(iii), Yankees’s capital expenditure target will be adjusted upwards to take into account the number of days between December 31, 2013 and the Effective Time and assuming that the 2014 capital expenditure target shall be equal to the 2013 capital expenditure target);
(iv) except (A) as required by this Agreementpursuant to existing written, (B) as binding agreements in effect prior to the date hereof and set forth in Section 5.01(b4.1(a)(iv) of the Company Yankees Disclosure ScheduleLetter, in connection with accelerating the vesting schedules of the Options to the extent or as otherwise required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sellapplicable Law, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company Yankees nor any of its Subsidiaries shall (iA) grant or agree provide any severance or termination payments or benefits to any director, officer or employee of Yankees or any of its Subsidiaries, (B) increase in any manner the compensation compensation, bonus, pension, welfare, fringe, severance or other benefits of of, pay any current bonus to, or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into make any new or materially amend any existing Contract, transaction, commitment or arrangement with equity awards to any current or former director, officer, employee or affiliate consultant of the Company Yankees or any of its SubsidiariesSubsidiaries (other than increases in base salary in the ordinary course of business for employees who are not officers), (C) become a party to, establish, adopt, commence participation in, amend or terminate any stock option plan or other stock-based compensation plan, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Scheduleany compensation, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (includingseverance, without limitationpension, Section 2.02 hereof)retirement, become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminateprofit-sharing, or pay any benefit that is not required bywelfare benefit, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan agreement with or policy for the benefit of any current or former directordirectors, officer officers, employees or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any consultants of Yankees or its Subsidiaries to(or newly hired employees) or amend the terms of any outstanding equity-based awards, (xD) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (E) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any collective bargaining agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person with a labor union, works council or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedulesimilar organization, (iiF) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor change any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization actuarial or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary assumptions used to calculate funding obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures any Benefit Plan or other planned capital expenditures other than to change the manner in which contributions to such plans are made or the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of basis on which such types and in such amounts as contributions are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereofdetermined, except as may be required as a result by GAAP, (G) terminate without cause the employment of a change in applicable Law or in GAAP;
(n) any member of the Company shall not, and shall not permit any management committee of its Subsidiaries to, takeYankees, or agree (H) forgive any loans or commit issue any loans to takedirectors, any action that would, officers or is reasonably likely to, make any representation or warranty employees of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company Yankees or any of its Subsidiaries;
(pv) neither Yankees nor any of its Subsidiaries shall lease, license, transfer, exchange or swap, mortgage (including securitizations), or otherwise dispose (whether by way of merger, consolidation, sale of stock or assets, or otherwise) of any material portion of its assets, including the Company capital stock of Subsidiaries (it being understood that the foregoing shall not prohibit the sale of inventory in the ordinary course of business), except for (i) use its commercially reasonable efforts to, and shall cause dispositions of assets that in total have an aggregate fair market value of less than $50,000,000;
(vi) neither Yankees nor any of its Subsidiaries shall (A) acquire or invest in or agree to use their respective commercially reasonable efforts toacquire or invest in (whether by merger, consolidation, purchase or otherwise) any Person or assets, in which the expected gross expenditures and commitments (including the amount of any indebtedness assumed) (I) for all such acquisitions exceeds, in the aggregate, $50,000,000 or (II) is reasonably likely, individually or in the aggregate, to delay the satisfaction of the conditions set forth in Article V hereof or prevent the termination satisfaction of such conditions or (B) enter into any Contract joint venture, partnership or similar agreement with any Significant CustomerPerson;
(vii) subject to Section 4.13, neither Yankees nor any of its Subsidiaries shall (A) settle or compromise 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 Yankees or its Subsidiaries of $60,000,000 (provided that Yankees shall consult in good faith with respect to any such proposed settlement or compromise individually in excess of $20,000,000) or more or would involve any admission of material wrongdoing or any material conduct requirement or restriction by Yankees or its Subsidiaries, (iiB) not, and shall cause its Subsidiaries not tomodify, amend or terminate in any material respect any of its Material Contracts or waive, release or assign any material rights or claims thereunder in excess of $10,000,000 individually or in the aggregate or (C) enter into any new clearing services agreement or arrangement or modify or amend in any material respect any existing clearing services agreement or arrangement to extend the term or to increase the commitments of Yankees or any of its subsidiaries thereunder;
(viii) except to the extent otherwise required by Law, neither Yankees nor any of its Subsidiaries shall (A) make or change any Tax election, change any method of Tax accounting, file any amended Tax Return, or settle or compromise any audit or proceeding relating to Taxes, in each case, if such action would reasonably be expected to have an adverse effect on Yankees and its Subsidiaries that is material; (B) take any action specified in Section 4.1(a)(viii)(B) of the Yankees Disclosure Letter; or (C) permit any material 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;
(ix) neither Yankees nor any of its Subsidiaries shall permit any change in its financial 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 financial accounting principles, policies or practices shall be required by changes in GAAP;
(x) neither Yankees nor any of its Subsidiaries shall enter into any Contract with any Significant Customer, other than on terms substantially equivalent to, that includes a “non-compete,” exclusivity or more beneficial on balance to similar provision that would materially restrict the Company business of Braves or any of its Subsidiaries than(including Yankees and its Subsidiaries) following the Effective Time;
(xi) except as permitted pursuant to Section 4.1(a)(iv), the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or neither Yankees nor any of its Subsidiaries resulting shall enter into any Contract between itself, on the one hand, and any of its employees, officers or directors, on the other hand;
(xii) neither Yankees nor any of its Subsidiaries shall knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from such amendment, modification qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xiii) neither Yankees nor any of its Subsidiaries will authorize or supplement enter into an agreement to do any of the foregoing set forth in Section 4.1(a)(i) through Section 4.1(a)(xii) if Yankees would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in be prohibited by the aggregateterms of Section 4.1(a)(i) through Section 4.1(a)(xii) from doing the foregoing; and
(qxiv) it shall not fail to make in a timely manner any filings with the Company SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder.
(b) Braves covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, unless Yankees shall nototherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in Section 4.1(a) of the Braves Disclosure Letter:
(A) it shall not split, combine or reclassify its outstanding shares of capital stock; (B) it shall not declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any of its capital stock; and (C) it shall not directly or indirectly repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries toto purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, if such repurchase or acquisition is at a price above the then market value;
(ii) it shall not issue, sell, dispose of or grant, or authorize the issuance, sale, disposition or grant of, any shares of any class of its capital stock except (A) for fair market value or (B) upon the vesting of restricted stock units or the exercise of options, warrants, convertible securities or other rights of any kind to acquire any of its capital stock which were issued with an exercise or conversion price of not less than the market price at the time of issuance; provided, however, that the foregoing shall not prohibit issuances of common stock, restricted stock units, options or rights as part of normal employee compensation in the ordinary course of business; and provided, further, that this clause (B) shall not prohibit the issuance of capital stock, restricted stock units, options, warrants, convertible securities or other rights in connection with any equity financing contemplated by Braves in connection with the transactions contemplated by this Agreement;
(iii) it shall not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(iv) neither it nor any of its Subsidiaries shall knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) neither Braves nor any of its Subsidiaries shall acquire (other than with respect to any agreements entered into prior to the date of this Agreement) or agree to acquire (whether by merger, consolidation, purchase or commit otherwise, which have been previously publically disclosed or provided to Yankees) any Person or assets that is reasonably likely, individually or in the aggregate, to delay in any material respects the satisfaction of the conditions set forth in Article V hereof or prevent the satisfaction of such conditions; and
(vi) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing set forth in Section 4.1(b)(i) through Section 4.1(b)(v) if it would be prohibited by the terms of Section 4.1(b)(i) through Section 4.1(b)(v) from doing the foregoing.
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (or until termination of unless Parent shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(a) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable respective best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or bylaws; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (v) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(c) neither it nor any of its Subsidiaries shall (includingi) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets (other than, in the case of the Company or any of its Subsidiaries); or (iii) amendCompany, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements Shares issuable pursuant to which such Options were granted or (C) in connection with terminating options outstanding on the Options and date hereof under the Stock Plans;
); (cii) other than in the Company shall not (i) ordinary and usual course of business, transfer, lease, license, guarantee, sell, transfer or mortgage, pledge, dispose of or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in encumber any other fashion the corporate structure property or ownership assets (including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation incur or bylaws modify any material indebtedness or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or other liability; (iii) splitmake or authorize or commit for any capital expenditures other than in the ordinary and usual course of business; or (iv) by any means, combine make any acquisition of, or reclassify investment in, assets or stock of or other interest in, any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine other Person or reclassify any shares of its capital stockentity;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company it nor any of its Subsidiaries shall (i) grant terminate, establish, adopt, enter into, make any new grants or agree to awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase in any manner the salary, wage, bonus or other compensation or benefits of any current or former director, officer or employee, employees except (x) increases occurring in the ordinary and usual course of business consistent with past practice, increases (which shall include normal periodic performance reviews and bonuses expressly required under existing employment agreements, bonus plans related compensation and other agreements and arrangements listed benefit increases) or described in (y) actions taken pursuant to Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans7.7, (ii) amend any existing, or enter into any new or materially amend any existing Contractnew, transaction, commitment or arrangement employment agreements with any current or former director, officer, employee or affiliate employees of the Company or any of its Subsidiaries, Subsidiary or (iii) except as set forth in Section 5.01(e) take any action that would cause an acceleration of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated any employee rights under any Compensation and Benefit Plan that was Plan, including but not in existence on limited to any vesting of stock options prior to the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofEffective Time;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(he) neither the Company it nor any of its Subsidiaries shall adopt file, settle or put into effect a plan compromise any material claims or litigation or, except in the ordinary and usual course of complete business, modify, amend or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or terminate any of its Subsidiaries (other than material Contracts or waive, release or assign any transaction specifically contemplated by this Agreement)material rights or claims;
(if) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or neither it nor any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof Tax election or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration usual course of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithbusiness;
(lg) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission that would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or cause any of its Subsidiaries;representations and warranties herein to become untrue in any material respect; and
(ph) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or neither it nor any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment will authorize or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit into an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 6.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 8 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, conducted only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, including without limitation, limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; hereof or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its Subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate charter, articles of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, bylaws or bylaws equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or fringe benefits of of, or pay any bonus to, any current or former director, officer or employee, employee except increases in the ordinary course of business consistent with past practicepractice of less than 10% of each such individual's salary for non-officer employees, increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e6.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contractemployment, transactionconsulting, commitment severance, termination, change-of-control or arrangement indemnification agreement with any current or former director, officer, officer or employee or affiliate of the Company or any of its SubsidiariesCompany, or (iii) except as set forth in Section 5.01(e6.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 3.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or amend, modify or terminate, or pay any benefit that is not required by, terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof or (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 3.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement), except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s 's Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets other than (xi) pursuant to existing contracts and commitments described in Section 6.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets, including those described in Section 6.01(g) of the Company Disclosure Schedule), (iii) inventory in the ordinary course of business consistent with past practice, (iv) Permitted Liens, (v) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with U.S. generally accepted accounting principles and (vi) other than non-taxable transfers by or among the Company's Subsidiaries;
(h) the Company shall not, and shall not permit any of its Subsidiaries to, issue any letter of credit other than pursuant to the issuance of letters of credit in the ordinary course of business consistent with past practices of the Company and its Subsidiaries in an amount not to exceed $10,000,000 in the aggregate, incur, assume, be responsible for assume or pre-pay any Indebtedness, enter into any agreement to, to incur, assume, be responsible for assume or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations obligation of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “"keep well” " or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; ;
(i) the Company shall not, and shall not permit any of its Subsidiaries to, make or (y) sellforgive any loans, leaseadvances or capital contributions to, license or subject to any Lien or otherwise dispose guarantees for the benefit of, or agree to sell, lease or subject to any Lien or otherwise dispose ofinvestments in, any of its properties person or assets in excess of $25,000 individually or $50,000 in the aggregate entity, other than (i) loans or advances in the ordinary course of business to facilitate construction or renovation of stores pursuant to existing contracts and commitments described Material Contracts in Section 5.01(g) of an amount not to exceed $2,000,000 in the Company Disclosure Scheduleaggregate, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by such loans between or among the Company and any of its wholly-owned Subsidiaries and (iii) cash advances to the Company’s Subsidiaries's or any such Subsidiary's employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practice;
(hj) the Company shall not, and shall not permit any of its Subsidiaries to, assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except for the obligations of the Subsidiaries of the Company permitted under this Agreement;
(k) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, 41 recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(il) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), (ii) enter into, or materially amend, modify or supplement, any Lease or Material Contract, or (iiiii) waive, release, grant, assign, modify assign or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(jm) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j6.01(m) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 1,000,000 in the aggregate;
(kn) except for customer contracts entered into in the ordinary course of business, the Company shallshall not, and shall cause not permit its Subsidiaries to, renegotiate or enter into any new license, agreement or arrangement relating to any Intellectual Property;
(o) the Company and its Subsidiaries (i) shall continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s 's past practices and its Subsidiaries’ past practices, (ii) shall use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated;
(p) the Company shall not, and shall not permit any of its Subsidiaries to, establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(q) the Company shall not, and shall not permit any of its Subsidiaries to, amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (i) as required by this Agreement, (ii) except as set forth in Section 6.01(q) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (iii) in connection with terminating the Options and the Stock Plans;
(r) the Company shall, and shall cause its Subsidiaries to, (i) maintain all Leased Real Property any real property of which the Company and any of its Subsidiaries have ownership or a leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and terms or (ivii) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(ls) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into or materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, except as required by Law;
(mt) the Company shall not, and shall not permit any of its Subsidiaries to, conduct any plant closing or layoff that could implicate the WARN Act;
(u) the Company shall not, and shall not permit any of its Subsidiaries to, settle or compromise any pending or threatened suit, action, claim or litigation, except with respect to the settlement or compromise of any such matter which does not involve equitable or injunctive relief and does not obligate the Company and its Subsidiaries to make aggregate cash payments exceeding $25,000 individually or $125,000 in the aggregate;
(v) except as set forth in Section 6.01(v) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of and its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAPU.S. generally accepted accounting principles;
(nw) the Company shall not, and shall not permit any of its Subsidiaries to, revalue in any material respect any of its assets (including, without limitation, writing down or writing off any notes or accounts receivable in any material manner), except as required by U.S generally accepted accounting principles;
(x) the Company shall not, and shall not permit any of its Subsidiaries to, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (i) the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of Liabilities reflected on or reserved in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice, (ii) the payment of the Company's Expenses (as defined herein), including the payment of the fees and expenses of the Special Committee and the costs, fees and expenses incurred by the Special Committee or (iii) the payment of claims under any of the Benefit Plans;
(y) the Company shall not, and shall not permit any of its Subsidiaries to, knowingly and intentionally take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions to the Offer or any conditions to the Merger set forth in Article 6 7 not being satisfied, or knowingly and intentionally omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(oz) the Company shall not, and shall not permit any of its Subsidiaries to, to make or change any material tax election or change an annual accounting period with respect to Taxes, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o6.01(z) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Sources: Acquisition Agreement (Goodys Family Clothing Inc /Tn)
Interim Operations. Except (a) The Company and the Shareholder agree (except as otherwise expressly contemplated by this Agreement Agreement, including any Exhibits and Schedules hereto, or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement extent that Purchaser shall otherwise consent in accordance with Article 7 hereof):writing) that as to the Company:
(a1) The Company shall carry on the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only Business in the ordinary course Ordinary Course of business Business and the Company and its Subsidiaries shall use their all commercially reasonable best efforts to preserve intact their current its present business organizationsorganization, keep available the services of their current its present officers and employees and preserve their its relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors suppliers and other material third parties others having business dealings with them and to preserve the goodwill of their respective businessesit;
(2) The Company shall not and shall not propose to: (a) declare, set aside or pay any dividend, on, or make other distributions in respect of, any of its capital stock, except for those S corporation distributions necessary to cover applicable pass-through taxes on the Company's net income in 2002 prior to the Closing, or purchase or redeem any shares of its capital stock; (b) split, combine or reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (c) redeem, repurchase or otherwise acquire any shares of its capital stock; or (d) otherwise change its capitalization;
(3) Except as contemplated by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuancesell, issue, deliverpledge, sell authorize or agree propose the sale or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)of, pledge or otherwise encumber purchase or propose the purchase of, any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities class or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansconvertible securities;
(c4) the The Company shall not amend its certificate of incorporation or its bylaws;
(i5) The Company shall not sell, transfer or lease, pledge, encumber or otherwise dispose of or agree to sell, transfer or lease, pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien encumber or otherwise dispose of, any of its properties assets that are material or any other assets except in excess the Ordinary Course of $25,000 individually or $50,000 Business and in no event amounting in the aggregate other to more than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries$25,000;
(h6) neither the The Company nor shall not incur any of its Subsidiaries shall adopt indebtedness for borrowed money or put into effect a plan of complete guarantee any such indebtedness or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization issue or other reorganization sell any debt securities of the Company or guarantee any debt securities of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures others other than in the ordinary course of business consistent with past practices prior practice and in no event amounting in the aggregate to more than $25,000;
(7) The Company shall not make any capital expenditures in excess of $500,000 25,000 individually or $100,000 in the aggregateaggregate without the Purchaser's prior written consent;
(k) 8) The Company shall maintain the levels of inventory, materials and supplies used in the business of the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithpractice;
(l9) except as set forth The Company shall not accelerate the collection of its accounts receivable or delay the payment of its accounts payable or other liabilities, in Section 5.01(l) each case arising out of the operation of the business of the Company Disclosure Schedule, the in a manner which would be inconsistent with past practice;
(10) The Company shall not, and shall not permit any of its Subsidiaries to, (i) materially adopt or amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum agreement or understanding, grievance settlement or commitment, except, in each case, as required by LawEmployee Benefit Plan;
(m11) the The Company shall not, and shall not permit grant to any of its Subsidiaries to, change employees any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change increase in applicable Law compensation or in GAAPseverance or termination pay, or enter into any employment agreement with any employee;
(n12) the The Company shall notnot acquire (by merger, and consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or subdivision thereof, or make any investment by either purchase of stock or securities, contributions to capital, property transfer or, except in the Ordinary Course of Business, purchase of any property or assets, of any other individual or entity;
(13) The Company shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation material Tax election or warranty settle or compromise any material Tax liability;
(14) The Company shall not waive, release, grant or transfer any rights of the Company contained in this Agreement inaccurate material value or modify or change in any material respect atany Material Contract other than in the Ordinary Course of Business;
(15) The Company shall not take any action, or as fail to take any action, that is not in the Ordinary Course of any time prior to, the Effective Time Business or that is reasonably likely to result in any of the conditions representations and warranties of the Company and the Shareholders set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate this Agreement becoming untrue in any material respect at any such time or to prevent any such condition from not being satisfiedrespect;
(o16) The Company shall maintain in full force and effect all insurance coverages for its properties and assets substantially comparable to coverages existing on the date hereof;
(17) Within (i) forty five (45) days of the close of each month after the execution of this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating available to the Purchaser a preliminary balance sheet and income statement for the Company or any disclosing the financial position and results of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) operations of the Company Disclosure Schedule, consent to any extension or waiver of for the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;preceding month and year-to-date; and
(p18) the The Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplementmodify, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingcontract with a Related Party.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the The Company covenants and agrees that during the period from that, after the date of this Agreement hereof and prior to the Effective Time (or until termination of unless Parent shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(a) the its business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company and its Subsidiaries extent consistent therewith, it shall use their commercially its reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and it shall not permit any of its Subsidiaries to, (i) authorize for issuanceform or acquire (by means of transfer, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)) any Subsidiaries; (ii) amend its articles of incorporation or by-laws or amend, pledge modify or otherwise encumber any shares of its capital stock or terminate the capital stock of any of its SubsidiariesStock Plans, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents than as expressly required hereunder (including, without limitation, stock appreciation rights or phantom interestsas set forth in Section 6.10), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (iiiii) repurchasesplit, redeem combine or otherwise acquire reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock;
(c) it shall not (i) issue, sell, pledge, dispose of or encumber any shares of the capital stock of, or other equity interests of the Company securities convertible into or any of its Subsidiaries (including, without limitation, securities exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stockstock of any class or any Voting Debt or any other property or assets (other than Shares issuable pursuant to options outstanding on the date hereof under the Stock Plans); (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets or incur or modify any other material liability or modify any current material indebtedness; (iii) make or authorize or commit for any expenditures (including capital expenditures and shall not permit expenditures relating to the use of Third-Party Intellectual Property Rights or the development, marketing or in-licensing of any products) or, by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity in excess of (or reasonably likely to result in expenditures in excess of) $100,000 or (iv) authorize or enter into any agreement or other commitment relating to the licensing of any of its Subsidiaries to split, combine the Company's products or reclassify any shares the marketing by the Company of its capital stocka third-party's products;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and it shall not permit terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation or benefits of its Subsidiaries toany employees except, in the case of employees that are not executive officers or directors of the Company, increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases);
(e) it will not (x) declare, set aside or pay any dividends on (whether in cash, stock or other property)on, or make any other distributions in respect of, any of its capital stock stock, (except for dividends paid by direct y) split, combine or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor reclassify any of its Subsidiaries shall (i) grant capital stock or agree to any increase in any manner issue or authorize the compensation or benefits issuance of any current other securities in respect of, in lieu of or former directorin substitution for shares of its capital stock or (z) purchase, officer redeem or employee, except increases in the ordinary course otherwise acquire any shares of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate capital stock of the Company or any other securities thereof (other than the acquisition of its Subsidiaries, shares surrendered in whole or (iii) except as set forth in Section 5.01(e) partial satisfaction of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under exercise price for any Benefit Plan that was not in existence stock options outstanding on the date hereof and properly exercised in accordance with their terms) or amend any rights, warrants or modify or terminate, or pay options to acquire any benefit that is not required by, any Benefit Plan such shares or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofsecurities;
(f) the Company shall not, and it shall not permit settle or compromise any material claims or litigation or, except in the ordinary and usual course of business modify, amend or terminate any of its Subsidiaries tomaterial Contracts or waive, (x) enter into release or assign any new line of business, material rights or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionsclaims;
(g) the Company shall not, and it shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof Tax election or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as a beneficiary or loss loss-payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration usual course of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithbusiness;
(lh) except as set forth it shall continue to take all actions reasonably necessary in Section 5.01(l) connection with the continued leasing or subleasing of the Company Disclosure ScheduleBuilding One, the Company shall not, and but shall not permit enter into any further agreements relating to the lease or sublease of its Subsidiaries to, such property;
(i) materially amend any currently existing labor or collective bargaining agreementit shall continue to take all actions reasonably necessary in connection with the valuation of and sale of equipment in Building One, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) but shall not enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or agreements relating to the sale of any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Lawsuch equipment;
(mj) the Company shall not, and it shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAPincur additional indebtedness;
(nk) the Company shall not, and it shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission that would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or cause any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, representations and shall cause its Subsidiaries warranties herein to use their respective commercially reasonable efforts to, prevent the termination of become untrue in any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregatematerial respect; and
(ql) the Company shall not, and shall it will not permit any of its Subsidiaries to, agree authorize or commit enter into an agreement to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Skyepharma PLC)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the The Company covenants and agrees that during the period from as to itself and ------------------ its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) Time, the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable respective best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them associates, and to preserve the goodwill of their respective businesses;
(b) neither the Company shall not, and shall not permit nor any of its Subsidiaries toshall take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect. By way of amplification of the foregoing and not limitation, neither the company nor any of its Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly, take any action, including but not limited to the following, except with the prior consent of a Designated Officer (as defined below):
(a) it shall not (i) authorize for issuanceamend its articles of incorporation or by-laws, issue, deliver, sell or agree or commit except as may be required to issue, sell or deliver (whether through increase the issuance or granting number of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock Common Stock in connection with the conversion of the Convertible Loan, the Series A Preferred or the capital stock of any of its SubsidiariesSeries B Preferred, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options in each case outstanding as of the date hereof; (ii) split, combine or reclassify its outstanding shares of capital stock; (iii) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (iv) repurchase, redeem or otherwise acquire any shares of the capital stock acquire, or other equity interests of the Company or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(includingb) neither it nor any of its Subsidiaries shall (i) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets, except for (x) issuances of Common Stock upon conversion of the Company Convertible Loan, the Series A Preferred or the Series B Preferred, in each case outstanding on the date hereof, and (y) issuances of Series B Preferred upon exercise of warrants outstanding on the date hereof; (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries); or (iii) amendmake or authorize or commit for any capital expenditures or, modify by any means, make any acquisition of, or waive investment in, assets or stock of or other interest in, any term of any outstanding security of the Company other Person or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansentity;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by neither it in nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or alter through mergerawards under, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate modify, any -23- Company Compensation and Benefit Plans (including, without limitation, any grant or issuance of incorporation new Options, any amendment or bylaws changes to the terms of any Options or permit any repricing of its Subsidiaries to amend its articles of incorporationOptions), or bylaws increase the salary, wage, bonus or (iii) split, combine or reclassify other compensation of any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockemployees;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall settle or compromise any material claims or litigation or modify, declare, set aside amend or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, terminate any of its capital stock (except for dividends paid by direct material Contracts or indirect wholly owned Subsidiaries to the Company waive, release or to other wholly owned Subsidiaries of the Company consistent with past practices)assign any material rights or claims;
(e) neither the Company it nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof Tax election or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration usual course of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithbusiness;
(lf) except as set forth in Section 5.01(lmake any change, other than required by GAAP, to its accounting principles or procedures; and
(g) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor will authorize or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other an agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing. For the purposes of this Section 6.1, "Designated Officer" shall mean ------------------ any of ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, each of whom is an officer of the Parent.
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of on the Company Disclosure Schedule or as consented agreed to in writing by ParentMelita (which consent shall not be unreasonably conditioned, withheld or delayed), the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) except as otherwise described in Section 5.01(a) of the Company Disclosure Schedule, the business and operations of the Company and its Subsidiaries subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, conducted only in the ordinary course of business and the Company and its Subsidiaries subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiariessubsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, including without limitation, limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of on or prior to the date hereof; hereof or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiariessubsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) for the purchase of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options Common Shares pursuant to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock PlansCompany’s buy-back program;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries material subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiariessubsidiaries, except as otherwise provided on Section 5.01(c) of the Company Disclosure Schedule, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries subsidiaries to amend its articles certificate of incorporation, or bylaws or equivalent organizational documents or
(iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company it and its Subsidiaries shall be conductedconducted in accordance with the Operating Budget, and taken as a whole, and, to the books and records of the Company and its Subsidiaries shall be maintainedextent consistent therewith, only in the ordinary and usual course of business and consistent with past practice and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable respective best efforts to preserve its business organization intact their current business organizationsand maintain its existing relations and goodwill with all Governmental Entities (including, keep available without limitation, the services of their current officers and employees and preserve their relationships with their material SEC), ETP Holders, OTP Holders, Current Company Related Persons, customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors permit holders, Employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) it shall not (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries or any of the shares of Parent Common Stock by the Company shall notor any of its direct or indirect subsidiaries; (B) except as set forth in Section 5.1(c)(ii) of this Agreement, and shall not amend its certificate of incorporation or by-laws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries; or (E) repurchase, redeem or otherwise acquire, except in connection with the Stock Plan, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company or stock;
(iii) neither it nor any of its Subsidiaries shall (includingA) issue, without limitationsell, 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 or other equity interests of the Company any class or any of its SubsidiariesVoting Debt or any other property or assets other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Stock Plan); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth other than in Section 5.01(b) the ordinary and usual course of the Company Disclosure Schedulebusiness, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) transfer, lease, license, guarantee, sell, transfer or mortgage, pledge, dispose of or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in encumber any other fashion the corporate structure property or ownership assets (including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation incur or bylaws modify any material indebtedness or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws other liability; or (iiiC) split, combine or reclassify acquire any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockParent Common Stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(eiv) neither the Company it nor any of its Subsidiaries shall (iA) grant terminate, establish, adopt or agree enter into any Benefit Plans, except as required under applicable Law, (B) make any new grants or awards under any Benefit Plans, except that the Company may reissue such Company Options and Company Restricted Stock which was issued and outstanding as of the date of this Agreement and which are subsequently cancelled prior to the Effective Time, in each case pursuant to the terms and conditions of the applicable Benefit Plan; or (C) or amend or otherwise modify any Benefit Plan or increase in any manner the salary, wage, bonus or other compensation or benefits of any current or former director, officer or employeeemployees, except in accordance with ordinary and usual course of business consistent with past practice and to the extent all such increases and all such present or future costs associated with such amendments or modifications (x) have been fully reserved against in the Company Financial Statements or (y) are in accordance with the Operating Budget;
(v) except in the ordinary and usual course of business consistent with past practice or as fully reserved in the Operating Budget, neither it nor any of its Subsidiaries shall settle or compromise any material claims or litigation or modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(vi) neither it nor any of its Subsidiaries shall make any Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(vii) it shall and shall cause its Subsidiaries to, (i) timely make all filings with the SEC and any other Governmental Entity required to maintain PCX’s status as a national securities exchange and as a self-regulatory organization (as registered under Section 6 and as defined in Section 3(a)(26), respectively, of the Exchange Act) and to keep it and all of its Subsidiaries in compliance in all material respects with all Laws, (ii) keep PCX Equities and all of its Subsidiaries in compliance in all material respects with all Laws and PCX rules and (iii) cause PCX and its Subsidiaries to fulfill, in all material respects, its regulatory oversight functions over the ArcaEx Business in PCX’s capacity as a national securities exchange and self-regulatory organization (as registered under Section 6 and as defined in Section 3(a)(26), respectively, of the Exchange Act);
(viii) neither it nor any of its Subsidiaries (A) shall permit any change in its credit practices or accounting principles, policies or practice (including, without limitation, 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 and (B) shall pay, collect or accrue, as the case may be, the consolidated accounts receivable and accounts payable of the Company, for the period following the Calculation Month-End, other than in the ordinary and usual course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(hix) neither the Company it nor any of its Subsidiaries shall adopt take any actions that, if taken prior to the date hereof, would constitute or put into effect result in a plan breach of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this AgreementSection 5.1(i);
(ix) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or neither it nor any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company take any action or omit to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer take any action that would cause any of its representations and warranties herein to become untrue in any material rights or claims (whether such rights or claims arise under a Contract or otherwise);respect at any time; and
(jxi) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, will authorize or make enter into an agreement to do any capital expenditures of the foregoing.
(other than pursuant b) If the Closing Date shall not have occurred by March 31, 2005, and the Company shall thereafter determine that additional funding is necessary in order for it to commitments prior maintain a positive cash balance, Parent, within five business days of any written request therefor from the Company, will advance to the date hereof or other planned capital expenditures Company by wire transfer of immediately available funds to a bank account designated by the Company, the requested amount to support the Company and its Subsidiaries operations; provided that the aggregate amount of such advances outstanding at any time (after giving effect to all outstanding requests therefor from the Company) shall not be required to exceed $10,000,000, unless Parent shall consent in writing to a larger amount. Such advances may be repaid at any time at the ordinary course option of business consistent with past practices disclosed in Section 5.01(jthe Company. Such advances: (i) for the avoidance of doubt, shall constitute a “Total Adjusted Liability” of the Company Disclosure Schedule for purposes of the Calculation and the Final Working Capital Amount and for any other purpose required by category) GAAP or make applicable Law, until repaid in accordance with the terms of this Agreement and the terms of any commitments with respect other customary evidence of indebtedness Parent may request that the Company and any of its Subsidiaries execute and deliver to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
it as a condition to Parent making such advances (k) which the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good execute and responsible insurance companies adequately covering risks deliver to Parent prior to Parent becoming obligated to make any such advances pursuant to the terms of such types this Agreement); and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts shall not to permit any insurance policy naming it bear interest, and unless repaid by the Company, shall remain outstanding for so long as beneficiary or loss payable payee to this Agreement shall remain in effect and the Effective Time shall not have occurred. If this Agreement is terminated and the Effective Time shall not have occurred, such advances shall bear interest and be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases repaid in accordance with their terms, and (ivSection 8.5(a) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;this Agreement.
(lc) except as set forth in Section 5.01(l) of the Company Disclosure ScheduleExcept for any resignation, the Company shall notretirements, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor dismissals or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used reductions in-force announced by the Company or any of its Subsidiaries as of prior to the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the event that the Company shall notimplement any reductions in-force prior to the Effective Time, and shall not permit any of its Subsidiaries toParent shall, takeon demand, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of reimburse the Company contained in this Agreement inaccurate in for any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) severance costs associated therewith; provided that the Company shall notprovide Parent reasonable prior notice of, and Parent shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to have the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplementveto, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingreductions.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Archipelago Holdings Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees as to itself and its Subsidiaries that during the period from after the date of this Agreement hereof and prior to the Effective Time (unless Parent shall otherwise approve, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective best reasonable best efforts to (A) preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other business associates and (B) maintain and keep material third parties having business dealings with them properties and assets in as good repair and condition as such are in as of the date hereof, subject to preserve the goodwill of their respective businessesordinary wear and tear;
(bii) the Company shall notnot (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its articles of incorporation or by-laws or amend, modify or terminate the Rights Agreement; (C) split, combine, subdivide or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock (other than dividends from its direct or indirect wholly owned Subsidiaries and shall other than regular quarterly cash dividends not in excess of $0.255 per Share and regular quarterly cash dividends on the preferred and preference stock of its Subsidiaries); or (E) repurchase, redeem or otherwise acquire (except for (I) mandatory sinking funds obligations existing on the date hereof and (II) open market repurchases pursuant to the terms of the Company's Direct Stock Purchase Plan and Dividend Reinvestment Plan), or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of stock;
(iii) neither the Company or nor any of its Subsidiaries shall (includingA) issue, without limitationsell, 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 equity interests property or assets (other than (I) Shares issuable pursuant to options and other rights outstanding on the date hereof under the Stock Plans, issuances of additional options or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans and issuances of Shares pursuant to options granted after the date hereof pursuant to the Stock Plans and (II) Shares issuable pursuant to the terms of the outstanding Feline Prides); (B) (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any of its coal fines property or assets, or, (II) except as identified on Section 6.1(a)(iii) of the Company Disclosure Letter, other than in the ordinary and usual course of business and other than sales not in excess of $100,000,000 in the aggregate or $30,000,000 in respect of any transaction or series of its Subsidiaries)related transactions, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets; (C) make or authorize or commit for any capital expenditures or operation and maintenance expenditures in excess of 110% of those contemplated to be spent pursuant to the year 1999, 2000 or 2001 capital appropriations/spending budgets set forth in Section 6.1(a) of the Company Disclosure Letter; or (iiiD) amendby any means, modify make any acquisition of, or waive investment in, assets or stock of, or other interest in, any term other Person or entity in excess of $100,000,000 in the aggregate or $30,000,000 in respect of any outstanding security transaction or series of the Company or any of its Subsidiaries, related transactions;
(iv) except (A) as required by this Agreement, (B) as set forth in Section 5.01(b6.1(a)(iv) of the Company Disclosure ScheduleLetter, neither the Company nor any of its Subsidiaries shall (A) incur, assume or prepay any long-term debt or incur or assume any short-term debt other than in the ordinary and usual course of business in amounts and for purposes consistent with past practice under existing lines of credit, and except for the incurrence of long-term indebtedness in connection with accelerating the vesting schedules refinancing of existing indebtedness either at its stated maturity or at a lower cost of funds, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Options obligations of any third-party, including by means of any "keep well" or other agreement to support or maintain any financial statement condition of another person, except in the ordinary and usual course of business, (C) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates consistent with past practice, or (D) change any accounting principle, practice or method in a manner that is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock PlansCompany's regular independent accountants;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(ev) neither the Company nor any of its Subsidiaries shall (i) grant take or agree fail to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, to make any representation or warranty of the Company contained in this Agreement herein inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfiedTime, or omitthat is, individually or agree in the aggregate, reasonably likely to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfiedhave a Material Adverse Effect;
(ovi) except as required by applicable Law, an existing collective bargaining agreement or other Contract identified in Section 6.1(a)(vi) of the Company shall notDisclosure Letter, and shall not permit neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans (other than issuances of additional options, performance shares or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans, provided, that any such additional options, performance shares or rights to acquire Shares shall not vest in connection with the Merger and the other transactions contemplated by this Agreement), or except as required by any existing contract with a non-officer employer increase the salary, wage, bonus or other compensation of any 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);
(vii) except as required by applicable law, an existing collective bargaining agreement or other Contract identified in Section 6.1(a)(vii) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries shall grant any severance or termination pay to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreementemployment or severance agreement with any director or officer of it or such Subsidiaries, settle or compromise any Tax claimprovided, assessment or liability relating to that the foregoing shall not require the Company or to violate any of its Subsidiaries, or surrender any right obligations existing prior to claim a refund of Taxes, except the date hereof as set forth in Section 5.01(o5.1(h) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its SubsidiariesLetter;
(pviii) neither the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or nor any of its Subsidiaries thanshall settle or compromise any material claims or litigation or amend or terminate any of its material Contracts or waive, the terms of such Contract prior to the making of such amendment release or modification, and assign any material rights or claims;
(iiiix) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of neither the Company or nor any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements shall make any material Tax election (other than in the aggregateordinary and usual course or as is required by Law) or 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; and
(qx) neither the Company shall not, and shall not permit nor any of its Subsidiaries to, agree will authorize or commit enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement):
(i) the business of Parent and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective best reasonable efforts to (A) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates and (B) maintain and keep material properties and assets in as good repair and condition as such are in as of the date hereof, subject to ordinary wear and tear;
(ii) it shall not (A) amend its articles of incorporation or by-laws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable, in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly owned Subsidiaries and other than regularly quarterly cash dividends not in excess of $0.515 per share of Parent Common Stock and regularly quarterly cash dividends on the preferred and preference stock of its ▇▇▇▇▇▇▇▇▇▇▇▇; (▇) ▇▇▇▇▇▇▇▇▇▇, ▇▇deem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of Parent Common Stock or any securities convertible into or exchangeable or exercisable for any shares of Parent Common Stock (other than repurchases, redemptions or other acquisitions which are made at the then-prevailing market price of Parent Common Stock on the NYSE and which in the aggregate do not exceed ten percent of the shares of Parent Common Stock outstanding as of the date hereof) or (E) except as permitted under this Agreement, enter into any agreement with respect to a merger, reorganization, share exchange, consolidation or similar transaction involving, or any purchase of all or substantially all of the equity securities of it or any of its Significant Subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X under the Exchange Act);
(iii) neither Parent nor any of its Subsidiaries shall, (A) 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 Parent Common Stock (other than (I) shares of Parent Common Stock issuable pursuant to options outstanding on the date hereof under the Parent Stock Plan, issuances of additional options or rights to acquire shares of Parent Common Stock granted pursuant to the terms of the Parent Stock Plan as in effect on the date hereof in the ordinary and usual course of the operation of such Parent Stock Plan and issuances of shares of Parent Common Stock pursuant to options granted after the date hereof pursuant to the Parent Stock Plan and (II) issuances of Parent Common Stock, or securities convertible with or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, shares of Parent Common Stock, to a third-party on arms-length terms not in excess of 20% of the number of shares of Parent Common Stock outstanding as of the date hereof), (B) other than pursuant to the year 1999, 2000 or 2001 capital appropriations/ spending budgets set forth in Section 6.1(b) of the Parent Disclosure Letter and other than in the ordinary and usual course of business (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any property or assets, and other than sales not in excess of $250,000,000 in the aggregate; or (II) by any means, make any acquisition of, or investment in, assets or stock of, or other interest in, any other Person or entity in excess of $250,000,000 in the aggregate or (C) acquire "Beneficial Ownership" (as such term is defined in the Rights Agreement) of any Shares;
(iv) Parent shall not change any material accounting principle, practice or method in a manner that is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by Parent's regular independent accountants;
(v) neither Parent nor any of its Subsidiaries shall take or fail to take any action that is reasonably likely to make any representation or warranty of such party contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that is, individually or in the aggregate, reasonably likely to have a Material Adverse Effect; and
(vi) neither Parent nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except Seller and the Company covenant and agree that after June 30, 1997 and prior to the Closing (unless Buyer shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed), except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):Agreement:
(a) the Company's business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and the Company and its Subsidiaries shall use their commercially reasonable its best efforts to preserve intact their current its business organizations, keep available the services of their current officers manufacturing license, pioneer status and employees manufacturing warehouse license intact and preserve their relationships maintain its existing relations and goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliversell, sell pledge, dispose of or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock of, or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock or other equity interests of the Company any class or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company voting debt or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans other property or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, assets; (ii) amend its Memorandum and Articles of Association or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or by-laws; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend or make any distribution payable in cash, stock or property in respect of any capital stock; or (v) repurchase, redeem or otherwise acquire any shares of its capital stock, and shall not permit stock or any of its Subsidiaries to split, combine securities convertible into or reclassify exchangeable or exercisable for any shares of its capital stock;
(dc) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets or incur or modify any material indebtedness or other liability; (iii) except as disclosed in budgets provided to the other party hereto prior to the date hereof, make any commitments for, make or authorize any capital expenditures other than in the ordinary and usual course of business and in amounts less than the equivalent of US $5,000 individually and US $25,000 in the aggregate or, by any means, make any acquisition of, or investment in, assets or stock of any other person or entity; or (iv) enter into any joint venture, merger or other similar agreement with any person;
(d) the Company shall not permit terminate, establish, adopt, enter into, make any of its Subsidiaries tonew grants or awards under, declareamend or otherwise modify, set aside any compensation or pay any dividends on (whether in cashbenefit plan, stock or increase the salary, wage, bonus or other property), or make compensation of any other distributions employee except increases occurring in respect of, any the ordinary and usual course of its capital stock business in accordance with established past practice (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practiceswhich shall include normal periodic performance reviews and related compensation and benefit increases);
(e) neither the Company nor shall not settle or compromise any material claims or litigation or, except in the ordinary and usual course of business modify, amend or terminate any of its Subsidiaries shall (i) grant material contracts or agree to waive, release or assign any increase in any manner the compensation material rights or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofclaims;
(f) the Company shall not, and shall not make any tax election or permit any of its Subsidiaries to, (x) enter into any new line 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, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;and
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person authorize or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other an agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Sources: Stock Purchase Agreement (Praegitzer Industries Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless SBC shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement Agreement, disclosed in accordance with Article 7 hereofthe Company Disclosure Letter or required by applicable Law):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially all reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsregulators, licenseesdistributors, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) it shall not (A) amend its certificate of incorporation or by-laws or amend, modify or terminate the Rights Agreement; provided, however, that nothing in this Agreement shall prevent the Company from reducing below 20% the beneficial ownership threshold in the definition of an Acquiring Person (as defined in the Rights Agreement) or extending the Final Expiration Date of the Rights Agreement (as defined therein) or adopting a new rights agreement having substantially similar terms as the Rights Agreement and not inconsistent with (x) this proviso, (y)Section 5.1(o) (assuming references therein are to such a new rights agreement) or (z) the transactions contemplated by this Agreement; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock, other than regular quarterly cash dividends in amounts consistent with its past practice or rights to purchase Company shall notShares or Company Preference Shares pursuant to any successor agreement to the Rights Agreement, and shall not adopted in accordance with the terms of this Agreement; or (D) repurchase, redeem or otherwise acquire or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber except in open market transactions in connection with the Company Stock Plans, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, but subject to the Company's obligations under subparagraph (iii) below.
(iii) neither it nor any of its Subsidiaries shall knowingly take any action that would prevent the Merger from qualifying for "pooling of interests" accounting treatment or as a "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties herein to become untrue in any material respect;
(iv) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards of stock-based compensation or other benefits under, amend or otherwise modify, any Company Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any directors, officers or key employees except (A) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Company Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice, (B) in the normal and usual course of business (which shall include normal periodic performance reviews and related Company Compensation and Benefit Plan increases and the provision of individual Company Compensation and Benefit Plans consistent with past practice for promoted or newly hired officers and employees and the adoption of Company Compensation and Benefit Plans for employees of new Subsidiaries in amounts and on terms consistent with past practice); provided, that in no event shall it institute a broad based change in compensation, unless it shall have used its reasonable best efforts to provide SBC with prior notice of any such change or, if the Company was unable to provide such prior notice, the Company shall provide SBC with notice as soon as practicable following any such change, or (C) for actions necessary to satisfy existing contractual obligations under Company Compensation and Benefit Plans existing as of the date hereof;
(v) neither it nor any of its Subsidiaries shall issue any Company Preferred Shares or Company Preference Shares or incur any indebtedness for borrowed money or guarantee any such indebtedness if it should reasonably anticipate that after such incurrence any of its or any of its Subsidiaries' outstanding senior indebtedness would be rated A or lower by Standard & Poor's;
(vi) neither it nor any of its Subsidiaries shall make any capital expenditures in any period of twelve consecutive months following the date hereof in an aggregate amount in excess of 150% of the aggregate amount reflected in the Company's capital expenditure budget for such year, a copy of which has been provided to SBC;
(vii) neither it nor any of its Subsidiaries shall transfer, lease, license, sell, mortgage, pledge, encumber or otherwise dispose of any of its or its Subsidiaries property or assets (including capital stock of any of its Subsidiaries) with a fair market value in excess of $1 billion in the aggregate in any period of twelve consecutive months following the date hereof except for transfers, leases, licenses, sales, mortgages, pledges, encumbrances, or other dispositions in the ordinary course of business consistent with past practice;
(viii) neither it nor any other securities of its Subsidiaries shall issue, deliver, sell, or encumber shares of any class of its common stock or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares except, (A) any such shares issued pursuant to options and other awards outstanding on the date hereof under the Company Stock Plans, awards of options and other awards granted hereafter under the Company Stock Plans in accordance with this Agreement and shares issuable pursuant to such awards, and (B) up to an aggregate amount of $3.6 billion of such shares, securities securities, rights, warrants or convertible securities or any other securities or equity equivalents options (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding valued at their fair market value as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock agreement to make such acquisition) in any period of twelve consecutive months following the date hereof to fund, in whole or other equity interests in part, the cost of the Company any acquisition or any acquisitions permitted under clause (ix) below following reasonable notice to SBC of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind intention to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which take such Options were granted or (C) in connection with terminating the Options and the Stock Plansaction;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(eix) neither the Company it nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets spend in excess of $25,000 individually or $50,000 3.6 billion in the aggregate other than in any period of twelve consecutive months following the date hereof to acquire any business, whether by merger, consolidation, purchase of property or assets or otherwise (i) pursuant to existing contracts and commitments described in Section 5.01(g) valuing any non-cash consideration at its fair market value as of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) date of the Company Disclosure Scheduleagreement for such acquisition); provided, (iii) Permitted Liensthat no such acquisition would prevent, (iv) Liens relating materially delay or materially impair its ability to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established consummate the transactions contemplated by this Agreement. Notwithstanding the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) foregoing, neither the Company it nor any of its Subsidiaries shall adopt or put into effect a plan acquire any business the acquisition of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization which would subject SBC and its Subsidiaries following the consummation of the Company Merger to any Commercial Mobile Radio Service spectrum aggregation limit restriction pursuant to the provisions of 47 C.F.R. Section 20.6 or any of place SBC and its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) following the consummation of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations Merger in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) violation of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.Cellular Cross Ownership
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of Prior to the Closing Date, unless the Company Disclosure Schedule or as has consented to in writing by Parentthereto, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):which consent will not be unreasonably withheld, Assignor:
(ai) the business shall conduct its operations according to its usual, regular and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and in substantially the Company and its Subsidiaries same manner as heretofore conducted;
(ii) shall use their commercially its reasonable best efforts to preserve intact their current its business organizations, keep available the services of their current officers organization and employees goodwill and preserve their maintain satisfactory relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties those persons having business dealings relationships with them and to preserve the goodwill of their respective businessesit;
(biii) shall promptly notify the Company shall not, and shall not permit of (x) any of material change in its Subsidiaries to, condition (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase financial or otherwise), pledge business, properties, assets, liabilities or otherwise encumber the normal course of its business or of its properties, (y) any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or (z) the breach of any representation or warranty contained herein;
(iv) shall not issue any shares of its capital stock or securities;
(v) shall not (w) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the capital stock obligations of any of its Subsidiariesother individual, corporation or other entity, (x) make any loans or advances to any other securities or any securities convertible or exercisable intoperson, or any rightsexcept in each case in the ordinary course of business, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (y) acquire (including, without limitation, for cash or shares of stock, by merger, consolidation, or acquisition of stock appreciation rights or phantom interests)assets) any interest in any corporation, partnership or other business organization or division thereof or any assets, or make any investment either by purchase of stock or securities, contributions of capital or property transfer or, except for issuances in the ordinary course of Common Shares upon the exercise business, consistent with past practice, purchase any property or assets of Options outstanding as any other person or (z) effect a sale or other disposition of any of the date hereof; (ii) repurchase, redeem Assets or otherwise acquire any shares of allow the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights creation of any kind to acquire, capital stock lien or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansencumbrance thereon;
(cvi) the Company shall not (ix) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), dividend or make any other distributions in distribution or payment with respect ofto any shares of its capital stock or other ownership interests or (y) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or make any commitment for any such action;
(vii) shall not amend or otherwise change its articles of incorporation or bylaws or equivalent organizational documents
(viii) shall not increase the compensation payable or to become payable to its officers or employees, pay any employment related or other bonus to its shareholder, or, except as presently bound to do, grant any severance or termination pay to, or enter into any employment or severance agreement with, any of its capital stock (except for dividends paid by direct directors, officers or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)employees;
(eix) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit take any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures action other than in the ordinary course of business and in a manner consistent with past practices in excess of $500,000 in the aggregate;practice with respect to accounting policies or procedures; and
(kx) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, exceptagree, in each casewriting or otherwise, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change to take any of the accounting policies, practices foregoing actions or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, which would make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, untrue or incorrect as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingClosing Date.
Appears in 1 contract
Sources: Asset Purchase Agreement (Ultimate Software Group Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time date on which Purchaser's nominees comprise a majority of the Board of Directors of the Company (or until termination of unless Praxair shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially its reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) it shall not (A) sell or pledge any capital stock owned by it in any of its Subsidiaries; (B) amend the Company shall notCharter or its by-laws or amend, modify or terminate the Rights Agreement; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any Shares or Preferred Shares other than regular quarterly or semi-annual cash dividends not in excess of $0.12 per Share and shall not regular quarterly or semi-annual cash dividends on the Preferred Shares; or (E) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests except in connection with the ordinary course of operations of the Company or CBI Salaried Employee Stock Ownership Plan (1987);
(iii) neither it nor any of its Subsidiaries shall except as disclosed in Section 7.1(a) of the Company Disclosure Letter (includingA) issue, without limitationsell, pledge, dispose of or encumber, or authorize or propose the issuance, sale, pledge, disposition or encumbrance of, any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets (other than Shares issuable pursuant to options outstanding on the date hereof under the Stock Plan or upon conversion of Convertible Preferred Shares; (B) other than in the Company ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of any other property or assets or encumber any property or assets (including capital stock of any of its Subsidiaries)) or incur or modify any material indebtedness or other liability; or (iiiC) amendmake any commitments for, modify make or waive authorize any term of any outstanding security of the Company or any of its Subsidiariescapital expenditures other than existing capital expenditures required to be made pursuant to existing capital projects, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b7.1(a)(iii) of the Company Disclosure ScheduleLetter, in connection with accelerating the vesting schedules which have been previously authorized or, by any means, make any acquisition of, or investment in, assets or stock of the Options to the extent required by the Stock Plans any other Person or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansentity;
(civ) the Company shall not (iexcept as disclosed in Section 7.1(a) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) Disclosure Letter, neither the Company it nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required byestablish, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not toadopt, enter into, make any new grants or materially amendawards under, modify amend or supplementotherwise modify, any Lease Compensation and Benefit Plans or increase the salary, wage, bonus or other Material Contract under which the costs or obligations compensation of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements employees other than increases in compensation in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.ordinary course
Appears in 1 contract
Interim Operations. Except (a) The Company agrees that, between the date of this Agreement and the Effective Time, except (i) as otherwise expressly contemplated by this Agreement or Agreement, (ii) as set forth in Section 5.01 7.1(a) of the Company Disclosure Schedule Letter, (iii) as required by applicable Law, or as consented (iv) to the extent Parent otherwise consents in writing by Parent(which consent shall not be unreasonably withheld, conditioned or delayed), the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations businesses of the Company and its the Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in all material respects in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, except (A) as expressly contemplated by this Agreement, (B) as set forth in Section 7.1(a) of the Company Disclosure Letter, (C) as required by applicable Law or (D) to the extent Parent otherwise consents in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Company agrees that neither the Company nor any Subsidiary shall, between the date of this Agreement and the Company and Effective Time, do any of the following:
(i) amend or restate the articles of incorporation or bylaws of the Company, or such similar organizational or governing documents of each of its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesSubsidiaries;
(bii) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuancegrant, issue, deliver, sell or agree or commit to issuesell, sell or deliver (whether through the issuance or granting of optionstransfer, commitments, subscriptions, rights to purchase or otherwise)dispose of, pledge or otherwise encumber any shares of its capital stock the Company’s or the capital stock of any of its Subsidiaries’ capital stock or equity interests, any other voting securities or any securities convertible into or exercisable intoexchangeable for, or any rights, warrants or options to acquire, any such sharesshares of capital stock or equity interests, voting securities or convertible securities or any securities, other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances than the issuance of Common Shares issuable upon the exercise of Company Options or upon the vesting of RSUs outstanding under the Stock Plans as of the date hereof; of this Agreement or issued as required by the employment agreements and the Stock Plans;
(iiiii) repurchasedeclare, redeem authorize, set aside, make or otherwise acquire pay any shares dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of the its capital stock or other equity interests of interests, except for dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any of its Subsidiaries other direct or indirect wholly owned Subsidiary;
(includingiv) reclassify, without limitationcombine, securities exchangeable forsplit, subdivide or optionsredeem, warrants, calls, commitments purchase or rights of any kind to otherwise acquire, directly or indirectly, any capital stock or other equity interests of the Company or any of its Subsidiaries); ;
(v) (A) acquire (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business or business organization, any division or business unit thereof or any material assets, (B) incur, create, assume or otherwise become liable for any amount of Indebtedness or other liability or issue any debt securities or any right to acquire debt securities or assume, guarantee, endorse or otherwise become responsible or liable for any liability of any other Person other than (1) in the ordinary course of business consistent with past practice or (iii2) amend, modify draws on any existing credit facility or waive any term line of any outstanding security credit of the Company or any of its SubsidiariesSubsidiaries solely for working capital purposes, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
enter into any new line of business, (cD) the Company shall not (i) sellmake any loans, transfer advances or pledgecapital contributions to, or agree to sellinvestments in, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) Persons other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to and other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases than in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (yE) sell, lease, license or subject to any Lien license, encumber or otherwise dispose ofof or transfer (by merger, consolidation, sale of stock or agree to sell, lease assets or subject to otherwise) any Lien or otherwise dispose of, any amount of its properties assets other than in the ordinary course of business consistent with past practice;
(vi) make or assets commit to make any capital expenditure (not including capital expenditures for rental instruments) other than in respect of those capital expenditure projects that are (A) contemplated by the Company’s fiscal year 2012 forecast or (B) not in excess of $25,000 individually or $50,000 5,000,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiariesaggregate;
(hvii) neither the Company nor any of its Subsidiaries shall adopt or put enter into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Subsidiary (other than the Merger);
(viii) (A) increase the salary, wages, benefits, bonuses or other compensation payable or to become payable to its current or former directors, officers or Employees, except for increases required under employment agreements existing on the date hereof, (B) enter into or amend or otherwise alter any transaction specifically employment, change of control, retention or severance agreement with, or establish, adopt, enter into or amend any Benefit Plan (other than ordinary course changes to any ERISA plan other than severance plans), (C) except as required under any employment agreement existing on the date hereof or as may be required to implement the actions contemplated by this Agreement);
(i) except as set forth in , including Section 5.01(i) 4.3 and Section 7.8, accelerate the vesting or payment of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, compensation or materially amend, modify or supplement benefit under any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)Benefit Plan, or (iiD) waivetake any action to fund the payment of compensation or benefits under any Benefit Plan, releaseexcept, grantin the case of clauses (C) and (D), assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed practice, or as may be required by the terms of any Benefit Plan in effect on the date hereof or to comply with applicable Law, including Section 5.01(j) 409A of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregateCode;
(kix) unless otherwise required by Law, enter into any collective bargaining agreement or other contract with a labor union, works council or other labor organization;
(x) make any material change to its methods of accounting, principles or practices (or change an annual accounting period) in effect as of the Company shalldate of this Agreement, and shall cause its Subsidiaries to, (i) continue except as required by changes in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts GAAP or Law or by the SEC or as are consistent with recommended by the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithindependent registered public accounting firm;
(lxi) except as set forth in Section 5.01(l(A) of the Company Disclosure Schedulemake, the Company shall notchange or rescind (or file a request to make, and shall not permit change or rescind) any of its Subsidiaries tomaterial Tax election, (iB) materially amend settle or compromise any currently existing labor material Tax liability, audit claim or collective bargaining agreementassessment, memorandum (C) surrender any right to claim for a Tax refund, (D) change in any material respect (or understandingfile a request to make any such change) any accounting method in respect of Taxes, grievance settlement (E) file any amendment to an income or any other agreement or commitment to or relating to any labor unionmaterial Tax Return, or (iiF) enter into any labor or collective bargaining closing agreement, memorandum settle or understandingcompromise any material claim or material assessment in respect of Taxes, grievance settlement or any other agreement or commitment to or relating (G) consent to any labor union which is different extension or waiver of the statute of limitations applicable to any claim or assessment in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitmentof Taxes, except, in each case, as required by Law;
(mxii) write up, write down or write off the Company shall not, and shall not permit book value of any of its material assets, other than (A) in the ordinary course of business and consistent with past practice or (B) as may be required by GAAP;
(xiii) (A) waive, settle, satisfy or compromise any claim against the Company (which shall include any pending or threatened action), except to the extent subject to reserves existing on the date of this Agreement, or (B) waive, settle, satisfy or compromise any material claim by the Company, except in the ordinary course of business consistent with past practice;
(xiv) other than in the ordinary course of business consistent with past practice and on terms not materially adverse to the Company and the Subsidiaries totaken as a whole, change enter into, amend, modify, cancel, waive any rights under or consent to the termination of any Material Contract or any Contract that would be a Material Contract if in effect on the accounting policiesdate of this Agreement;
(xv) enter into, practices renew or procedures (including tax accounting policiesamend in any material respect any transaction, practices and procedures) used by Contract, arrangement or understanding between the Company or any of its Subsidiaries as Subsidiaries, on the one hand, and any Affiliate of the date hereofCompany (other than any of the Company’s Subsidiaries), on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Exchange Act, except as may be required as a result for any agreement, renewal or amendment made in the ordinary course of a change in applicable Law business consistent with past practice or in GAAPcontemplated by the Company’s fiscal year 2012 budget;
(nxvi) the Company shall not(A) assign, and shall not permit any of its Subsidiaries totransfer, takelicense or sublicense, mortgage or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in encumber any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to Intellectual Property owned by the Company or any of its Subsidiaries, except for non-exclusive licenses or surrender non-exclusive sublicenses of such Intellectual Property in the ordinary course of business consistent with past practice, or (B) fail to pay any right fee, take any action, protect any trade secret, or make any filing reasonably necessary to claim a refund of Taxes, except as set forth in Section 5.01(o) maintain its ownership of the material Intellectual Property owned by the Company Disclosure Schedule, consent or any of its Subsidiaries; or
(xvii) agree in writing to do any extension or waiver of the limitation period applicable foregoing.
(b) Without the prior written consent of the Company, Parent and Merger Sub shall not, and shall cause the Guarantor and their respective Affiliates to not, (i) enter into discussions or negotiations regarding any Tax claim Contracts or assessment relating arrangements or understandings (whether oral or written) or commitments to enter into Contracts, arrangements or understandings (whether oral or written) or (ii) amend or otherwise supplement any Contracts, arrangements or understandings (whether oral or written) in existence on the date of this Agreement, in the case of clauses (i) and (ii) that are between Parent, Merger Sub, the Guarantor or any of their Affiliates, on the one hand, and any officer or director of the Company or any of its Subsidiaries, or take on the other hand.
(c) If the Company identifies any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit activities of the Company or any of its Subsidiaries;
(p) , including those activities of their respective directors, officers, managers, employees, independent contractors, representatives or agents, that the Company reasonably believes to be in violation of the FCPA, the Company shall (i) use its commercially reasonable best efforts to, and shall to cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any each of its Subsidiaries than, the terms of and Affiliates to cease such Contract prior to the making of such amendment activities and take any additional remedial action reasonably requested by Parent or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of that the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in reasonably deems appropriate under the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingcircumstances.
Appears in 1 contract
Sources: Merger Agreement (Immucor Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (unless Keystone shall 36 otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement, the Stock Option Agreement, the Company Disclosure Letter or as required by applicable Law):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially all reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) the Company shall not, and it shall not (A) amend its certificate of incorporation or by-laws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (D) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the any securities convertible into or exchangeable or exercisable for any shares of its capital stock of stock;
(iii) neither it nor any of its SubsidiariesSubsidiaries shall knowingly take any action that would prevent the merger from qualifying as a tax-free "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties herein to become untrue in any material respect;
(iv) 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 Compensation and Benefit Plans or Stock Plans or increase the salary, wage, bonus or other securities compensation of any directors, officers or employees or take any action which would result in an acceleration of benefits or vesting under the Stock Plans as a result of the consummation of the Merger which would not otherwise occur pursuant to the terms and conditions of such benefits or Stock Plan grants, awards or options as in effect on the date hereof;
(v) neither it nor any of its Subsidiaries shall issue any preferred stock or incur any indebtedness for borrowed money (other than indebtedness in the ordinary course of business consistent with past practice, indebtedness incurred solely for the purpose of funding the Escrow Account or the replacement or refinancing of existing short-term indebtedness); or guarantee any such indebtedness;
(vi) neither it nor any of its Subsidiaries shall make any capital expenditures in an aggregate amount in excess of the aggregate amount reflected in the Company's capital expenditure budget heretofore delivered to Keystone;
(vii) except as contemplated by
Section 6.1 (a)(iv), neither the Company nor any of its Subsidiaries shall issue, deliver, sell, or encumber shares of any class of its common stock or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such sharesshares except the option granted under the Stock Option Agreement, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options options and performance share programs outstanding as of on the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and hereof under the Stock Plans, and shares issuable pursuant to such options and performance share programs;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(eviii) neither the Company it nor any of its Subsidiaries shall (i) grant acquire any business, whether by merger, consolidation, purchase of property or agree to any increase in any manner the compensation assets or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofotherwise;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(hix) neither the Company it nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments agree prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingforegoing after the Effective Time.
(b) Keystone covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or in the Keystone Disclosure Letter or as required by applicable Law):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) amend its certificate of incorporation or by-laws in any manner that would prohibit or hinder, impede or delay in any material respect the Merger or the consummation of the transactions contemplated hereby;
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of Prior to the Closing Date, unless the Company Disclosure Schedule or as has consented to in writing by Parentthereto, the Operating Company:
(i) shall conduct its operations according to its usual, regular and ordinary course in substantially the same manner as heretofore conducted;
(ii) shall use its reasonable efforts to preserve intact its business organization and goodwill and maintain satisfactory relationships with those persons having business relationships with it;
(iii) shall promptly notify the Company covenants and agrees that during of (x) any material change in its condition (financial or otherwise), business, properties, assets, liabilities or the period from the date normal course of this Agreement to the Effective Time its business or of its properties, (y) any material litigation or material governmental complaints, investigations or hearings (or until termination communications indicating that the same may be contemplated), or (z) the breach of this Agreement in accordance with Article 7 hereof):any representation or warranty contained herein;
(aiv) shall not issue any equity interest; 9
(v) shall not (w) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the business and operations obligations of the Company and its Subsidiaries shall be conductedany other individual, and the books and records of the Company and its Subsidiaries shall be maintainedcorporation or other entity, only (x) make any loans or advances to any other person, except in each case in the ordinary course of business, (y) acquire (including, without limitation, for cash or shares of stock, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership or other business and organization or division thereof or any assets, or make any investment either by purchase of stock or securities, contributions of capital or property transfer or, except in the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationsordinary course of business, keep available consistent with past practice, purchase any property or assets of any other person or (z) effect a sale or other disposition of any of the services Assets or allow the creation of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesany lien or encumbrance thereon;
(bvi) the Company shall not, and shall not permit (x) declare, set aside or make any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell distribution or agree or commit payment with respect to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiariesother ownership interest, any other securities than such distributions or any securities convertible payments as are consistent with past practice or exercisable into(y) directly or indirectly redeem, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem purchase or otherwise acquire any shares of the its capital stock or other equity interests of the Company or make any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of commitment for any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansaction;
(cvii) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, by-laws or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockequivalent organizational documents;
(dviii) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit increase the compensation payable or to become payable to its officers or employees, pay any of employment related or other bonus to its Subsidiaries shareholder, or, except as presently bound to do, grant any severance or termination pay to, declare, set aside or pay enter into any dividends on (whether in cash, stock employment or other property), or make any other distributions in respect ofseverance agreement with, any of its capital stock (except for dividends paid by direct directors, officers or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)employees;
(eix) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit take any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures action other than in the ordinary course of business and in a manner consistent with past practices in excess of $500,000 in the aggregate;practice with respect to accounting policies or procedures; and
(kx) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, exceptagree, in each casewriting or otherwise, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change to take any of the accounting policies, practices foregoing actions or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, which would make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, untrue or incorrect as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingClosing Date.
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