Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents. (b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to: (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company); (ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions); (iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries; (iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice; (v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter; (vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements; (vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries; (viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii); (ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions; (x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 4 contracts
Sources: Merger Agreement, Merger Agreement (Twenty-First Century Fox, Inc.), Merger Agreement (Walt Disney Co/)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2a) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) business of the Company Disclosure Letter)and its Subsidiaries shall be conducted in the ordinary and usual course, (b) each of the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business in the ordinary course of preserve its business consistent with past practice, organizations and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization assets intact and maintain the Retained Business’ its rights, franchises, powers and privileges and its existing relations and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
, and (bc) subject to Section 5.10, the Company and its Subsidiaries shall take no action that would reasonably be expected to adversely affect or materially delay the ability of the Company to obtain any necessary approvals of any Regulatory Authorities or other Governmental Authority required for the transactions contemplated hereby, to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) expressly required by applicable this Agreement or as required by Law, (2B) expressly required by the Transaction Documents as Parent may approve in writing (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld or delayed) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 5.01 of the Company Disclosure Letter)Schedule, the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 4 contracts
Sources: Merger Agreement (CU Bancorp), Merger Agreement (Pacwest Bancorp), Merger Agreement (Square 1 Financial Inc)
Interim Operations. (a) The Each of the Company covenants and agrees Parent covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent the Company or Parent, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement, as may be required by applicable LawLaw or as set forth in Section 7.1(a) of such Party’s Disclosure Letter, (2i) expressly required by the Transaction Documents (including in connection with the Separation each Party and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, will use its commercially reasonable best efforts to conduct the Retained Business its business in all material respects in the ordinary course of business consistent with past practice, Ordinary Course and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, such Party and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorslicensors, licensorslicensees, creditors, lessors, employees Service Providers and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees Service Providers and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the generality of, of and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatof Section 7.1(a), from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless Parent shall otherwise approve w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) approved in writing, writing by the other Party (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company such Party’s Disclosure Letter), the Company each Party, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to such Party’s Organizational Documents or, except for amendments that would both not materially restrict the operations of such Party’s businesses and not reasonably be expected to prevent, materially delay or materially impair the ability of such Party to consummate the Transactions, the Organizational Documents of any of such Party’s Subsidiaries, including, in the case of Parent, Parent Sub’s or LLC Sub’s Organizational Documents;
(ii) except for any such transactions among its direct or indirect wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with respect any other Person, or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets from any other Person (A) with a fair market value or purchase price in excess of $10,000,000 in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), in each case, including any amounts or value reasonably expected to SpinCo and be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or (B) that would reasonably be expected to prevent, materially delay or materially impair the SpinCo Subsidiaries (ability of such Party to consummate the Transactions, other than than, in the case of clause (A))) (w) acquisitions in the Ordinary Course of inventory or other parts and accessories necessary for the ongoing operation of the business of such Party and its Subsidiaries, (x) acquisitions in order to maintain and sustain such Party’s and its Subsidiaries’ rigs and equipment in the Ordinary Course, (y) acquisitions pursuant to Material Contracts as in effect on the date of this Agreement and (z) transactions among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or of any of its Subsidiaries (other than (A) amend Encumbrances that are required by or automatically effected by the Company Credit Agreements, which shall be released at or prior to the Closing or (B) the issuance of shares (x) by its certificate direct or indirect wholly owned Subsidiary to it or another of incorporation its direct or bylaws indirect wholly owned Subsidiaries, (y) in respect of equity-based awards outstanding as of the date of this Agreement, or comparable governing documents(z) granted in accordance with Section 7.1(b)(xvi) in each of clauses (y) and (z), in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other than amendments to any Permitted Encumbrances) over any material portion of such Party’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the governing documents Ordinary Course on any of its assets or any Subsidiary of its Subsidiaries, except for Encumbrances (A) that are required by or automatically effected by Contracts in place as of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)date hereof, (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of that do not materially detract from the Company which remains a wholly owned Subsidiary after consummation value of such transaction), assets or (C) that do not materially impair the operations of such Party or any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its direct or indirect wholly owned Subsidiaries or to or from Parent and any of its direct or indirect wholly owned Subsidiaries, as applicable, or in accordance with Section 7.1(b)(xvi)) in excess of $1,000,000 individually or $2,000,000 in the aggregate;
(vii) except to the extent expressly provided by, and consistent with, Section 7.1(b)(vii) of such Party’s Disclosure Letter, declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company modify in any material respect its dividend policy;
(viii) reclassify, split, combine, subdivide or redeem, purchase (2through such Party’s share repurchase program or otherwise) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toto (A) the capital stock or other equity interests of a direct or indirect wholly owned Subsidiary of such Party or (B) the acquisition of shares of Company Common Stock or Parent Common Stock, as applicable, tendered by Service Providers in connection with a cashless exercise of the Company Restricted Stock UnitsOption Awards or Parent Options, as applicable, outstanding as of the date of this Agreement or in order to pay Taxes in connection with the exercise or vesting of Company Deferred Stock Units Equity Awards or Company Performance Stock UnitsParent Equity Awards, in each case as applicable, outstanding as of the date of this Agreement or granted in accordance with past practice and with Section 7.1(b)(xvi), pursuant to the terms of the Company Stock Plans or Parent Stock Plans, as applicable, and the applicable award agreement, in effect on the date Ordinary Course;
(ix) except to the extent expressly provided by, and consistent with, Section 7.1(b)(ix) of such Party’s Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (A) not in excess of $100,000,000 in the aggregate during any consecutive 12 month period (other than capital expenditures within the thresholds set forth in Section 7.1(b)(ix) of such Party’s Disclosure Letter), (B) not in excess of $25,000,000 (net of insurance proceeds) in the aggregate that such Party reasonably determines are necessary to avoid a material business interruption or maintain the safety and integrity of any asset or property or (C) paid by any direct or indirect wholly owned Subsidiary to such Party or to any other direct or indirect wholly owned Subsidiary of such Party, in each case in response to any unanticipated and subsequently discovered events, occurrences or developments (provided, that such Party will use its reasonable best efforts to consult with the other Party prior to making or agreeing to any such capital expenditure);
(x) other than in connection with any transaction or potential transaction described in Section 7.1(b) of such Party’s Disclosure Letter, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement Agreement, adversely amend, modify or supplement in any material respect, or waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, any material right or interest pursuant to or in, any Material Contract other than (or as modified after A) expirations and renewals of any such Contract in the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate such Contract (other than transactions any Contract of the type contemplated by referenced in Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions5.17(a)(ii);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof), (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of non-exclusive licenses under Intellectual Property owned by the Company or any of its Subsidiaries, (C) increase the compensation, bonus Subsidiaries or pension, welfare or other benefits of any director, officer or employee of the Company Parent or any of its Subsidiaries, except as applicable, in each case, granted to customers in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationOrdinary Course, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (GC) forgive any loans to directors, officers agreement among such Party and its direct or employees of the Company indirect wholly owned Subsidiaries or any of its among such Party’s direct or indirect wholly owned Subsidiaries;
(ivxi) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than in the ordinary course of business consistent Ordinary Course or with past practice in a principal amount respect to amounts that are not material to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company such Party and its Subsidiaries, taken as a whole, than existing Indebtednesscancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries except debts or claims among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xii) settle or compromise, or offer or propose to settle or compromise, any material Proceeding, including before a Governmental Entity, except in accordance with a maturity date the parameters set forth in Section 7.1(b)(xii) of such Party’s Disclosure Letter; provided, that no more than 10 years after such settlement or compromise, or offer in respect thereof, may involve any injunctive or other non-monetary relief which, in either case, imposes any material restrictions on the date business operations of the Contract evidencing such IndebtednessParty and its Subsidiaries or Affiliates;
(xiii) amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(xiv) (A) make, change or revoke any material election with respect to Taxes or Tax matters, (B) except change any material Tax accounting method or period, (C) enter into any material closing agreement with respect to Taxes, (D) enter into any material Tax sharing, allocation or indemnification agreement or arrangement, (E) settle, compromise or otherwise finally resolve any material Tax claim, audit, assessment or dispute, (F) surrender any right to claim a refund of a material amount of Taxes, (G) change its tax residency, or (H) fail to file when due (taking into account any available extensions that do not result in the Bridge Facilityimposition of a penalty) any material Tax Return;
(xv) transfer, in replacement sell, lease, divest, cancel, abandon, allow to lapse or expire or otherwise dispose of, or permit or suffer to refinanceexist the creation of any Encumbrance upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for in connection with (A) sales of or non-exclusive licenses of the foregoing provided to customers in the Ordinary Course, (B) sales of obsolete assets, (C) sales, leases, non-exclusive licenses or other dispositions of any properties or assets (excluding capital stock not including services or sales of inventory in the Retained SubsidiariesOrdinary Course) with a fair market value not in excess of $50,000,000 individually if the transaction is not 10,000,000 in the ordinary course or $100,000,000 individually aggregate other than pursuant to Material Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with this Agreement and (D) sales among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xvi) except as required by the existing terms of any Benefit Plan as in effect on the date of this Agreement, as expressly permitted under this Agreement or as required by applicable Law, increase or change the compensation or benefits payable to any Service Provider other than in the Ordinary Course; provided, that, notwithstanding the foregoing, except as expressly disclosed in Section 7.1(b)(xvi) of such Party’s Disclosure Letter or required pursuant to a Company Benefit Plan or Parent Benefit Plan, as applicable, in effect as of the date of this Agreement, the Parties shall not: (A) grant any new long-term incentive or equity-based awards and or amend or modify the terms of any outstanding awards under any Company Stock PlansBenefit Plan or Parent Benefit Plan, as applicable, (B) Investment Preferred Stock (as defined in the Bridge Facility) grant any retention or transaction bonuses, (C) increase or change the compensation or benefits payable to any executive officer (other than changes in health and welfare benefits (other than severance plans) that are generally applicable to all salaried Service Providers in the Ordinary Course), (D) terminate, enter into, amend, modify or renew any material Benefit Plan, other than routine amendments to health and welfare plans (other than severance plans) that do not materially increase benefits or result in a material increase in administrative costs, or adopt any compensation or benefit plan, program, policy, agreement or arrangement that would be a material Benefit Plan if it were in existence as of the date hereof, (E) accelerate the vesting of any compensation for the benefit of any Service Provider, (F) increase or change the severance terms applicable to any Service Provider, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) other than as required by wholly owned Subsidiaries GAAP, change any assumptions required by GAAP used to calculate funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding rate in respect of any Benefit Plan or (I) terminate the employment of any executive officer (other than for cause) or hire any new executive officer (other than as a replacement hire receiving substantially similar terms of employment); provided, that, to the extent that a Party intends to hire an individual to replace an executive officer of such Party, such Party shall first consult in good faith with the other Party prior to, and with respect to, the hiring of such individual;
(xvii) recognize any labor union, works council, or other labor organization or employee representative as the representative of any of the employees of the Party or its Subsidiaries, or become a party to, establish, adopt, amend, commence negotiations for or terminate any collective bargaining agreement or other labor-related Contract with a labor union, works council, or other labor organization or employee representative;
(xviii) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security) or guarantee any such Indebtedness, except for (A) Indebtedness for borrowed money incurred in the Ordinary Course under the Company’s or Parent’s, as applicable, revolving credit facilities and other lines of credit (including equipment loans) existing as of the date of this Agreement, (B) guarantees by the Company or to any direct or indirect wholly owned Subsidiary of the Company of Indebtedness of the Company or any other direct or indirect wholly owned Subsidiary of the Company; provided that, for (C) guarantees by Parent or any direct or indirect wholly owned Subsidiary of Parent of Indebtedness of Parent or any other direct or indirect wholly owned Subsidiary of Parent, (D) Indebtedness incurred in connection with a refinancing or replacement of existing Indebtedness (but in all cases which refinancing or replacement shall not increase the avoidance aggregate amount of doubtIndebtedness, granting customary profit participation rights plus fees, expenses, premium and accrued and unpaid interest in respect of the Indebtedness being refinanced or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not replaced, permitted to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) outstanding thereunder and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any businesson customary commercial terms), whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(xE) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinIndebtedness
Appears in 4 contracts
Sources: Merger Agreement (Nextier Oilfield Solutions Inc.), Merger Agreement (Patterson Uti Energy Inc), Merger Agreement (Nextier Oilfield Solutions Inc.)
Interim Operations. (a) The 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 as that during the period from the date of this Agreement to itself 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 thatshall be conducted, from and after the execution books and records of this Agreement the Company and prior 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 First Effective Time 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;
(unless Parent b) the Company shall otherwise approve in writingnot, which approval and shall not be unreasonably withheldpermit any of its Subsidiaries to, conditioned (i) authorize for issuance, issue, deliver, sell or delayedagree or commit to issue, and 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; (1ii) 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 applicable Lawthis Agreement, (2B) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a5.01(b) of the Company Disclosure Letter)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 shallshall not, and shall cause each not permit any of its Subsidiaries to, use 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 reasonable best efforts capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to conduct the Retained Business 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 the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) bonuses expressly required by the Transaction Documents (including in connection with the Separation under existing employment agreements, bonus plans and the Distribution) other agreements and arrangements listed or (3) otherwise expressly disclosed described in Section 5.01(b5.01(e) of the Company Disclosure LetterSchedule 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 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 with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, as set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described forth in Section 5.01(b)(i5.01(i) of the Company Disclosure Letter)Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (Di) enter into any agreement with respect to the voting of its capital stockinto, or (E) purchasematerially amend, repurchase, redeem modify or otherwise acquire supplement any shares Contract outside the ordinary course of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance business consistent with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by under which the Company or any other wholly owned Subsidiary of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the CompanyCompany 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);
(iij) merge the Company shall not, and shall not permit any of its Subsidiaries to, authorize or consolidate with make any other Person, or restructure, reorganize or completely or partially liquidate capital expenditures (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on pursuant to commitments prior to the date hereof: (A) establish, adopt, amend hereof or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan planned capital expenditures in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (Bpractices disclosed in Section 5.01(j) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company Disclosure Schedule by category) or make any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare commitments with respect to capital expenditures or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except planned capital expenditures other than in the ordinary course of business consistent with past practice 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 (1) employees below the level of Executive Vice President and (2) employees at Taxes, file any amended Tax Return, enter into any closing agreement, settle or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative compromise any Tax claim, assessment or liability relating to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Eor 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 accelerate the vesting filing of any Tax Return or the payment of compensation or benefits under any Company Plan (including any equity-based awards)Tax, (F) change any actuarial if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other assumptions used to calculate funding obligations with respect to action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any Company Plan present or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees future Tax benefit of the Company or any of its Subsidiaries;
(ivp) incur 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 Indebtedness Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or issue modify any warrants or Contract with any Significant Customer, other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or than on terms substantially consistent with equivalent to, or more beneficial on balance to the Company and or any of its SubsidiariesSubsidiaries than, taken as a whole, than existing Indebtednessthe terms of such Contract prior to the making of such amendment or modification, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness(iii) not, (B) except with respect to the Bridge Facilityand shall cause its Subsidiaries not to, in replacement ofenter into, or to refinancematerially amend, existing Indebtedness on then prevailing market terms modify or on terms substantially consistent with supplement, any Lease or more beneficial to other Material Contract under which the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced costs or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to resulting from such Indebtedness 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
(and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (Gq) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any timenot, and (L) purchase money indebtedness and lease financing in the ordinary course shall not permit any of business consistent with past practice;
(v) with respect to the Retained Businessits Subsidiaries to, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make agree or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 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. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement, and except (unless i) as required or expressly permitted or contemplated by this Agreement, (ii) as required by applicable Law, (iii) as set forth in Section 5.1(c), (iv) as consented to in writing by Parent shall otherwise approve in writing, (which approval consent shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3v) otherwise expressly disclosed as set forth in Section 5.01(a) 5.1 of the Company Disclosure Letter), the Schedule:
(a) The Company shall, and shall cause each of its Subsidiaries toto (provided, with respect to non-Wholly Owned Subsidiaries, Company shall cause such Subsidiaries to the extent within its reasonable control), use its and their respective reasonable best efforts to (x) conduct the Retained Business its business in all material respects in the ordinary course of business consistent with past practicebusiness, and the Company shall, and shall cause each of its Subsidiaries to, solely (y) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, Entities and key customers, suppliers, distributors, licensors, creditors, lessors, employees (including any labor union, labor organization, works council or other similar organization) and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ their present officers, key employees and agents.
workforce (b) Without limiting the generality ofincluding any directors), and (z) maintain in furtherance offorce and enforce internal policies, the foregoing, the Company covenants procedures and agrees controls (as updated or amended from time to itself and its Subsidiaries that, from and after the date of this Agreement and prior time) designed to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by ensure compliance with applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
; provided that (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation no action or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company inaction by the Company or any other wholly owned Subsidiary of the Companyits Subsidiaries with respect to any matters specifically permitted by any portion of Section 5.1(b) shall be deemed a breach of this Section 5.1(a) unless such action or inaction would constitute a breach of such portion of Section 5.1(b);
; and (ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider failure of the Company or any of its SubsidiariesSubsidiaries to take any action prohibited by Section 5.1(b) shall in no circumstances be deemed a breach of this Section 5.1(a);
(b) The Company shall not, and shall cause its Wholly Owned Subsidiaries not to (C) increase the compensationprovided, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to non-Wholly Owned Subsidiaries, the Company shall instruct its directors and officers of such Subsidiary to use their reasonable best efforts to cause such Subsidiaries not to, the extent within their reasonable authority and control):
(1i) employees below the level amend its or their respective Organizational Documents;
(ii) adopt a plan of Executive Vice President and (2) employees at complete or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationpartial liquidation, bonus or pensiondissolution, welfare merger, restructuring, recapitalization, or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees reorganization of the Company or any of its Subsidiaries;
(iviii) incur acquire (including by acquisition of equity (including any Indebtedness debt securities convertible into equity) or issue assets) any warrants business, Person, equity interest in any Person, material properties or material assets, other rights to acquire any Indebtedness, except than (A) acquisitions of inventory or other goods or services in the ordinary course of business consistent with past practice or (B) solely in a principal amount the case of acquisitions of properties or assets (but not to exceed businesses, Persons or equity interests), acquisitions (x) for consideration not in excess of $400,000,000 5,000,000 in any individual transaction or series of related transactions or $15,000,000 in the aggregate at in any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years twelve (12)-month period after the date of this Agreement or (y) expressly contemplated by the Contract evidencing such IndebtednessCompany’s then-current capital budget described in or adopted in accordance with the terms of Section 5.1(b)(x);
(iv) transfer, (B) except with respect sell, lease, license, abandon, cancel, allow to the Bridge Facility, in replacement oflapse, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to otherwise dispose of any material assets of the Company and or any of its Subsidiaries, taken as or incur, permit or suffer to exist the creation of any material Encumbrance (other than a whole, than the Indebtedness being replaced or refinanced, and Permitted Encumbrance) upon any such assets (in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednesscase, excluding Intellectual Property Rights), except (CA) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into for inventory in the ordinary course of business consistent with past practice, (EB) commercial paper issued for obsolete assets in the ordinary course of business consistent with past practice practice, (C) for properties or assets with a fair market value not in a principal amount not to exceed excess of $250,000,000 5,000,000 individually, or $15,000,000 in the aggregate at in any time outstandingtwelve (12)-month period after the date of this Agreement, or (FD) Indebtednesspursuant to existing contractual rights or obligations in effect prior to the date of this Agreement and made available to Parent or its outside legal counsel prior to the date of this Agreement;
(v) transfer, the proceeds sell, lease, license, abandon, cancel, allow to lapse, or otherwise dispose of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations material Intellectual Property Rights of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, includingor incur, following permit or suffer to exist the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements creation of any material Encumbrance (other than a Permitted Encumbrance) upon, any such refinancing material Intellectual Property Rights, except (A) the lapse or replacement Indebtedness; provided that expiration of Registered Owned IPR at the aggregate principal amount end of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and natural term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (HB) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing non-exclusive licenses granted in the ordinary course of business consistent with past practice;
(vvi) issue, sell, dispose of, grant, transfer, encumber or otherwise enter into any Contract with respect to the Retained Businessvoting of, any equity interests of the Company or any of its Subsidiaries, convertible or exchangeable securities in respect of such equity interests, or any options, warrants or other than with respect rights of any kind to acquisitions of businessesacquire any such equity interests or such convertible or exchangeable securities in each case, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with any such transaction or action by a Wholly Owned Subsidiary of the repair Company to the Company or replacement between or among Wholly Owned Subsidiaries of facilitiesthe Company, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) issuances in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms, (C) grants of Company Equity Awards after the date of this Agreement as permitted by Section 5.1(b)(xx) without violation of this Agreement, or issuances in respect of such Company Equity Awards in accordance with their terms, (D) as permitted by Section 5.1(b)(ix), (E) pursuant to, or rights granted under, the Company Exchangeable Notes in effect as of the date of this Agreement or (F) pursuant to the ESPP in accordance with its terms as of the date of this Agreement and in compliance with Section 2.3(d);
(vii) (A) make any loans or advances to, or provide any guarantees on behalf of, any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries or between or among any of its Wholly Owned Subsidiaries) in excess of $2,000,000 individually, or $5,000,000 in the aggregate in any twelve (12)-month period after the date of this Agreement, other than pursuant to existing contractual obligations in effect as of the date of this Agreement and made available to Parent prior to the date of this Agreement, (B) cancel, modify or waive any Indebtedness or other amounts owed to the Company or any of its Subsidiaries having in each case a value in excess of $2,000,000 individually, or $5,000,000 in the aggregate in any twelve (12)-month period after the date of this Agreement, other than in the ordinary course of business consistent with past practice or Indebtedness or other amounts owed between or among the Company and any of its Subsidiaries in the ordinary course of business, or (C) incur any Indebtedness in excess of $10,000,000 individually or $25,000,000 in the aggregate not in excess any twelve (12)-month period after the date of 120% this Agreement, assume or guarantee the Indebtedness of any other Person (other than the Company or any of its Subsidiaries), or make any voluntary prepayment in respect of any Indebtedness in each case of this clause (C), other than (1) intercompany borrowings, (2) capital or finance leases entered into after the date hereof in the ordinary course of business or (3) under surety or performance bonds and letters of credit in existence as of the amounts reflected date hereof and made available to Parent prior to the date of this Agreement or entered into in the Company’s capital expenditure budget for each ordinary course of 2017business and without violation of Section 5.1(b)(xi);
(viii) declare, 2018 and 2019 set forth in Section 5.01(b)(v) aside or pay any dividend or other distribution, with respect to any securities of the Company Disclosure Letteror its Subsidiaries, other than dividends or other distribution paid by any Wholly Owned Subsidiary of the Company to the Company or to any other Wholly Owned Subsidiary of the Company;
(viix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or enter into any agreement to do any of the foregoing with respect to any equity interests of the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon Company or otherwise dispose any Subsidiary of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses the Company or ordinary course security interests securities convertible or exchangeable in connection with the production or financing respect of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensessuch equity interests, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) salesto satisfy applicable Tax withholding or exercise prices upon vesting, leases, licenses settlement or other dispositions exercise of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units Equity Award outstanding on the date of this Agreement in accordance with or granted after the existing terms date of such awards and the Company Stock Plansthis Agreement as permitted by Section 5.1(b)(xx), (B) Investment Preferred Stock (repurchases of shares of capital stock as defined in permitted under any Company Equity Award outstanding on the Bridge Facilitydate of this Agreement or granted after the date of this Agreement as permitted by Section 5.1(b)(xx) or (C) by wholly owned any such transactions solely involving Wholly Owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ixx) with respect to the Retained Business(A) authorize any new capital expenditures, in each case, other than (I) for capital expenditures made first authorized in accordance 2024, as contemplated by the Company’s existing capital budget for calendar year 2024 set forth in Section 5.1(b)(x)(A) of the Company Disclosure Schedule, (II) for capital expenditures first authorized in calendar year 2025, as contemplated by the Company’s capital budget for calendar year 2025 so long as such 2025 capital budget allocates capital expenditures substantially consistently with Section 5.01(b)(vthe Company’s 2024 capital budget, does not exceed the Company’s 2024 capital budget by more than five percent (5%) and is delivered to Parent by no later than February 1, 2025, or (III) any unbudgeted capital expenditures not to exceed $10,000,000 individually, or $25,000,000 in the aggregate in any twelve (12)-month period after the date of this Agreement, or (B) fail to make material capital expenditures expressly contemplated by the Company’s capital budget then in effect, except to the extent that the Company determines, in good faith after consultation with Parent, that delaying such capital expenditure or utilizing the amounts otherwise budgeted for such capital expenditure for other purposes is reasonably necessary under the circumstances existing at any time;
(xi) other than with respect to film and television production and programming or video game productionContracts relating to the activities described in any other clause of this Section 5.1(b), which is subject shall be governed by those respective clauses, enter into any Contract that would have been a Company Material Contract had it been entered into prior to Section 5.01(b)(xthe date of this Agreement (including by amending any Contract in a manner that would make such Contract a Company Material Contract), spend other than any Contract of the type described in Section 3.11(a)(ii) (solely with respect to Contracts with a Company Top Supplier), Section 3.11(a)(iii) (excluding any fixed-price Contracts), Section 3.11(a)(iv) (excluding any Material Company Bid for a fixed-price Contract), Section 3.11(a)(v) (excluding any Contract of a type required to be disclosed under any other clause of Section 3.11(a)), Section 3.11(a)(vi) (solely with respect to personal property) or commit Section 3.11(a)(xi) (solely with respect to spend customer or supplier Contracts containing customary indemnification obligations), in excess of (A) $25,000,000 if the transaction each case, that is not entered in the ordinary course of business consistent with past practice, in each case; provided that such Contract does not provide that the Transactions or any divestiture of any businesses, assets, properties, product lines, programs, projects and equity or other business interests of the Company and its Subsidiaries in connection with the Transactions would constitute a breach or default thereunder or permit the termination, acceleration, or creation of any right or obligation thereunder, or result in the creation of an Encumbrance on any of the rights, properties or assets of the Company or any of its Subsidiaries pursuant thereto or otherwise prevent, materially impair, or materially delay the ability of the Parties to consummate the Transactions;
(xii) assign, terminate, fail to renew, materially amend or waive any material rights under any Company Material Contract (other than non-renewals, non-material amendments or non-material waivers in the ordinary course of business);
(xiii) amend, terminate or allow to lapse any material Company License held by the Company or any of its Subsidiaries in a manner that materially and adversely impacts the ability of the Company and its Subsidiaries to conduct their respective businesses;
(xiv) except in the ordinary course of business consistent with past practice or for which replacement insurance is to be obtained on substantially equivalent terms, voluntarily terminate, cancel or modify any material third-party insurance policies;
(xv) other than any Transaction Litigation, which shall be governed exclusively by Section 5.14, settle or compromise any Proceeding (A) for an amount in excess of $50,000,000 in any event or (B) $50,000,000 individually 15,000,000 individually, or $200,000,000 30,000,000 in the aggregate in any yeartwelve (12)-month period after the date of this Agreement (net of any insurance proceeds or indemnity, contribution or similar payments received by the Company or any Wholly Owned Subsidiary of the Company in respect thereof, or amounts reserved for such matters in the consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2023 by the Company or such Wholly Owned Subsidiary), (B) which involves any criminal liability of the Company or any of its Wholly Owned Subsidiaries, (C) which results in any non-monetary obligation or binding precedential effect that is material to the Company and its Subsidiaries (taken as a whole) or would be binding on Parent’s or its Subsidiaries’ operations after the Closing or (D) that is a stockholder derivative Proceeding or a Proceeding commenced by a Governmental Entity;
(xvi) make any material changes with respect to any financial accounting policies or procedures, in each case case, except as required by GAAP or SEC rules or policies (or any interpretation thereof) or any regulatory accounting requirements (or any interpretation thereof) or any Governmental Entity (including the Financial Accounting Standards Board or any similar organization);
(xvii) write up, write down or write off the book value of any material assets of the Company or any of its Subsidiaries, except to acquire the extent required by GAAP as consistently applied by the Company since the Applicable Date;
(xviii) enter into any businessnew line of business that is not incidental to, whether by mergeror an iteration, consolidationextension, purchase natural evolution, expansion or advancement of, the lines of property business of the Company or assets, licenses or otherwise (valuing any non-cash consideration at of its fair market value Subsidiaries as of the date of this Agreement;
(xix) (A) make (other than in the agreement for such acquisitionordinary course of business); provided that neither the Company nor , change or revoke any of its Retained Subsidiaries shall material Tax election, (B) change any material Tax accounting period or method, (C) file any material amended Tax Return, (D) enter into any such transaction closing agreement with respect to material Taxes, (E) settle any material Tax claim, audit, assessment or dispute, (F) enter into any material Tax indemnification, sharing, allocation reimbursement or similar agreement, arrangement or understanding, (G) initiate any voluntary Tax disclosure or Tax amnesty or similar filings with any Taxing Authority with respect to U.S. state or local Taxes and other than in connection with the CAP Program, (H) fail to timely file any material Tax Returns (taking into account any extension of time within which to file) or pay any Tax that wouldbecomes due and payable (other than Taxes that are being contested in good faith in appropriate proceedings and for which appropriate reserves have been established to the extent required by GAAP), or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions(I) surrender any right to claim a material Tax refund;
(xxx) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date hereof, any Company Labor Agreement (as may be amended pursuant to this Agreement), or as otherwise required by applicable Law, (A) increase the compensation or consulting fees, bonus, pension, welfare, fringe or other than capital expenditures made benefits, severance or termination pay of any Company Employee, except for (1) increases in accordance annual base salary or wage rate in the ordinary course of business consistent with Section 5.01(b)(vpast practice that do not exceed five percent (5%) and other than purchases and licenses of film and television and production programming (includinin the aggregate or
Appears in 3 contracts
Sources: Merger Agreement (Boeing Co), Merger Agreement (Spirit AeroSystems Holdings, Inc.), Merger Agreement (Boeing Co)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from From and after the execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and prior abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in Section 7.1(a) of the First Effective Time Company Disclosure Schedule or (unless iii) as Parent shall otherwise approve consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letterconditioned), the Company (A) shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve conduct their respective businesses in the Retained Business’ organization intact Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain the Retained Business’ all existing relations relationships and goodwill with Governmental Entities, key customers, suppliers, distributors, licensors, creditors, lessors, employees suppliers and business associates and others other persons having material business dealings relationships with the Retained Business Company and its Subsidiaries and (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersy) and keep available the services of the officers and key employees of the Company and its Subsidiaries’ present employees , and agents.
(bC) Without without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants shall not, and agrees as to itself and shall cause its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo Subsidiaries voting of or transfer any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company that would not preventto the Company or another Wholly Owned Subsidiary of the Company, delay (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or impair (3) pursuant to the Initial Merger ESPP in accordance with its terms and subject to Section 4.3(g));
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other Transactionsthan between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business);
(ix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Shares;
(x) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock redeem, purchase or otherwise acquire (except for or offer to do any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transactionforegoing), (C) declaredirectly or indirectly, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, other equity interests or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (or other equity interests, other than (1A) pursuant the withholding of Common Shares to satisfy the forfeiture of, payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock UnitsEquity Awards outstanding as of the date of this Agreement, in each case case, in accordance with past practice and with their terms and, as applicable, the terms of the Company Stock Plans as in effect on as of the date Capitalization Time and (B) pursuant to an exercise of this Agreement (or as modified after the date of this Agreement Capped Call Transactions in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)their terms;
(iixi) merge incur or consolidate with assume any other Personindebtedness for borrowed money, guarantee any indebtedness for borrowed money or restructure, reorganize enter into a “keep well” or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President similar arrangement in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to indebtedness for borrowed money except for any such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount indebtedness not to exceed $400,000,000 2.5 million individually or $5 million in the aggregate at aggregate;
(xii) incur, make or authorize any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement payment of, or to refinanceaccrual or commitment for, existing Indebtedness on then prevailing market terms capital expenditures, or on terms substantially consistent with any obligations or more beneficial to the Company and its Subsidiaries, taken liabilities in connection therewith except as a whole, than the Indebtedness being replaced contemplated by or refinancedreasonably related to, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided107.5% of the aggregate amounts set forth in, furtherthe Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiii) enter into, that the Separation Agreement shall provide that SpinCo shall assume the obligations of terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the Ordinary Course of Business with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided Contract that the involve aggregate principal amount annual payments of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii300,000);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Benefitfocus, Inc.), Merger Agreement (Benefitfocus, Inc.), Merger Agreement (Benefitfocus, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Wax Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Wax Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Wax Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Holdco, Parent and its their Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinincluding s
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Fox Corp), Agreement and Plan of Merger (Walt Disney Co/), Agreement and Plan of Merger (Twenty-First Century Fox, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except Except as (1x) required by applicable Law, (2y) otherwise expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) this Agreement or (3z) otherwise expressly disclosed set forth in Section 5.01(a) 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business their business in the ordinary course of business consistent with past practicepractice and in compliance with all applicable Laws and, and to the Company extent consistent therewith, it shall, and shall cause each of its Subsidiaries toSubsidiaries, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially their respective reasonable best efforts to preserve the Retained Business’ organization their material business organizations intact and maintain the Retained Business’ in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (unless Parent shall A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distributionconditioned) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall not permit any of will cause its Subsidiaries not to:
(i) except amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with respect any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to SpinCo and any Lien (whether through the SpinCo issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than in the case of clause (A)), (A) amend its certificate the issuance of incorporation or bylaws Ordinary Shares upon the vesting of Company RSUs (or comparable governing documentsand dividend equivalents thereon, if applicable) (other than amendments outstanding prior to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)date hereof, (B) splitthe issuance of Ordinary Shares pursuant to the Company ESPP, combine, subdivide or reclassify its outstanding shares of capital stock (except for any but only with respect to elections made prior to the date hereof and only in accordance with such transaction by a wholly owned subsidiary Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company which remains a wholly owned Subsidiary after consummation shall not allow the commencement of such transactionany new offering periods under the Company ESPP), (C) declarein connection with the Comcast Warrants or Charter Warrants (including exercise thereof), set aside each as in effect as of the date hereof or pay any dividend (D) the issuance or distribution payable in cash, transfer of common stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to another customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to any other direct or indirect wholly owned Subsidiary in the Company ordinary course of business consistent with past practice) or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stockstock or other equity interests;
(vii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock stock, Company Securities or any securities convertible or exchangeable into or exercisable for any shares of its capital stock Other Subsidiary Securities (other than (1) pursuant the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to the forfeiture of, or withholding of pay Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and connection with the terms vesting of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the CompanyRSUs);
(iiviii) merge incur any Indebtedness or consolidate guarantee such Indebtedness of another Person (except with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions respect to obligations of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not preventhave any material Tax consequences), materially delay or materially impair issue or sell any debt securities or warrants or other rights to acquire any debt security of the Transactions)Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(iiiix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except as expressly required by any Company Plan as in effect on the date hereof: for (A) establishexpenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, adoptwhether caused by war, amend terrorism, weather events, public health events, outages, operational incidents or terminate otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company Plan or amend the terms any of its Subsidiaries other than settlements or compromises of any outstanding equity-based awards litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any such action taken material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for purposes a material amount of replacingTax;
(xiii) transfer, renewing sell, lease, license, mortgage, pledge or extending otherwise encumber or subject to a broadly applicable material Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company Plan or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) grant or provide increase in any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase manner the compensation, bonus or pensionbenefits of, welfare or other benefits of make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, officer consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice with respect to (1) employees below or as is not material in the level of Executive Vice President aggregate and (2) in the case of employees at or above who are executive officers of the level of Executive Vice President Company, increases in respect of base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeare consistent with past practice, (DC) increase except as required by Law or as required by agreements, plans, programs or arrangements in effect on the severance date hereof, establish, adopt, terminate or termination payments amend any Benefit Plan (other than routine changes to welfare plans or benefits payable to any director, officer, employee the Pension Plan made in the ordinary course of business consistent with past practice) or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of any compensation or benefits under equity for the benefit of any Company Person or funding of any Benefit Plan (including any equity-based awardsexcept (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (FD) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP or (GE) forgive except as required by Law, establish, adopt, enter into or amend any loans to collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees of the Company or any of its Subsidiariestheir beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(ivxv) incur grant a license of any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly material Intellectual Property owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of by the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(vxvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with respect any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Retained BusinessCompany or any Subsidiary thereof in excess of $120,000, other than with respect the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to acquisitions of businesses, which is subject or give rise to Section 5.01(b)(ix), and any rights (other than with respect notice) to film and television production and programming (including sports rights) with third such other party or parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or replacement announce the planning of facilitiessuch a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, properties in any material respect, the operations of the Company or assets destroyed any of its Subsidiaries;
(a) other than new Contracts with customers or damaged due suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) this Agreement or (Bb) other than in the ordinary course of business consistent with past practice and or expirations of any such Contract in the aggregate not ordinary course of business consistent with past practice in excess accordance with the terms of 120% such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the amounts reflected Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s capital expenditure budget for current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of 2017the Company and Arris US Holdings Inc. is not, 2018 and 2019 set forth has not been within the five (5) year period described in Section 5.01(b)(v897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter;
Letter (vi) with respect as such schedule may be reasonably amended prior to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained SubsidiariesClosing Date), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property certifying that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of each such Subsidiary does not own any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of U.S. real property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includini
Appears in 3 contracts
Sources: Bid Conduct Agreement, Bid Conduct Agreement (ARRIS International PLC), Bid Conduct Agreement (CommScope Holding Company, Inc.)
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries thatexpressly contemplated, from and after the execution of required or permitted by this Agreement and prior to the First Effective Time Agreement, (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or conditioned), (iv) as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in set forth on Section 5.01(a) 6.01 of the Company Disclosure LetterSchedule, or (v) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (v), to the extent permitted under applicable Law and practicable under the circumstances, the Company shallshall provide prior notice to and consult in good faith with Parent prior to taking such action), from the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article 8 and the Effective Time, the Company will, and shall will cause each of its Subsidiaries to, use its and their commercially reasonable best efforts to (A) conduct the Retained Business their businesses in the ordinary course of business consistent in all material respects and (B) preserve intact their business organizations and relationships with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees distributors and business associates and others having other Persons with which it has material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agentsdealings.
(b) Without limiting the generality ofExcept (A) as expressly contemplated, and in furtherance ofrequired or permitted by this Agreement, the foregoing, the Company covenants and agrees (B) as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2C) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld, delayed or conditioned), (D) or (3) otherwise expressly disclosed in as set forth on Section 5.01(b) 6.01 of the Company Disclosure LetterSchedule, or (E) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (E), to the extent permitted under applicable Law and practicable under the circumstances, the Company shall not provide prior notice to and shall not permit any consult in good faith with Parent prior to taking such action), from the date of this Agreement until earlier to occur of the termination of this Agreement pursuant to Article 8 and the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than x) adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws of the Company or (or comparable governing documentsy) (other than amendments to adopt any change in the governing organizational documents of any Subsidiary of the Company’s Subsidiaries, in each case whether by merger consolidation or otherwise;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize, recapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreement or arrangement imposing any material restrictions on the assets, operations or business of the Company that would not preventor any of its Subsidiaries;
(iii) issue, delay sell, pledge, dispose of or impair encumber, or authorize the Initial Merger issuance, sale, pledge, disposition or the other Transactions)encumbrance of, (B) split, combine, subdivide or reclassify its outstanding any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (except for A) any such transaction by a among the Company and its Subsidiaries or among the Company’s wholly owned subsidiary Subsidiaries or (B) any issuance of Shares pursuant to exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms;
(iv) make any loans, advances or capital contributions to or investments in any Person (other than to the Company which remains a or any of its wholly owned Subsidiary after consummation of such transactionSubsidiaries), ;
(Cv) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise with respect to any combination thereof) in respect of any shares of its capital stock (stock, except for (1) any dividends or other distributions paid by a direct or indirect any wholly owned Subsidiary of the Company to another direct the Company or indirect to any other wholly owned Subsidiary of the Company Company;
(vi) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company such transaction by the Company or any other a wholly owned Subsidiary of the Company, (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Equity Awards to the extent required by such Company Equity Awards, or (C) payment of the exercise price in respect of Company Options, in the case of clauses (B) and (C), outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(iivii) merge create, incur, assume or consolidate with guarantee any Indebtedness for borrowed money or issue any debt securities or guarantees of the same or any other PersonIndebtedness, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: for (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowings in the ordinary course of business consistent with past practice that does not materially increase under the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofExisting Credit Agreement, (B) grant guarantees or provide credit support provided by the Company or any transaction or retention bonuses to any director, officer, employee or other service provider of its Subsidiaries of the obligations of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except Subsidiaries in the ordinary course of business consistent to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except clause (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement ofthis Section 6.01(b)(vii), or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany any Indebtedness solely among the Company and its wholly wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(viii) other than in accordance with the Company’s capital expenditure budget made available to Parent, (D) (1) incur or commit to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security any capital expenditure or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programsexpenditures, in each case issuedany period, made or entered into except capital expenditures in an amount not exceeding in the aggregate 120% of the amount included in such budget;
(ix) other than in the ordinary course of business consistent with past practice, (EA) commercial paper issued enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement; provided, that no Contract of the type described in Section 5.01(k)(i)(N) or Section 5.01(k)(i)(O) shall be entered into without the ordinary course prior written consent of business consistent with past practice Parent, or (B) amend, modify or waive in any material respect or terminate any Material Contract in a principal manner adverse to the Company (other than expirations of any such Contract in accordance with its terms);
(x) make any material changes with respect to financial accounting policies or procedures, except as required by Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) settle any Action for an amount not to exceed in excess of $250,000,000 1 million individually or $5 million in the aggregate at other than (A) any time outstandingsettlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered by insurance coverage or retention amounts maintained by the Company or any of its Subsidiaries and (B) settlements or compromises of any Action for an amount not materially in excess of the amount, if any, reflected or specifically reserved in the balance sheet (For the notes thereto) Indebtednessof the Company included in the Company Reports (with materiality measured relative to the amount so reflected or reserved, if any); provided that, in the case of each of the foregoing clauses (A) and (B), the proceeds settlement or compromise of which will be used to finance all such Action does not (x) impose any material restriction on the business or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations operations of the Company or any of its Subsidiaries with respect (or Parent or any of its Subsidiaries after the Closing) and (y) include any non-monetary or injunctive relief, or the admission of wrongdoing, by the Company or any of its Subsidiaries or any of their respective officers or directors;
(xii) sell, assign, lease, license, sublicense or otherwise transfer or dispose of, abandon or permit to such Indebtedness lapse, fail to take any action necessary to maintain, enforce or protect, or create or incur any Lien (other than Permitted Liens), on any material assets or property (including any Company Intellectual Property and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect Licensed Intellectual Property) except (A) pursuant to existing contracts or commitments (or refinancings thereof), (GB) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (BC) in the ordinary course of business consistent with past practice and in no event in an amount exceeding $1 million individually or $5 million in the aggregate not aggregate;
(xiii) except for such actions required by the terms of Benefit Plans as in excess effect on the date hereof: (A) increase the compensation or other benefits payable or provided to any Service Providers other than increases in base salary in the ordinary course of 120% business for Service Providers with base salary of less than $300,000; (B) increase or accelerate or commit to accelerate the funding, payment or vesting of compensation or benefits provided under any Benefit Plan, (C) grant or announce any cash, equity or equity-based, change of control, severance or retention award to any Service Provider; (D) establish, adopt, enter into terminate or amend (x) in any respect any Collective Bargaining Agreement or (y) in any material respect, any Benefit Plan (or any plan, program, agreement or arrangement that would be a Benefit Plan if in effect on the date hereof); (E) recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative of any employees of the amounts reflected Company or its Subsidiaries or (F) hire or terminate the employment of any employee of the Company whose annualized base compensation exceeds $300,000, other than (x) hiring to replace departed employees or (y) terminations for “cause” (as determined in the Company’s capital expenditure budget for each of 2017reasonable discretion); provided, 2018 however, that the foregoing clauses (A), (B), (C), and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (viD) shall not restrict the Company or its Subsidiaries from making available to newly hired employees or independent contractors (in the ordinary course of business), plans, agreements, benefits and compensation arrangements (including cash incentive grants, but excluding any equity-related incentives)) that are on substantially the same terms and conditions and have a value that is consistent with the past practice of making compensation and benefits available to newly hired employees or independent contractors in similar positions or for employees or independent contractors with similar levels of responsibility;
(xiv) acquire any business, assets or capital stock of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than the acquisition of assets from vendors or suppliers of the Company or any of its Subsidiaries in the ordinary course of business;
(xv) cancel, modify, amend or waive or terminate the Existing Credit Agreement, except for modifications or amendments to the Existing Credit Agreement that would not (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with impair the production or financing ability of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual PropertyParent to obtain the Debt Financing on the Closing Date, (B) reduce the granting ability of the Company and its Subsidiaries to incur secured debt for borrowed money in the form of the Debt Financing on the Closing Date in any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per licensematerial respect, (C) sales reduce the ability of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect Subsidiaries to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company make Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock Payments (as defined in the Bridge FacilityExisting Credit Agreement) on the Closing Date in any material respect, (D) impair the ability of the Merger to be consummated in compliance with any “merger” or “fundamental changes” covenant in the Existing Credit Agreement or (CE) by wholly owned Subsidiaries amend or modify the stated final maturity date of any indebtedness for borrowed money thereunder to the Company or to any other wholly owned Subsidiary be sooner than such maturity date as in effect as of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable fordate hereof, or any options, warrants amend or other rights to acquire, modify any such shares for purposes agreement to reduce the amount of this Section 5.01(b)(viii)the total lending commitments thereunder; implement or announce any permanent plant closings or permanent facility shutdown that would implicate the WARN Act;
(ixxvi) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in of business (A) make, change or revoke any event or material Tax election; (B) $50,000,000 individually change any material Tax accounting period or $200,000,000 in the aggregate in method of Tax accounting, (C) file any yearmaterial amended Tax Return, in each case (D) settle or compromise any material claim related to acquire any businessTaxes, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall E) enter into any such transaction that wouldmaterial closing agreement or (F) surrender any right to claim a material Tax refund, offset or would reasonably be expected toother reduction in liability; or
(xvii) agree, prevent, materially delay authorize or materially impair the consummation commit to do any of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Convey Health Solutions Holdings, Inc.), Merger Agreement (Convey Health Solutions Holdings, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing (which such approval shall not be unreasonably withheld, conditioned or delayed), and except (i) as otherwise expressly contemplated by this Agreement), (1ii) as required by applicable Law, Laws and (2iii) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter), the business of the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct taken as a whole (the Retained Business “Business”) shall be conducted in the ordinary and usual course of business consistent with past practicepractice in all material respects and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their collective business organizations intact, maintain their material Licenses that are integral to the Retained Business, subject operation of the Business as currently conducted and keep available the services of its and its Subsidiaries’ present employees and agents who are integral to compliance with the specific matters set forth below, operation of the Businesses as currently conducted and use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ maintain, in all material respects, existing relations and goodwill with Governmental Entities, customers, suppliers, distributorsdistributors and employees whom, licensorsin the reasonable discretion of the Company, creditors, lessors, employees and business associates and others having material business dealings are currently engaged in relationships with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available Company and/or its Subsidiaries that are integral to the services operation of the Business as currently conducted; provided, however, that any action which the Company and and/or its Subsidiaries’ present employees and agentsSubsidiaries is permitted to take pursuant to Section 6.1(b) in accordance with the terms thereof shall not be deemed to be a breach of this Section 6.1(a).
(b) Without limiting In furtherance of the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatforegoing Section 6.1(a), from and after the date of hereof until the Effective Time, except (A) as otherwise expressly contemplated by this Agreement and prior to the First Effective Time Agreement, (unless B) as required by applicable Law, (C) as Parent shall otherwise may approve in writing, writing (which such approval shall not be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b6.1(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (by-laws or comparable governing documents) (similar organizational documents other than amendments any administrative or ministerial changes made to the governing any certificate of incorporation or by-laws or similar organizational documents of any Subsidiary of the Company that which is not otherwise restricted under any other clause of this Section 6.1(b);
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or liquidate all or a material part of its assets;
(iii) acquire assets outside of the ordinary course of business from any other Person, other than (i) acquisitions pursuant to Contracts in effect as of the date hereof and related to matters described in Section 6.1(a)(iii) of the Company Disclosure Letter and (ii) acquisitions pursuant to which the total value or purchase price paid or payable by the Company and its Subsidiaries would not preventexceed $2,000,000, delay individually or impair in the Initial Merger aggregate;
(iv) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, or authorize the other Transactions)issuance, (B) splitdelivery, combinesale, subdivide pledge, disposition, grant, transfer, or reclassify its outstanding encumbrance of, any shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains or any of its Subsidiaries (other than the issuance of shares by a wholly wholly-owned Subsidiary after consummation of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such transactioncapital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except for the issuance of Shares in respect of Company Options, Company RSUs and/or the Company Warrant outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement;
(v) make any loans or advances to any Person (other than advances made in the ordinary course of business consistent with past practice to employees of the Company and its Subsidiaries for reimbursement of expenses, including relocation expenses, in amounts not to exceed $250,000 individually or $2,000,000 in the aggregate for all such advances) or any capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company), ;
(Cvi) (A) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary), (B) purchase, redeem or otherwise acquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other securities, except for (i) any split, combination or reclassification of capital stock of any wholly-owned Subsidiary of the Company, or any issuance of any securities of a wholly-owned Subsidiary of the Company to the Company or another direct or indirect wholly wholly-owned Subsidiary of the Company Company, (ii) purchases, redemptions or to other acquisitions of capital stock or other securities (y) permitted by the terms of the Stock Plans or (z) permitted by the terms of any plans, arrangements or Contracts existing on the date of this Agreement (or entered into after the date of this Agreement in compliance with this Section 6.1) between the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) any of its Subsidiaries and any director or employee of the Company Disclosure Letter)or any of its Subsidiaries, or (Diii) the issuance of Shares in respect of Company Options, Company RSUs and/or the Company Warrant outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement, or (C) enter into any agreement with respect to the voting of its capital stock;
(vii) incur any indebtedness for borrowed money, assume, guarantee, endorse or otherwise become responsible for any indebtedness of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, enter into any “keep well” or other Contract to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing that, individually or in the aggregate, exceeds $5,000,000;
(viii) make or authorize any payment of, or accrual or commitment for, any capital expenditure in excess of $4,000,000 in the aggregate;
(Eix) purchase, repurchase, redeem or otherwise acquire enter into (A) any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock Contract that would have been a Material Contract (other than any Contract described in clause (1D) pursuant of Section 5.1(l)(i)) had it been entered into prior to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2B) purchasesany Company Intellectual Property Agreement, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions (in the case of the type contemplated by Section 5.01(b)(viiclause (B) or Section 5.01(b)(ixonly) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase practice;
(x) make any changes with respect to accounting policies or procedures, except to the cost extent required by GAAP or SEC rules and regulations;
(xi) settle or compromise, or offer or propose to settle or compromise, any actions, suits, claims, hearings, arbitrations, litigations, investigations or other proceedings before a Governmental Entity (each a “Proceeding”) if the foregoing would (A) require the payment of monetary damages by the Company or any of its Subsidiaries after the date hereof of any amount in excess of $1,000,000 per Proceeding or $5,000,000, in the aggregate, for all such Proceedings, net of applicable reserves as set forth in the consolidated balance sheet of the Company Plan as of September 30, 2012 and any applicable insurance coverage, or benefits provided under such Company Plan based (B) involve any injunctive or other non-monetary relief which, in either case, imposes material restrictions on the cost on business operations of the date hereofCompany and its Subsidiaries, taken as a whole;
(xii) (A) make, change or rescind any material Tax election, (B) grant or provide file any transaction or retention bonuses to any director, officer, employee or other service provider material amended Tax Return of the Company or any of its the Subsidiaries, (C) increase adopt or change any material method or period of Tax accounting, (D) settle or compromise any material Tax claim, (E) surrender any material claim for a refund of Taxes, (F) enter into any closing agreement relating to Taxes, (G) file any material Tax Return that is inconsistent with past practice, or (H) consent to any extension or waiver of the compensationlimitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business);
(xiii) transfer, bonus sell, lease, assign, license, mortgage, subject to Liens (other than Permitted Liens), pledge, surrender, encumber, divest, cancel, abandon or pensionallow to lapse or expire or otherwise dispose of any assets (including Intellectual Property), welfare licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries that would, individually or in the aggregate, exceed $1,000,000, other than in the ordinary course of business consistent with past practice;
(xiv) except as required pursuant to existing written, binding agreements in effect prior to the date hereof and set forth in Section 5.1(j) of the Company Disclosure Letter, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits of to any director, officer or employee of the Company or any of its Subsidiaries, except (B) increase in any manner the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or bonus, pension, welfare welfare, fringe, severance or other benefits prior to such changeof, (D) increase the severance pay any bonus to, or termination payments or benefits payable make any new equity awards to any current or former director, officer, employee or other service provider consultant of the Company or any of its Subsidiaries, (EC) become a party to, establish, adopt, commence participation in, amend or terminate any stock option plan or other stock-based compensation plan, or any compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any current or former directors, officers, employees or consultants of the Company or its Subsidiaries (or newly hired employees) or amend the terms of any outstanding equity-based awards, (D) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan Benefit Plan, to the extent not already provided in any such Benefit Plan, (including E) enter into any equity-based awards)collective bargaining agreement or other agreement with a labor union, works council or similar organization, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (G) terminate without cause the employment of any executive officer of the Company, or (H) forgive any loans or issue any loans to directors, officers or employees of the Company or any of its Subsidiaries;
Subsidiaries (iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than travel and relocation expense advances in immaterial amounts made in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to employees of the Company and its Subsidiaries);
(xv) implement or announce any plant closing, taken as a wholematerial reduction in labor force or other layoffs of employees that would be expected to incur liability under the WARN Act (or any similar state, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (Blocal or foreign Law) except with respect to the Bridge FacilityCompany or any of its Subsidiaries;
(xvi) enter into any joint venture through a general partnership, in replacement oflimited partnership, limited liability company or to refinancesimilar strategic alliance vehicle or other similar arrangement, existing Indebtedness on then prevailing market terms with any Person (for purposes of clarity, the foregoing does not include any advertising, content, affiliate, marketing or on terms substantially consistent with or more beneficial to supplier agreements entered into by the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent business, whether or not referred to colloquially as partnerships, strategic relationships or otherwise described with past practice, similar phrases);
(Exvii) commercial paper issued in enter into any Contract or transaction between the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all Company or any portion of its Subsidiaries, on the Dividend one hand, and any (and fees and expenses in connection therewithi) officer or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations director of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (Gii) Indebtedness under the Bridge Facility, refinancings Affiliate or replacements thereof and of commitments thereunder, and any refinancings or replacements family member of any such refinancing officer or replacement Indebtedness; provided that director or (iii) record or beneficial owner of five percent (5%) or more of the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 voting securities of the Company Disclosure Letter; providedor any Affiliate or family member of such record or beneficial owner, further, that on the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereofother hand, in each case, so long as case of a type that would be required to be disclosed under Item 404 of Regulation S-K under the aggregate principal amount thereof does not exceed $2,500,000,000, Securities Act (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) grants of Company Options made to new hires in connection a manner and amount generally consistent with the repair or replacement of facilitiespast practice, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or and (B) in the ordinary course grants of business consistent with past practice and in the aggregate not in excess Company RSUs made to members of 120% of the amounts reflected in the Company’s capital expenditure budget for each board of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;directors on their respective appointment anniversary dates); or
(vixviii) with respect to the Retained Businessagree, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (KAYAK Software Corp), Merger Agreement (Priceline Com Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use from and after the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly required by this Agreement or as required by a Governmental Entity or applicable Law and any Material Contract in effect prior to the date of this Agreement), conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course Ordinary Course of business Business and, to the extent consistent with past practicetherewith, shall use and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable efforts to preserve the Retained Businessmaintain its and its Subsidiaries’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees, agents and business associates; provided that, during any period of full or partial suspension of operations in response to COVID-19 or any COVID-19 Measures, the Company or any of its Subsidiaries may, in response to COVID-19 or any COVID-19 Measures, take such actions as are reasonably necessary (x) to protect the health and safety of the Company’s or its Subsidiaries’ employees and business associates and others other individuals having material business dealings with the Retained Business Company or any of its Subsidiaries or (including material content providersy) to respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersin each case of clause (x) and keep available (y), subject to reasonable prior consultation with Parent to the services of the Company and its Subsidiaries’ present employees and agents.
(b) extent reasonably practicable. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatforegoing sentence, from and after the date of this Agreement and prior to until the First earlier of the Effective Time (unless Parent shall otherwise approve in writingand the termination of this Agreement pursuant to Article IX, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) otherwise expressly required by this Agreement, as required by a Governmental Entity or applicable Law, as approved in writing by Parent (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distributionsuch approval not to be unreasonably conditioned, withheld or delayed) or (3) otherwise expressly disclosed set forth in the corresponding subsection of Section 5.01(b7.1(a) of the Company Disclosure Letter)Schedule, the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(iii) acquire, directly or indirectly by merger, consolidation, acquisition of stock or assets or otherwise, any business, Person, properties or assets, other than acquisitions of inventory or other goods in the Ordinary Course of Business;
(iv) transfer, sell, license, lease, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses of the Company or any of its Subsidiaries, including capital stock or other equity interests of any of its Subsidiaries, except in connection with (A) sales of obsolete assets, (B) nonexclusive licenses granted by the Company or its Subsidiaries with respect to SpinCo Intellectual Property Rights in the Ordinary Course of Business and (C) sales of inventory or other goods in the SpinCo Subsidiaries Ordinary Course of Business;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or otherwise enter into any Contract or other agreement, understanding or arrangement (whether oral or written) with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than in the case of clause (A)), (A) amend its certificate proxies or voting agreements solicited by or on behalf of incorporation the Company in connection with the Company’s annual meeting of stockholders or bylaws (B) the issuance of shares of such capital stock, other equity securities or comparable governing documentsconvertible or exchangeable securities (1) (other than amendments to the governing documents of any by a Wholly Owned Subsidiary of the Company that would not preventto the Company or another Wholly Owned Subsidiary of the Company or (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, delay as applicable, the Stock Plans in effect on the Capitalization Date);
(vi) make any loans, advances, guarantees or impair capital contributions to or investments in any Person (other than to or from the Initial Merger Company and any of its Wholly Owned Subsidiaries) and for loans or advances made to directors, officers and other employees of the Company and its Subsidiaries (x) for business-related travel, other business-related expenses, in each case, in the Ordinary Course of Business or (y) pursuant to the indemnification and advancement rights of such Persons in effect as of the date of this Agreement under any agreement between or among such Person and the Company or any Subsidiary thereof, correct and complete copies of which have been made available to Parent, or the Organizational Documents of the Company or any Subsidiary thereof;
(vii) declare, set aside, make or pay any dividend or other Transactionsdistribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company and for regular quarterly dividends declared and paid at such times and in such amounts as is consistent with historical practice over the twelve-month period prior to the date of this Agreement (Bbut under no circumstances in an amount that exceeds $0.175 per Share per calendar quarter);
(viii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, other equity interests or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests (other than (1) pursuant including with respect to the forfeiture Company, for the avoidance of doubt, Shares);
(ix) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced;
(x) make or authorize any payment of, or withholding accrual or commitment for, capital expenditures in excess of Taxes with respect to$250,000 in the aggregate, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, except to the extent set forth in each case the Company’s capital budget set forth in accordance with past practice and with the terms Section 7.1(a)(x) of the Company Stock Plans as Disclosure Schedule;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers, suppliers, agents, distributors or sales representatives (including “authorized dealers”) entered into in effect on the date Ordinary Course of Business and, for the avoidance of doubt, any Contracts entered into in connection with an action expressly permitted by any of the Subsections of this Agreement Section 7.1(a), including any material amendment, modification or supplement to an existing Contract in compliance with Section 7.1(a)(xii);
(xii) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(ix), Section 7.1(a)(vi) and Section 7.12, terminate, materially amend, materially waive, or as modified after assign, convey, encumber or otherwise transfer, in whole or in part, any material rights or interest pursuant to or in, any Material Contract, other than expirations of any such Contract in the date Ordinary Course of this Agreement Business and in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company such Contract with no further action by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect for any ministerial actions, or non-exclusive licenses, covenants not to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensations▇▇, bonus or pensionreleases, welfare waivers or other benefits prior rights under Intellectual Property Rights owned or purported to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of be owned by the Company or any of its Subsidiaries, in each case, that are granted in the Ordinary Course of Business;
(Exiii) cancel, modify or waive any debts or similar claims held by the Company or any of its Subsidiaries having in each case a value in excess of $100 thousand in the aggregate;
(xiv) amend any License contemplated by Section 5.5(d) in any material respect, or allow any such License to lapse, expire or terminate (except where the lapse, expiration or termination of any such License is with respect to a License that has become obsolete, redundant or no longer required by applicable Law or for the operation of the Company’s business);
(xv) for the avoidance of doubt, except as expressly provided for by Section 7.11, amend, modify, terminate, cancel or let lapse a material Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by the Company or one or more of its Subsidiaries or replacement policies underwritten by reputable insurance carriers are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(xvi) other than with respect to Transaction Litigation, any Proceeding in connection with, arising out of or otherwise related to a demand for appraisal under Section 262 of the DGCL or any Tax claim, audit, assessment or dispute, which shall be governed by Section 7.16, Section 4.2(f) and Section 7.1(a)(xviii), respectively, settle or compromise any Proceeding for an amount in excess of $100 thousand in the aggregate during any calendar year, or which would reasonably be expected to (A) have a materially negative impact on the operations and reputation of the Company and its Subsidiaries or (B) involve any criminal liability or any admission of material wrongdoing or any material wrongful conduct by the Company or any of its Subsidiaries;
(xvii) make any changes with respect to accounting policies or procedures, except, in each case, as required by changes in GAAP;
(xviii) make, change or revoke any material Tax election, change an annual U.S. Federal Income or other material Tax accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to material Taxes, settle or compromise any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax;
(xix) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property Rights that are owned by the Company or any of its Subsidiaries and are material to the businesses of the Company and its Subsidiaries, except, solely with respect to Intellectual Property Rights that are not material to the businesses of the Company and its Subsidiaries, in the Ordinary Course of Business;
(xx) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by applicable Law, (A) increase in any manner the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement (other than offer letters providing for an “employment at will” relationship without any right to contractual severance, entered into with new hire employees in the Ordinary Course of Business), (C) grant any new awards, or amend or modify the terms of any outstanding awards (including, in each case, Company Equity Awards), under any Company Benefit Plan, (D) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards)Benefit Plan, (FE) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (GF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or loans to any Company Employee (other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper routine travel advances issued in the ordinary course Ordinary Course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstandingBusiness and those loans, (F) Indebtednessadvances, the proceeds of which will be used to finance all guarantees or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereofcapital contributions expressly permitted by Section 7.1(a)(vi)), (G) Indebtedness under the Bridge Facility, refinancings hire any employee or replacements thereof and engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) 200,000 or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with terminate the funding employment of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceexecutive officer other than for cause;
(vxxi) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with respect to the Retained Businessa labor union, other than with respect to acquisitions of businesseslabor organization, which is subject to Section 5.01(b)(ix)works council or similar organization; or
(xxii) agree, and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected foregoing.
(b) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect or its Subsidiaries’ operations prior to the Retained BusinessEffective Time or give the Company, transferdirectly or indirectly, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon the right to control or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses direct the Parent’s or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect Merger Sub’s operations prior to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinEffective Time.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Collectors Universe Inc), Merger Agreement (Collectors Universe Inc)
Interim Operations. Except as may be (ai) The Company covenants and agrees as expressly provided for in this Agreement, (ii) expressly provided for in the Merger Agreement (including the Schedules), (iii) required by applicable Law or (iv) consented to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time in writing by Buyer in advance (unless Parent shall otherwise approve in writing, which approval shall consent will not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and Sellers shall cause each of its the Companies and the Company Subsidiaries to, use its reasonable best efforts and Westway Canada shall (with respect to conduct the Retained Business Canadian Feed Business), carry on their respective business in the ordinary course of business consistent with past practice, and, to the extent consistent therewith, the Sellers shall cause the Companies and the Company shall, Subsidiaries to and Westway Canada shall cause each of its Subsidiaries to, solely (with respect to the extent related to the Retained Canadian Feed Business, subject to compliance with the specific matters set forth below, ) use commercially reasonable best efforts to preserve substantially intact their respective business organization, to keep available the Retained Business’ organization intact services of their respective current officers and maintain the Retained Business’ existing relations and goodwill employees, to preserve their respective present relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees licensees and other Persons having business associates relationships with them. The Parties agree that each of ▇▇▇▇ ▇▇▇▇▇▇▇ and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services ▇▇▇ ▇▇▇▇▇▇▇ shall be authorized to provide consent on behalf of the Company and its Subsidiaries’ present employees and agents.
(b) Buyer for purposes of this Section 5.1. Without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after between the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingClosing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) otherwise expressly provided for in this Agreement or as set forth in Schedule 5.1 or as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and Sellers shall not permit any of its the Companies or the Company Subsidiaries to:, and Westway Canada shall not (with respect to the Canadian Feed Business), without the prior written consent of Buyer (which consent will not be unreasonably withheld conditioned or delayed):
(a) amend or propose to amend their respective governing documents;
(b) (i) split, subdivide, combine or reclassify any securities of any of the Companies, the Company Subsidiaries or Westway Canada (ii) except with respect as pursuant to SpinCo and this Agreement, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any securities of any of the SpinCo Companies, the Company Subsidiaries or Westway Canada or (other than in the case of clause (A)), iii) except (A) amend its certificate of incorporation for transfers which would cause either a net cash inflow or bylaws (or comparable governing documents) (other than amendments to outflow between the governing documents of any Subsidiary of Feed Intercompany Cash Sweep Account and the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)Parent Swingline Account, (B) splitfor the UK Reorganization, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), and (C) in connection with the direct or indirect repatriation (in any form or method approved by the relevant entity) of cash or cash equivalents to Netherlands Holdings or its direct or indirect owners, or (D) as otherwise consistent with past practice, declare, set aside or pay any dividend or distribution payable (whether in cash, stock stock, property or property (or any combination thereofotherwise) in respect of any shares of its capital stock (except for (1) any dividends of, or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement Contract with respect to the voting of its capital stockor registration of, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock the Companies’, the Company Subsidiaries’ or any securities convertible or exchangeable into or exercisable for any shares of its Westway Canada’s capital stock (other than (1) pursuant to the forfeiture of, dividends from its direct or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly indirect wholly-owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the CompanySubsidiary);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Westway Group, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed)), and except (x) as (1) required otherwise expressly required, contemplated or permitted by applicable Lawthis Agreement, (2y) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a7.1(a) of the Company Disclosure LetterLetter or (z) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business its business in the ordinary course of business consistent with past practicepractice in all material respects and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it shall use commercially its reasonable best efforts to preserve the Retained Business’ organization its business organizations substantially intact and maintain the Retained Business’ 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 the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) it and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality oflimiting, and in furtherance of, the foregoing, from the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date execution of this Agreement and prior until the Effective Time, except (1) as otherwise expressly required, 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 the First Effective Time COVID-19 (or SARS-CoV-2) virus), the Company will not (unless Parent shall otherwise approve consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:):
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws bylaws;
(ii) merge or comparable governing documentsconsolidate the Company with any other Person or restructure, 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 amendments 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 governing documents of Company, taken as a whole, on any Subsidiary assets of the Company;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person, other than advances to Company that would not preventEmployees in respect of travel or other related business expenses, delay in each case in the ordinary course of business consistent with past practice;
(vii) declare, set aside, make or impair the Initial Merger pay any dividend or the other Transactions)distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(Bviii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toshares to satisfy withholding Tax obligations upon the exercise, vesting or settlement of Company Restricted Stock Units, Company Deferred Stock Units Equity Awards outstanding as of the date hereof (or Company Performance Stock Units, in each case issued after the date hereof in accordance with past practice and with the terms of this Agreement) in accordance with their terms and, as applicable, the Company Stock Plans as in effect on the date of this Agreement (hereof or as modified after the date of this Agreement same may be amended in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(iiix) merge incur any indebtedness for borrowed money with an aggregate principal amount in excess of $5,000,000 or consolidate with any other guarantee such indebtedness of another Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except debt security of the Company;
(Ax) make or authorize any capital expenditure in the ordinary course excess of business consistent with past practice in a principal amount not to exceed $400,000,000 5,000,000 individually or in the aggregate at during any time outstanding twelve (12)-month period beginning on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the hereof;
(xi) enter into any Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as that would have been a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Material Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or had it been entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing other than in the ordinary course of business consistent with past practice;
(vxii) amend, modify, cancel or terminate any Material Contract, lease or sublease, or cancel, modify or waive any 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 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 changes with respect to the Retained Businessaccounting policies or procedures, except as required by GAAP or by applicable Law;
(xvi) other than with respect to acquisitions of businessesTransaction Litigation, which is subject governed by Section 7.14(c), settle or compromise any Proceeding which would reasonably be expected to Section 5.01(b)(ix(A) 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 a whole, or (C) involve any criminal liability or any admission of material wrongdoing or material wrongful conduct by the Company;
(xvii) (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 in a jurisdiction where the Company currently files such Tax Returns;
(xviii) 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 $5,000,000, in the aggregate, except (A) for sales or other dispositions of obsolete assets, (B) for transfers, sales or other dispositions of inventory in the ordinary course of business consistent with past practice, (C) pursuant to Contracts in effect prior to the date hereof, (D) for non-exclusive licenses in the ordinary course of business or (E) for abandonments, non-renewals or non-extensions of Intellectual Property Rights that are not material to the conduct of the Company’s business as then conducted;
(xix) except as required pursuant to the terms of any Benefit Plan in effect as of the date hereof, or as adopted or amended following the date hereof in accordance with this Agreement, or in the ordinary course of business consistent with past practice (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 the foregoing.
(b) Parent covenants and agrees that, from the execution of this Agreement until the Effective Time (unless the Company 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, (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 cause each of its Subsidiaries to, use its and their reasonable best efforts to conduct its business in the ordinary course of business consistent with past practice in all material respects and, to the extent consistent therewith, Parent shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to preserve its business organizations substantially intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business associates and others having material business dealings with it and keep available the services of its present employees and agents. Without limiting, and in furtherance of, the foregoing, from the execution of this Agreement until the Effective Time, except (1) as otherwise expressly required, contemplated or permitted by this Agreement, (2) as set forth in Section 7.1(b) of the Parent Disclosure Letter or (3) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), Parent shall not, and shall cause each of its Subsidiaries not to (unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)):
(i) adopt or propose any change in 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 any other Person, other than with respect 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 stock of Parent, 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 film and television production and programming (including sports rights) with third parties acquire any shares of such capital stock or video game productionsuch convertible or exchangeable securities, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures in each case other than (A) in connection with the repair or replacement issuance of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if equity awards under the portion of which that is not covered by insurance is less than $100,000,000) or (B) Parent Stock Plan in the ordinary course of business consistent with past practice and (B) the issuance of shares in the aggregate not in excess of 120% respect of the amounts reflected in the Company’s capital expenditure budget for each settlement of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) equity awards outstanding as of the Company Disclosure Letterdate hereof (or issued after the date hereof) in accordance with their terms and, as applicable, the Parent Stock Plan;
(v) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(vi) with respect to the Retained Businessreclassify, transfersplit, leasecombine, licensesubdivide or redeem, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon purchase or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses acquire or ordinary course security interests in connection with the production or financing of film and television programming or video game productionoffer to redeem, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon repurchase or otherwise dispose of any properties acquire, directly or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance ofindirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable forfor 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 optionsunderstanding to do any of the foregoing.
(c) Subject to Section 7.2(f), warrants from the execution of this Agreement until the Effective Time, the Company shall not terminate, amend, modify or other rights waive any provision of any confidentiality agreement, Standstill Agreement or similar agreement to acquirewhich 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 sharesagreement, 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.
(Ad) for any Shares issued pursuant 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 Restricted Stock Unitsshall exercise, Company Performance Stock Units consistent with the terms and Company Deferred Stock Units outstanding on conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations, if any.
(e) From the date of this Agreement until the earlier to occur of the Effective Time and the termination of this Agreement in accordance with the existing terms of such awards and the Company Stock Plansset forth in Article IX, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor Parent shall, and neither the Company nor Parent shall permit any of its Retained Subsidiaries shall enter into any such transaction that wouldto, 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 reasonably be expected to, preventindividually or in the aggregate, prevent or materially delay or materially impair the consummation of the Transactions;
(x) Mergers and the other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includintransactions contemplated by this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (BridgeBio Pharma, Inc.), Merger Agreement (BridgeBio Pharma, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement or as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts effort to conduct the Retained Business its business and that of its Subsidiaries’ in the ordinary course of business consistent with past practiceOrdinary Course and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use commercially their respective reasonable best efforts to preserve the Retained Business’ organization intact their business organizations intact, including their material Intellectual Property Rights, Company Material Contracts and other material assets, and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present officers, employees and agents.
(b) , except as required by applicable Law. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise expressly (unless Parent shall otherwise approve A) contemplated by this Agreement, (B) required by applicable Law, (C) as approved in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Parent or (3D) otherwise expressly disclosed set forth in the corresponding subsection of Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) adopt or 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 changes or restrictions on its assets, operations or businesses;
(iii) 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 or Parent, as applicable, to consummate the Transactions prior to the Outside Date, other than acquisitions of inventory or other goods in the Ordinary Course pursuant to and in accordance with the terms of Company Material Contracts in effect as of the date of this Agreement, true, correct and complete copies of which have been made available to Parent prior to the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries or any rights, warrants or options to acquire any such shares or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units (other than in the case issuance of clause (A)), shares (A) amend by its certificate wholly owned Subsidiary to it or another of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)its wholly owned Subsidiaries, (B) splitin respect of Company Options outstanding as of the date of this Agreement in accordance with their terms and, combineas applicable, subdivide the Stock Plans as in effect on the date of this Agreement, or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary C) Company Options issued to new employees of the Company which remains or its Subsidiaries in the Ordinary Course and in accordance with the Stock Plans as in effect on the date of this Agreement; provided that any Company Options issued pursuant to clause (C) will (w) not exceed 150,000 Company Ordinary Shares in the aggregate on a fully diluted basis, (x) have terms consistent with grant terms and amounts as Company Options granted to similarly situated employees, (y) be subject to the standard four (4) year vesting schedule as existing Company Options as of the date hereof and (z) not provide for accelerated vesting upon a termination of employment or a change in control of the 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;
(v) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its wholly owned Subsidiary after consummation Subsidiaries) in excess of such transaction), one million dollars (C$1,000,000) in the aggregate;
(vi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary);
(vii) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toCompany Ordinary Shares to satisfy withholding Tax obligations upon the exercise, vesting or settlement of Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case Options outstanding as of the date of this Agreement in accordance with past practice and with their terms and, as applicable, the terms of the Company Stock Plans as in effect on the date of this Agreement Agreement;
(viii) incur any Indebtedness (including the issuance of any debt securities, warrants or as modified after other rights to acquire any debt security) in excess of one million dollars ($1,000,000) in the date aggregate;
(ix) make or authorize any payment of, or accrual or commitment for, capital expenditures other than in accordance with the capital expenditures budget set forth on Section 6.1(a)(ix) of the Company Disclosure Letter;
(x) enter into any Contract that would have been a Company Material Contract that is specified in clause (iii), (vi), (vii), (ix), (xi), (xv) or (xvii) in Section 4.18(a) or any Government Grant that would have been a Company Material Contract that is specified in clause (xix) in Section 4.18(a) had it been entered into prior to this Agreement or amend, modify, supplement, waive, terminate, assign, convey, encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any such Company Material Contract, other than (1) expirations of any such Contract in the Ordinary Course in accordance with the terms of this Agreement) such Contract, or (2) purchasesnon-exclusive licenses, repurchasescovenants not to ▇▇▇, redemptions releases, waivers or other acquisitions of securities of any wholly rights under Intellectual Property Rights owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of its Subsidiaries, in each case, granted in the Company)Ordinary Course;
(xi) cancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries having in each case a value in excess of 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 ($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) merge institute any Proceeding by the Company or consolidate with any other PersonCompany Subsidiary, or restructure, reorganize or completely or partially liquidate (other than transactions 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 the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company business that would not be material to the Company’s consolidated operations or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the Transactions);
(iiixv) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishmake, adopt, amend change or terminate revoke any material Company Plan Tax election, change an annual Tax accounting period, adopt or amend change any material Tax accounting method, file any amended material Tax Return, enter into any closing agreement with respect to material Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, agree to an extension or waiver of the terms statute of limitations with respect to the assessment or determination of any outstanding equity-based awards other than material Tax, or take any such action taken for purposes of replacing, renewing or extending which is reasonably likely to result in a broadly applicable material Company Plan increase in the ordinary course Tax liability of business consistent 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 past practice that does not materially increase services provided in the cost Ordinary Course and sales of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofobsolete assets and except for sales, (B) grant or provide any transaction or retention bonuses to any directorleases, officer, employee licenses or other service provider 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 Intellectual Property Rights that are material to the businesses of the Company or any of its Subsidiaries, ;
(Cxviii) increase alter the compensation, bonus operation or pension, welfare or other benefits security of any directorIT Assets owned, officer used or employee 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 Ordinary Course in respect of business consistent 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 past practice the Company’s policies and procedures with respect to (1) employees below the level granting, amending or modifying awards and, with respect to grants of Executive Vice President and (2) employees at or above the level of Executive Vice President new awards, in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeaccordance with Section 6.1(a)(iv), (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards)Benefit Plan, (FE) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to materially change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (GF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or loans (other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper routine travel advances issued in the ordinary course of business consistent with past practice in a principal amount not Ordinary Course) to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof)Employee, (G) Indebtedness under the Bridge Facilityhire any employee or engage any independent contractor (who is a natural person) whose salary, refinancings wage rate or replacements thereof consulting fees (as applicable) and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that target cash bonus opportunity exceed $250,000 in the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), on an annual basis or (H) Indebtedness assumed 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 Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiarieschange in control, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereofother than, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000for 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;
(Jxxi) hedging 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 compliance with the hedging strategy any of the Company 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 of to itself and its Subsidiaries that, after the date of this Agreement in and prior to the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that Effective Time (unless the Company shall consult otherwise approve in writing (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 reasonable best effort to conduct its business and that of its Subsidiaries’ in the Ordinary Course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organization intact, including their material Intellectual Property Rights, material Contracts and other material assets, and maintain existing relations and goodwill with Parent prior to entering into hedging activities in connection with Indebtedness Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited it and its Subsidiaries; provided that present officers, employees and agents, except as required by applicable Law. Without limiting the aggregate principal amount generality of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% furtherance of the amounts reflected in the Company’s capital expenditure budget for each of 2017foregoing, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on from the date of this Agreement in accordance with until the existing terms of such awards and the Company Stock PlansEffective Time, except as otherwise expressly (A) contemplated by this Agreement, (B) Investment Preferred Stock (as defined in the Bridge Facility) or required by applicable Law, (C) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary Company, (D) as set forth on the corresponding subsection of Section 6.1(b) of the Company; provided thatParent Disclosure Letter or (E) in connection with or required to effectuate the Stock Split, for the avoidance of doubtSale Transactions, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing Parent shall be deemed not, and shall cause its Subsidiaries not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);to:
(ixi) with respect to the Retained Business, other than capital expenditures made adopt or propose any change in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 Parent’s Organizational Documents in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided manner that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation ability of Parent to consummate the Transactions; provided, that any amendment to Parent’s certificate of incorporation to increase the authorized number of shares or series of the Transactionscapital stock of Parent shall in no way be restricted by the foregoing;
(xii) merge or consolidate itself or any of its Subsidiaries with any other than Person or restructure, consolidate, recapitalize, reorganize or completely or partially liquidate, dissolve, in each case, except for any such transactions among its wholly owned Subsidiaries or any Parent Permitted Acquisitions;
(iii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses stock of film and television and production programming (includinParent or any of its Subsidiaries or any right, warrants or options to acquire such shares or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stoc
Appears in 2 contracts
Sources: Merger Agreement (Rada Electronic Industries LTD), Merger Agreement (Leonardo DRS, Inc.)
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries thatexpressly contemplated, from and after the execution of required or permitted by this Agreement and prior to the First Effective Time Agreement, (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or conditioned), (iv) as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in set forth on Section 5.01(a) 6.1 of the Company Disclosure LetterSchedule, or (v) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (v), to the extent permitted under applicable Law and practicable under the circumstances, the Company shallshall provide prior notice to and consult in good faith with Parent prior to taking such action), from the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will, and shall will cause each of its Subsidiaries to, use its and their commercially reasonable best efforts to (A) conduct their businesses in the Retained Business ordinary course of business and (B) preserve intact their business organizations and relationships with customers, suppliers, distributors and other Persons with which it has material business dealings; provided that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Except (u) as expressly contemplated, required or permitted by this Agreement, (v) as required by applicable Law, (w) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), (x) as set forth on Section 6.1 of the Company Disclosure Schedule, or (y) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (y), to the extent permitted under applicable Law and practicable under the circumstances, the Company shall provide prior notice to and consult in good faith with Parent prior to taking such action), from the date of this Agreement until earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(i) (x) adopt any change in the certificate of incorporation or bylaws of the Company or (y) adopt any change in the comparable organizational document of any of the Company’s Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize, recapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreement or arrangement imposing restrictions on the assets, operations or business of the Company or any of its Subsidiaries;
(iii) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction among the Company and its Subsidiaries or among the Company’s wholly owned Subsidiaries, (B) any issuance of Shares pursuant to exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms, or (C) incurrence of any Permitted Liens;
(iv) make any loans, advances or capital contributions to or investments in any Person (other than (A) to the Company or any of its wholly owned Subsidiaries and (B) operating leases and extensions of credit terms to customers in each case in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.);
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cv) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise with respect to any combination thereof) in respect of any shares of its capital stock (stock, except for (1) any dividends or other distributions paid by a direct or indirect any wholly owned Subsidiary of the Company to another direct the Company or indirect to any other wholly owned Subsidiary of the Company Company;
(vi) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company such transaction by the Company or any other a wholly owned Subsidiary of the Company, (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Equity Awards to the extent required by such Company Equity Awards, or (C) payment of the exercise price in respect of Company Options, in the case of clauses (B) and (C), outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(iivii) merge create, incur, assume or consolidate with guarantee any Indebtedness for borrowed money or issue any debt securities or guarantees of the same or any other PersonIndebtedness, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: for (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowings in the ordinary course of business consistent with past practice under the Company’s existing revolving credit facilities (including under both the Cash Flow Credit Agreement and ABL Credit Agreement); provided that any such incurrence does not materially increase and is not reasonably expected to cause the cost of such Company Plan Payment Condition (as defined in the ABL Credit Agreement) to fail to be satisfied on, or benefits provided under such Company Plan based on as of, the cost on the date hereofClosing Date, (B) grant guarantees or provide credit support provided by the Company or any transaction or retention bonuses to any director, officer, employee or other service provider of its Subsidiaries of the obligations of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except Subsidiaries in the ordinary course of business consistent to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except clause (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtednessthis Section 6.1(b)(vii), and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany any Indebtedness solely among the Company and its wholly wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(viii) other than in accordance with the Company’s capital expenditure budget made available to Parent, incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $5 million individually or $10 million in the aggregate or capital expenditures as required on an emergency basis or for the safety of individuals or the environment;
(Dix) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into other than in the ordinary course of business consistent with past practice, (EA) commercial paper issued enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement; provided, that no Contract of the type described in Section 5.1(k)(i)(B)(x) or (C) shall be entered into without the ordinary course prior written consent of business consistent with past practice Parent, or (B) amend, modify or waive in any material respect or terminate any Material Contract in a principal manner adverse to the Company (other than expirations of any such Contract in accordance with its terms);
(x) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) settle any Action for an amount not to exceed in excess of $250,000,000 1 million individually or $5 million in the aggregate at other than (A) any time outstandingsettlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered by insurance coverage or retention amounts maintained by the Company or any of its Subsidiaries and (B) settlements or compromises of any Action for an amount not materially in excess of the amount, if any, reflected or specifically reserved in the balance sheet (For the notes thereto) Indebtednessof the Company included in the Company Reports (with materiality measured relative to the amount so reflected or reserved, if any); provided that, in the case of each of the foregoing clauses (A) and (B), the proceeds settlement or compromise of which will be used to finance all such Action does not (x) impose any non-de minimis restriction on the business or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations operations of the Company or any of its Subsidiaries with respect to such Indebtedness (or Parent or any of its Subsidiaries after the Closing) and Parent and its Subsidiaries(y) include any non-de minimis non-monetary or injunctive relief, includingor the admission of wrongdoing, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of by the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms any of its Subsidiaries or on terms substantially consistent with any of their respective officers or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practicedirectors;
(vxii) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfersell, lease, license, sell, assign, let lapseencumber (other than Permitted Liens), abandon, cancelpermit to lapse, mortgage, pledge, place a Lien upon or otherwise dispose of any material assets or property (including any material Intellectual Property; provided that this clause (viProperty Rights) shall not restrict except (A) ordinary course non-exclusive licenses pursuant to existing contracts or ordinary course security interests in connection with the production commitments (or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Propertyrefinancings thereof), (B) as may be required by a Governmental Authority to permit or facilitate the granting consummation of the Merger or any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per licenseother transactions contemplated in this Agreement solely to the extent required pursuant to Section 6.5, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries or among the Company’s wholly owned Subsidiaries, or (D) in the ordinary course of business and in no event in an amount exceeding $1 million individually or $5 million in the aggregate;
(xiii) except for such actions required by the terms of Benefit Plans as in effect on the date hereof: (A) increase the compensation or other benefits payable or provided to the Company’s Employees or other service providers; (B) increase or accelerate or commit to accelerate the funding, payment or vesting of compensation or benefits provided under any Benefit Plan, (C) grant or announce any cash- or equity or equity-based incentive awards, bonus, change of control, severance or retention award to any Employee or other service provider of the Company or its subsidiaries; (D) establish, adopt, enter into terminate or amend any Labor Agreement or material Benefit Plan (or any plan, program, agreement or arrangement that would be a Benefit Plan if in effect on the date hereof); (E) recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative of any employees of the Company or its Subsidiaries or (F) hire or terminate the employment of any employee of the Company whose annualized base compensation exceed $300,000;
(xiv) acquire any business, assets or capital stock of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than the acquisition of assets from vendors or suppliers of the Company or any of its Subsidiaries in the ordinary course of business;
(xv) cancel, modify, amend or waive or terminate any of the Existing Credit Documents, except for modifications or amendments to any of the Existing Credit Documents that would not (A) impair the ability of Parent to obtain the Debt Financing or any high-yield bonds being issued in lieu of all or a portion of the Debt Financing on the Closing Date, (B) reduce the ability of the Company and its Subsidiaries to incur secured debt for borrowed money in the form of the Debt Financing or any high-yield bonds being issued in lieu of all or a portion of the Debt Financing on the Closing Date in any material respect, (C) reduce the ability of the Company and its Subsidiaries to make Restricted Payments (as defined in the applicable Existing Credit Document) on the Closing Date in any material respect, (D) licenses, sales, letting lapse, abandonment and cancellations impair the ability of Intellectual Property that is used the Merger to be consummated in compliance with any “merger” or held for use exclusively “fundamental changes” covenant in the SpinCo Business and Existing Credit Documents or (E) Affiliation Agreementsamend or modify the stated final maturity date of any indebtedness for borrowed money thereunder to be sooner than such maturity date as in effect as of the date hereof, amend or modify the interest rate or undrawn commitment fees payable by the Company or its Subsidiaries under any such agreement in a manner materially adverse to the Company and its Subsidiaries or amend or modify any such agreement to reduce the amount of the total lending commitments thereunder;
(viixvi) with respect to implement or announce any permanent plant closings or permanent facility shutdown that would implicate the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets WARN Act;
(including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (Axvii) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not than in the ordinary course of business or $100,000,000 individually in consistent with past practice (A) change or revoke any event or material Tax election; (B) transactions among change any annual Tax accounting period or material method of Tax accounting, (C) file any material amended Tax Return, (D) settle or compromise any material claim related to Taxes for an amount materially in excess of amounts reserved, (E) enter into any material closing agreement or (F) surrender any right to claim a material Tax refund, offset or other reduction in liability for an amount materially in excess of amounts reserved (it being agreed and understood that, notwithstanding any other provision, neither Section 6.1(b)(xi) nor Section 6.1(b)(xviii) (insofar as it relates to Section 6.1(b)(xi)) shall apply to Tax compliance matters); or
(xviii) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Sub or any of their Affiliates, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Retained Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries;’ respective operations.
(viiid) except with respect Subject to SpinCo the terms of this Agreement, including Section 6.5 and the SpinCo SubsidiariesSection 6.13, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on from the date of this Agreement in accordance with until the existing terms Effective Time, none of Parent, Merger Sub or their respective Subsidiaries shall (i) knowingly take any action that would prevent, materially delay or materially impede the consummation of the Equity Financing or the Debt Financing; (ii) acquire or agree to acquire by merging or consolidating with, or by purchasing a material portion of the assets of or equity in, any Person (a “Specified Acquisition”), if the entering into of a definitive agreement relating to or the consummation of such awards and the Company Stock Plansa Specified Acquisition, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided thatapplicable, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, to (A) prevent, materially delay or materially impair the obtaining of, or adversely affect in any material respect the ability of Parent or its Affiliates to procure, any authorizations, consents, orders, declarations or approvals of any Governmental Authority or the expiration or termination of any applicable waiting period necessary to consummate the transactions contemplated by this Agreement, including the Merger, or (B) materially increase the risk of any Governmental Authority entering an order, ruling, judgment or injunction prohibiting the consummation of the Transactions;
transactions contemplated by this Agreement, including the Merger; or (xiii) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses take any action that would reasonably be expected to prevent, materially impair or materially delay the consummation of film and television and production programming (includinthe Merger or the satisfaction of any of the closing conditions thereto.
Appears in 2 contracts
Sources: Merger Agreement (CD&R Associates VIII, Ltd.), Merger Agreement (Cornerstone Building Brands, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and except as (1otherwise expressly contemplated by this Agreement or as set forth in Section 6.1 of the Company Disclosure Letter) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless i) as otherwise contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) is required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or any Governmental Entity or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend adopt or propose any change in its certificate of incorporation or bylaws by-laws or other applicable governing instruments or other similar organizational documents of any of its Subsidiaries;
(B) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate;
(C) acquire assets outside of the ordinary course of business from any other Person or with a value or purchase price in the aggregate in excess of $5 million in any transaction or series of related transactions;
(D) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments to (1) the governing documents issuance of any Shares upon the exercise of Company Options set forth in Section 5.1(b)(i) of the Company Disclosure Letter in accordance with the terms of the Stock Plans or (2) the issuance of shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except securities convertible or exchangeable into or exercisable for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its such capital stock, or any options (including Company Options), warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(except for E) make any loans, advances or capital contributions to or investments in any Person (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $4 million in the aggregate;
(F) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends or other distributions by any direct or indirect wholly owned Subsidiary of to the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) any wholly owned Subsidiary of the Company Disclosure Letter), (DCompany) or enter into any agreement with respect to the voting of its capital stock;
(G) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding acquisition of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, any Shares tendered by Employees in each case in accordance with past practice and connection with the terms exercise of Company Options set forth in Section 5.1(b)(ii) of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement Disclosure Letter in accordance with the terms of this Agreementthe Stock Plans);
(H) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other than a wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except for borrowings and letter of credits issued under the Company’s existing revolving credit facility set forth in Section 5.1(b)(ii) of the Company Disclosure Letter;
(I) except as set forth in the ordinary course capital budgets set forth in Section 6.1(a)(I) of business consistent with past practice the Company Disclosure Letter, make or authorize any capital expenditure in excess of $2 million in the aggregate;
(J) make any material changes with respect to accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(1K) employees below the level of Executive Vice President and (2) employees at settle, release, waive or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationcompromise any pending or threatened suit, bonus action, claim, arbitration, investigation or pension, welfare litigation or other benefits prior to proceedings (i) for an amount in excess of $1 million or any obligation or liability of the Company in excess of such change, amount (Dii) increase entailing obligations that would impose any material restrictions on the severance business or termination payments or benefits payable to any director, officer, employee or other service provider operations of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined Subsidiaries or (Giii) forgive that is brought by any loans to directorscurrent, officers former or employees purported holder of any capital stock or debt securities of the Company or any of its SubsidiariesSubsidiaries relating to the transactions contemplated by this Agreement;
(ivL) incur make or change any Indebtedness material Tax election or issue tax accounting method, settle or compromise any warrants or material Tax liability other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes other than ordinary course state and local Tax inquiries;
(M) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or otherwise dispose of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstandingassets, (F) Indebtedness, the proceeds of which will be used to finance all product lines or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations businesses of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, includingother than inventory, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof supplies and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing other assets in the ordinary course of business consistent with past practice;
(vN) with respect except as expressly contemplated by this Agreement, required pursuant to Benefit Plans in effect prior to the Retained Businessdate of this Agreement and listed on the Company’s Disclosure Letter, or as otherwise required by applicable Law, (1) grant or provide for any severance or termination payments or benefits to any director or officer of the Company (the “Elected Officers”) or Employee, except, in the case of employees who are not Elected Officers, in the ordinary course of business consistent with past practice, (2) increase the compensation, perquisites or benefits payable to any Employee, except, in the case of Employees who are not Elected Officers of the Company, increases in the ordinary course of business consistent with past practice, (3) grant any equity or equity-based awards that may be settled in Shares, preferred shares or any other securities of the Company or any of its Subsidiaries or the value of which is linked directly or indirectly, in whole or in part, to the price or value of any Shares, preferred shares or other Company securities or Subsidiary securities, (4) accelerate the vesting or payment of any compensation payable or benefits provided or to become payable or provided to any Employee or (5) terminate or materially amend any existing, or adopt any new, Benefit Plan (other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) changes made in the ordinary course of business consistent with past practice and or as may be necessary to comply with applicable Laws, in either case that do not materially increase the aggregate not in excess costs of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letterany such Benefit Plans);
(viO) with respect to the Retained Businessexcept as required by applicable Laws, transferenter into, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon amend or otherwise dispose of extend any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses collective bargaining agreement or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreementslabor agreement;
(viiP) with respect except to the Retained Businessextent necessary to take any actions that the Company is otherwise permitted to take pursuant to Section 6.2 (and in such case only in accordance with the terms of Section 6.2), transfertake any action to render inapplicable, leaseor to exempt any third party from, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon any standstill arrangements or otherwise dispose the provisions of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained SubsidiariesTakeover Statutes;
(viiiQ) except with respect to SpinCo and the SpinCo Subsidiariesenter into, issueamend, deliver, sell, grant, transfer, cancel or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, modify any shares of its capital stock Material Contract or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding Contract that would be a Material Contract if in effect on the date of this Agreement in accordance with Agreement;
(R) cancel any debts or waive any claims or rights of substantial value (including the existing terms cancellation, compromise, release or assignment of such awards and the Company Stock Plansany indebtedness owed to, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to claims held by, the Company or to any other wholly owned Subsidiary of the Company; provided thatits Subsidiaries), except for the avoidance of doubt, granting customary profit participation rights cancellations made or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) waivers granted with respect to the Retained Business, claims other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not indebtedness in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 of business consistent with past practice which, in the aggregate aggregate, are not material or for claims other than indebtedness which are cancelled or waived in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as connection with the settlement of the date of actions referred to in, and to the agreement for such acquisition); provided that neither extent permitted by, clause (K) above;
(S) fail to maintain in full force and effect the material insurance policies covering the Company nor any of and its Retained Subsidiaries shall and their respective properties, assets and businesses in a form and amount consistent with past practices;
(T) enter into any such transaction agreement with a New Jersey Governmental Entity pursuant to the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1K-6, et seq. (“ISRA”) that wouldcould reasonably be expected to (i) require the Company to establish a financial assurance exceeding $1 million or (ii) otherwise result in investigation or remediation liabilities of the Company exceeding $1 million in the aggregate; or
(U) except as provided in Section 6.2 and Section 8.3(a), agree, authorize or commit to do any of the foregoing or any action which would result in any of the conditions to the Merger set forth in Article VII not being satisfied or that would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;to result in a Company Material Adverse Effect.
(xb) other than capital expenditures made The Company shall consult with Parent reasonably in accordance advance of any decision to (i) hire any “Executive Officer” (as such term is defined in Rule 3b-7 promulgated under the Exchange Act), promote any existing Executive Officer to a more senior position or otherwise appoint or promote any current director, employee, independent contractor or consultant to an Executive Officer position or (ii) adopt any material modification or material deviation from the Company’s annual operating plan, as previously provided to Parent; and in each case shall consider in good faith the reasonable recommendations of Parent in connection therewith.
(c) The Company shall, except as prohibited by applicable Law or as would jeopardize attorney-client privilege (but in such event, the Company will use its commercially reasonable efforts to keep Parent fully informed), keep Parent informed, on a current basis, of any material events, discussions, notices or changes with Section 5.01(b)(v) and other than purchases and licenses respect to any criminal or material regulatory investigation or action involving the Company or any of film and television and production programming (includinits Subsidiaries.
Appears in 2 contracts
Sources: Merger Agreement (ReAble Therapeutics Finance LLC), Merger Agreement (Djo Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and except as (1otherwise expressly required by this Agreement) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, and shall cause its Subsidiaries to, conduct the business of it and its Subsidiaries in all material respects in the ordinary course of business consistent with past practice and it shall, and shall cause each of its Subsidiaries to, use its respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practiceorganizations intact, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact maintain their Licenses and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of hereof until the Effective Time, except (A) as otherwise expressly required by this Agreement and prior to the First Effective Time Agreement, (unless B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Laws or (3D) otherwise expressly disclosed as set forth in Section 5.01(b7.1(a) of the Company Disclosure Letter), the Company shall not do any of the following and shall not permit any cause each of its Subsidiaries tonot to do any of the following:
(i) adopt or propose to its shareholders any change in its articles of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company or restructure, reorganize or completely or partially liquidate;
(iii) acquire (by purchase, merger, joint venture, partnership, consolidation, dissolution, liquidation, tender offer, exchange offer, recapitalization, reorganization, share exchange, business combination or similar transaction) any business or material amount of assets outside of the ordinary course of business consistent with respect past practice from any other Person, other than (A) acquisitions pursuant to SpinCo Contracts in effect as of the date hereof and set forth in Section 7.1(a)(iii) of the SpinCo Company Disclosure Letter and (B) any such acquisition (x) that, individually or in the aggregate, would not reasonably be expected to prevent, delay, impede or otherwise adversely affect the consummation of the Transactions and (y) pursuant to which the total value or purchase price paid or payable by the Company and its Subsidiaries would not exceed $10,000,000 individually or in the aggregate;
(iv) issue, deliver, sell, pledge, dispose of, grant, transfer, or subject to any Lien or authorize the issuance, delivery, sale, pledge, disposition, grant, transfer or the subjection to any Lien any shares of capital stock of the Company or any of its Subsidiaries (other than in the case issuance of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any shares by a wholly owned Subsidiary of the Company that would not preventto the Company or another wholly owned Subsidiary of the Company), delay or impair securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, stock appreciation rights, warrants, restricted stock units, restricted stock, “phantom” stock, “phantom” stock rights, stock-based performance units or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except for the Initial Merger issuance of Shares in respect of the exercise of Company Options or the vesting or settlement of Company RSUs or Company Restricted Stock, in each case, outstanding as of the date of this Agreement in accordance with their terms and the applicable Stock Plan as in effect on the date of this Agreement, or as may be granted in accordance with, or otherwise in compliance with, the terms of this Agreement;
(v) make any loans or advances to, or any capital contributions to or investments in, any Person, other Transactions), than (A) solely between or among the Company and/or one or more direct or indirect wholly owned Subsidiaries of the Company in immaterial amounts or made in the ordinary course of business consistent with past practice or (B) split, combine, subdivide or reclassify its outstanding shares advances in immaterial amounts made in the ordinary course of capital stock (except for any such transaction by a wholly owned subsidiary business consistent with past practice to employees of the Company which remains a wholly owned Subsidiary after consummation and its Subsidiaries for reimbursement of such transaction), routine travel or immaterial business expenses and in accordance with the terms of the applicable policy in effect on the date of this Agreement;
(Cvi) (A) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another the Company or to any other direct or indirect wholly owned Subsidiary of the Company, in each case in the ordinary course of business consistent with past practice), provided, that the Company may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2015 in an amount per share not to exceed $0.1033 per quarter and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2014, if the Company provides Parent with written notice of each record date it will select at least twenty (20) business days prior to the declaration date in respect of such applicable record date, (B) purchase, redeem or otherwise acquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities, except for (i) any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) another wholly owned Subsidiary of the Company Disclosure Letterin the ordinary course of business consistent with past practice, (ii) any split, combination or reclassification of capital stock of any wholly owned Subsidiary of the Company, or (iii) purchases, redemptions or other acquisitions of capital stock or other securities (x) in respect of the exercise of Company Options or for withholding of Shares to satisfy Tax withholding obligations in respect of the exercise, vesting or settlement of Company Options, Company RSUs and Company Restricted Stock, in each case, outstanding as of the date of this Agreement in accordance with their terms and the applicable Stock Plan as in effect on the date of this Agreement or (y) required by the terms of any plans, arrangements or Contracts existing on the date of this Agreement (or entered into after the date of this Agreement in accordance with this Section 7.1) between the Company or any of its Subsidiaries and any director or employee of the Company or any of its Subsidiaries (to the extent complete and accurate copies of such plans, arrangements or Contracts have been delivered to Parent prior to the date of this Agreement), or (DC) enter into any agreement with respect to the voting of its capital stock;
(vii) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise become responsible for any indebtedness of another Person, or (E) purchase, repurchase, redeem issue or otherwise sell any debt securities or warrants or other rights to acquire any shares debt security of the Company or any of its capital stock Subsidiaries, enter into any “keep well” or other Contract to maintain any securities convertible financial statement condition of another person or exchangeable enter into or exercisable for any shares arrangement having the economic effect of its capital stock (any of the foregoing, other than (1) pursuant to solely between or among the forfeiture ofCompany and/or one or more direct or indirect wholly owned Subsidiaries of the Company in immaterial amounts or in the ordinary course of business consistent with past practice; provided that the Company and its Subsidiaries may incur indebtedness for borrowed money, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units issue or Company Performance Stock Unitssell debt securities, in each case in accordance the ordinary course of business consistent with past practice and practice, in an amount up to $25,000,000 at any given time; provided further, that all such borrowings pursuant to the preceding proviso shall be repaid within 30 days of the borrowing date (on a rolling basis with respect to each portion of such borrowings);
(viii) except as set forth in the terms capital budgets set forth in Section 7.1(a)(viii) of the Company Stock Plans as Disclosure Letter and consistent therewith, make or authorize any payment of, or accrual or commitment for, any capital expenditure in effect excess of $10,000,000 in the aggregate;
(ix) make any changes with respect to accounting policies or procedures (other than those required by changes in GAAP or applicable Law or, if applicable with respect to foreign Subsidiaries of the Company, the applicable foreign generally accepted accounting principles);
(x) settle or compromise, or offer or propose to settle or compromise, any threatened or pending actions, suits, claims, hearings, arbitrations, litigations, investigations or other proceedings before a Governmental Entity (each, a “Proceeding”) or other obligation or liability except in accordance with the parameters set forth on Section 7.1(a)(x) of the Company Disclosure Letter; provided that no such settlement or compromise, or offer in respect thereof, may involve any injunctive or other non-monetary relief which, in either case, imposes restrictions on the business operations of the Company and its Subsidiaries (or would impose restrictions on the business operations of the Parent and its Subsidiaries, including, for the avoidance of doubt, the Company and its Subsidiaries, after the Closing);
(xi) enter into any Contract that (A) would have been a Material Contract had it been entered into prior to the date of this Agreement (other than any Contract that would constitute a Material Contract solely pursuant to clauses (i), (iv) (only with respect to Material Contracts that are letters of credit or surety bonds in the ordinary course of business consistent with past practice, and as modified after expressly permitted pursuant to Section 7.1(a)(vii)), (vii), subclause (C) of clause (viii) (with respect to wholly owned Subsidiaries only), clause (xii) (with respect to such Material Contracts for which the date Company or its Subsidiaries are a beneficiary, to the extent otherwise compliant with Section 7.2) of this Agreement Section 5.13(a) and teaming agreements entered into in the ordinary course of business consistent with past practice), in each case except, for the avoidance of doubt, Government Contracts and Direct Charge Contracts, or (B) contains a change of control or similar provision that would require a material payment to the other party or parties thereto in connection with the Transactions;
(xii) amend, modify or terminate any Material Contract (other than any Contract that would constitute a Material Contract solely pursuant to clauses (i), (iv) (only with respect to Material Contracts that are letters of credit or surety bonds in the ordinary course of business consistent with past practice, and as expressly permitted pursuant to Section 7.1(a)(vii)), (vii), subclause (C) of clause (viii) (with respect to wholly owned Subsidiaries only), clause (xii) (with respect to such Material Contracts for which the Company or its Subsidiaries are a beneficiary, to the extent otherwise compliant with Section 7.2) of Section 5.13(a) and teaming agreements entered into in the ordinary course of business consistent with past practice), or cancel, release, waive or modify any material debts or waive, release, cancel, transfer, assign or pledge any material claims or rights held by it thereunder, in each case except in the ordinary course of business consistent with past practice, and except for terminations caused by expirations of Material Contracts in accordance with the terms their terms;
(xiii) except as required by Law, (A) make, change, or rescind any material Tax election, except for any Protective 2014 Distribution Election; (B) file any material amended Tax Return of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of its Subsidiaries; (C) adopt or change any material method or period of Tax accounting; (D) settle or compromise any material claim relating to Taxes; (E) voluntarily surrender any claim for a refund of material Taxes; (F) enter into any closing agreement relating to Taxes; (G) file any material Tax Return that is inconsistent with past practice; or (H) consent to any extension or waiver of the Companylimitation period applicable to any Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice);
(iixiv) merge or consolidate with take any other Person, or restructure, reorganize or completely or partially liquidate action that would reasonably be expected (other than transactions A) to cause any of the type contemplated by Applicable Distributions not to qualify as transactions under Section 5.01(b)(vii368(a)(1)(D) of the Code or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary 355 of the Company Code or (B) to cause any stock or securities distributed in which such Subsidiary is the surviving entity in connection with an acquisition Applicable Distributions not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries to be treated as “qualified property” for purposes of Section 361(c)(2) of the Company that would not prevent, materially delay or materially impair the Transactions)Code;
(iiixv) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishtransfer, adoptsell, amend lease, assign, license, mortgage, subject to Liens, pledge, surrender, encumber, divest, cancel, abandon or terminate any material Company Plan allow to lapse or amend the terms expire or otherwise dispose of any outstanding equity-based awards other than or any such action taken for purposes part of replacingits assets (including material Intellectual Property), renewing licenses, operations, rights, product lines, businesses or extending a broadly applicable material Company Plan interests therein, in each case except (x) in the ordinary course of business consistent with past practice that does not materially increase and (y) for transactions involving a de minimis amount of assets in the cost aggregate;
(xvi) except to the extent required pursuant to the terms of such Company any Benefit Plan or benefits provided under Material Contract (or any “rabbi trusts” relating to any such Company Plan based on the cost on Benefit Plans) in effect as of the date hereofof this Agreement, or as otherwise required by applicable Law, (BA) grant or provide any transaction severance, termination, change in control or retention bonuses payments or benefits to any present or former director, officer, or employee or other service provider of the Company or any of its Subsidiaries, (CB) increase in any manner the compensation, bonus or pension, welfare welfare, severance, termination pay, change in control, retention or other benefits of to any current or former director, officer officer, or employee of the Company or any of its Subsidiaries, except for any increase to employees below Band A or Band B that are not material individually or in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeaggregate, (DC) increase the severance or termination payments or benefits payable pay any bonus to any current or former director, officer, or employee or other service provider of the Company or any of its Subsidiaries, (D) grant any equity, equity-based or long-term incentive awards under any Benefit Plan or any arrangement that would have been a Benefit Plan had it been in effect as of the date of this Agreement, (E) become a party to, establish, adopt, commence participation in, amend or terminate any material compensation, employment, equity compensation, severance, termination, change in control, pension, retirement, profit-sharing, deferred compensation, incentive, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any current or former directors, officers, or employees of the Company or its Subsidiaries (or newly hired employees), other than amendments that are necessary to avoid adverse tax consequences that do not increase materially costs to the Company, (F) amend or modify the terms of any outstanding equity-based or long-term incentive awards, (G) take any action to amend, waive or accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are award made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire the extent such actions are material individually or in the aggregate, (H) take any businessaction to accelerate the payment, whether by mergeror, consolidation, purchase in the case of property severance or assets, licenses similar benefits or otherwise (valuing any non-cash consideration at its fair market value as deferred compensation not provided under a plan that is qualified under Section 401(a) of the date Code, to fund or in any other way secure the payment of the agreement for such acquisition); provided that neither the Company nor severance or similar benefits or deferred compensation under any of its Retained Subsidiaries shall Benefit Plan, (I) establish, adopt, enter into or amend in any such transaction that wouldmaterial respect any collective bargaining agreement or other agreement with a labor union, works council or would reasonably be expected tosimilar organization, prevent, materially delay or materially impair the consummation of the Transactions;
(xJ) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinchange any
Appears in 2 contracts
Sources: Merger Agreement (Harris Corp /De/), Merger Agreement (Exelis Inc.)
Interim Operations. (a) The From the date of this Agreement until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company covenants and agrees as to itself and its Subsidiaries thatthat it will use its commercially reasonable efforts, from and after the execution date of this Agreement and prior to until the First Effective Time (Time, unless Parent shall otherwise approve in writing, which approval to cause the business of it and its Subsidiaries to be conducted, in all material respects, in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall not be unreasonably withhelduse their respective commercially reasonable efforts to (a) preserve their business organizations, conditioned or delayed, assets and except as (1) required by applicable Lawlines of business intact, (2b) expressly required maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations that are material to the Company and its Subsidiaries, taken as a whole, (c) maintain all leases and all personal property (reasonable wear and tear excepted) that are material to the Company and its Subsidiaries, taken as a whole, used by the Transaction Documents (including in connection with the Separation Company and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts and necessary to conduct the Retained Business its business in the ordinary course of business consistent with past practicepractice (but with no obligation to renew or extend any lease or to otherwise exercise any rights or options it may have under any lease, including but not limited to rights to purchase or increase or decrease its current properties) and the Company shall, (d) maintain in all material respects its and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ their existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement in accordance with its terms, except (unless A) as otherwise expressly required by this Agreement, (B) as Parent shall otherwise may approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable LawLaws or definitive interpretations thereof or by any Governmental Entity, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b4.1(a) of the Company Disclosure Letter), the Company shall not will not, and shall will not permit any of its Subsidiaries Subsidiaries, to:
(i) except with respect adopt any amendments to SpinCo and the SpinCo Subsidiaries (other than its charter or bylaws or, in the case of clause any Subsidiary that is not a corporation, similar applicable organizational documents;
(A)), ii) (A) amend its certificate adopt a plan of incorporation complete or bylaws (partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or comparable governing documents) other reorganization (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactionsthis Agreement), (B) splitacquire by merging or consolidating with, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary purchasing an equity interest in or portion of the Company which remains a wholly owned Subsidiary after consummation assets of such transaction(other than as set forth in Section 4.1(a)(iii)), or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, (C) declaretake or omit to take any action that would cause any rights under Material Intellectual Property, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement including with respect to the voting of its capital stockany registrations or applications for registration, to lapse, be abandoned or canceled, or (E) purchasefall into the public domain, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, actions or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan omissions in the ordinary course of business consistent with past practice that does and not materially increase the cost otherwise in violation of such Company Plan this Section 4.1, or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance enter into a joint venture or termination payments partnership or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equitysimilar third-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesparty business enterprise;
(iviii) incur acquire assets or capital stock from any Indebtedness or issue any warrants or other rights to acquire any IndebtednessPerson, except other than (A) in the ordinary course of business consistent with past practice or (B) acquisitions of assets at or below fair market value with a purchase price not in excess of $500,000 individually or $7,500,000 in the aggregate, in each case for any transaction or series of related transactions;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options or SARs and the settlement of Restricted Stock Awards, RSUs and PSPUs (and dividend equivalents thereon, if applicable) outstanding on the date of this Agreement or (B) the issuance of shares of capital stock by a principal amount Subsidiary of the Company to the Company or another Subsidiary of the Company or (C) the issuance, sale, pledge, disposition of, grant, transfer, encumbrance, or authorization of the issuance, sale, pledge, disposition, grant, transfer or encumbrance of capital stock of any Subsidiary of the Company in connection with financing arrangements not restricted under this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to exceed acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(v) other than ordinary course trade credit made in the ordinary course of business, make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect Subsidiary of the Company) in excess of $400,000,000 1,000,000 in the aggregate at any time outstanding on prevailing market terms time;
(vi) (A) declare, set aside or on terms substantially consistent pay any dividend or other distribution, whether payable in cash, stock or other property, with respect to its capital stock, except for dividends by any wholly owned direct or more beneficial indirect Subsidiary of the Company to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date or any other wholly owned direct or indirect Subsidiary of the Contract evidencing such IndebtednessCompany; provided, that the Company may, at its election, pay the $0.15 per Share cash dividend declared by the Company on June 17, 2015, (B) except with split, combine or reclassify the Shares or any other outstanding capital stock of the Company or issue or authorize the issuance of any other securities in respect to the Bridge Facilityof, in replacement of, lieu of or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednesssubstitution therefor, (C) intercompany Indebtedness among redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of the Company, except for acquisitions, or deemed acquisitions, of Shares or other equity securities of the Company in connection with (1) the satisfaction of Tax withholding obligations with respect to Company Options, SARs, Restricted Stock Awards, RSUs, or PSPUs outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Options or SARs outstanding on the date of this Agreement with Shares (including in connection with “net exercises”) and (3) forfeitures of Company Options, SARs, Restricted Stock Awards, RSUs or PSPUs outstanding on the date of this Agreement, in the case of each of (1), (2) and (3), pursuant to their terms as in effect on the date of this Agreement, and except for acquisitions or deemed acquisitions of Shares or other equity securities of the Company or any of its wholly owned Subsidiaries by the Company or any of its wholly owned Subsidiaries, or (D) enter into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of the Company’s capital stock or other Rights of the Company or any of its Subsidiaries; provided that nothing contained herein shall prohibit dividends and distributions paid or made on a pro rata basis by direct or indirect Subsidiaries of the Company in the ordinary course consistent with past practice;
(1vii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify the terms of any Indebtedness, including any Indebtedness under the existing revolving credit facilities of the Company, in excess, in the aggregate, of $3,000,000 of letters of credit and $1,000,000 of all other Indebtedness. “Indebtedness” of any Person means (A) all indebtedness for borrowed money, (B) any other indebtedness which is evidenced by a note, bond, indenture, debenture or similar Contract, (C) all capitalized lease obligations of such Person or obligations of such Person to pay the deferred and unpaid purchase price of property and equipment, other than trade payables incurred in the ordinary course of business, (D) all obligations of such Person pursuant to securitization or factoring programs or arrangements, (E) all guarantees and arrangements having the economic effect of a guarantee of such Person of any other Indebtedness of any other Person, (F) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or financial covenants of others, for the purpose of assuring the holder of any obligation which would constitute Indebtedness under any other clause of this definition of such others, or to purchase any other Person’s Indebtedness of the type referred to in any other clause of this definition or any security therefor (excluding any such obligation or undertaking by the Company or any Subsidiary thereof in respect of Indebtedness of the Company or any Subsidiary thereof, to the extent not drawn (i) such Indebtedness is in existence on the date hereof or is permitted hereby and (ii) the terms of such Indebtedness require such obligation or undertaking), (G) net cash payment obligations of such Person under swaps, options, derivatives and other hedging agreements or arrangements that will be payable upon termination thereof (assuming they were terminated on the date of determination), and payments are not triggered thereby, (H) reimbursement obligations under (i) letters of credit, bank guaranteesguarantees and other similar contractual obligations entered into by or on behalf of such Person or (ii) surety, security customs, reclamation or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programsother than, in each the case issued, made or of this clause (ii) those entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 2 contracts
Sources: Merger Agreement (XPO Logistics, Inc.), Merger Agreement (Con-Way Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including as set forth in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(aPart 4.1(a) of the Company Disclosure Letter)Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly required by this Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, use conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business consistent with past practice, in all material respects and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to maintain and preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entitiesits business organization, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present key employees and agents.
(b) maintain satisfactory relationships with customers, suppliers and distributors. Without limiting the generality of, and in furtherance of, the foregoing, during the Company covenants and agrees as to itself and its Subsidiaries that, period from and after the date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including as set forth in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(bPart 4.1(a) of the Company Disclosure Letter)Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the Company shall not (and shall not permit any of its Subsidiaries Company Subsidiary to:):
(i) except with respect to SpinCo and amend the SpinCo Subsidiaries Company’s Organizational Documents or the Organizational Documents of any Company Subsidiary (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments any amendment to the governing documents Organizational Documents of any Company Subsidiary of the Company that would not preventreasonably be expected to be adverse to Parent or to impair, prevent or delay or impair the Initial Merger or consummation of any of the other Transactionstransactions contemplated hereby), ;
(Bii) split, combine, subdivide subdivide, amend the terms of or reclassify its outstanding any shares of the Company’s capital stock stock;
(except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Ciii) declare, set aside aside, make or pay any dividend or other distribution (whether payable in cash, stock or property (or any combination thereofproperty) in with respect of to any shares of its the Company’s capital stock or the capital stock of any Company Subsidiary, other than (except for A) the Company’s regular quarterly dividend on the Company Common Stock to be declared and paid in the first quarter of the Company’s 2021 fiscal year only, in a quarterly amount not to exceed the amount set forth in Part 4.1(a)(iii) of the Company Disclosure Schedule, or (1B) any dividends or distributions paid by a direct or indirect any wholly owned Company Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other another wholly owned Subsidiary of the Company);
(iiiv) merge acquire (by merger, consolidation, acquisition of stock or consolidate with assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person, (C) any business, or restructure(D) any assets, reorganize or completely or partially liquidate except, (other than transactions of the type contemplated 1) acquisitions by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such from any wholly owned Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, among any wholly owned Subsidiaries of the Company that would not preventCompany; (2) the purchase of equipment, materially delay or materially impair supplies and inventory in the Transactions);
ordinary course of business, (iii3) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms inbound licenses of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan Intellectual Property in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinor
Appears in 2 contracts
Sources: Merger Agreement (Analog Devices Inc), Merger Agreement (Maxim Integrated Products Inc)
Interim Operations. (a) The Company covenants Crown and agrees King each covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent Crown or King, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1otherwise expressly contemplated by this Agreement or as set forth in Section 7.1(a) required by applicable Lawof such Party’s Disclosure Letter, (2i) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practice, Ordinary Course and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorslicensors, licensorslicensees, creditors, lessors, employees Service Providers and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees Service Providers and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the generality of, of and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatof Section 7.1(a), from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless Parent shall otherwise approve w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) as approved in writing, writing by the other Party (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company such Party’s Disclosure Letter), the Company each Party, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to such Party’s Organizational Documents or, except for amendments that would both not materially restrict the operations of such Party’s businesses and not reasonably be expected to prevent, materially delay or materially impair the ability of such Party to consummate the Transactions, the Organizational Documents of any of such Party’s Subsidiaries, including, in the case of King, King Sub’s Organizational Documents;
(ii) except for any such transactions among its direct or indirect wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with any other Person, or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets outside of the Ordinary Course from any other Person (A) with a fair market value or purchase price in excess of $10,000,000 in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or (B) that would reasonably be expected to prevent, materially delay or materially impair the ability of such Party to consummate the Transactions, in each case, other than acquisitions of inventory or other goods in the Ordinary Course and transactions among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case issuance of clause (A)), shares (A) amend by its certificate direct or indirect wholly owned Subsidiary to it or another of incorporation its direct or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)indirect wholly owned Subsidiaries, (B) split, combine, subdivide or reclassify its in respect of equity-based awards outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary as of the Company which remains a wholly owned Subsidiary after consummation date of such transaction)this Agreement, or (C) granted in accordance with Section 7.1(b)(xvi) in each of clauses (B) and (C), in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other than any Permitted Encumbrances) over any material portion of such Party’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the Ordinary Course on any of its assets or any of its Subsidiaries, except for Encumbrances (A) that are required by or automatically effected by Contracts in place as of the day hereof, (B) that do not materially detract from the value of such assets or (C) that do not materially impair the operations of such Party or any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from Crown and any of its direct or indirect wholly owned Subsidiaries or to or from King and any of its direct or indirect wholly owned Subsidiaries, as applicable, or in accordance with Section 7.1(b)(xvi)) in excess of $1,000,000 in the aggregate;
(vii) except to the extent expressly provided by, and consistent with, Section 7.1(b)(vii) of such Party’s Disclosure Letter, declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company modify in any material respect its dividend policy;
(viii) reclassify, split, combine, subdivide or redeem, purchase (2through such Party’s share repurchase program or otherwise) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock, other than with respect to (A) the capital stock or other equity interests of a direct or indirect wholly owned Subsidiary of such Party or (B) the acquisition of shares of Crown Common Stock or King Common Stock, as applicable, tendered by Service Providers in connection with a cashless exercise of Crown Options or King Options, as applicable, outstanding as of the date of this Agreement or in order to pay Taxes in connection with the exercise or vesting of Crown equity awards or King equity awards, as applicable, outstanding as of the date of this Agreement or granted in accordance with Section 7.1(b)(xvi), pursuant to the terms of the Crown Stock Plan or King Stock Plan, as applicable, and the applicable award agreement, in the Ordinary Course;
(ix) except to the extent expressly provided by, and consistent with, Section 7.1(b)(ix) of such Party’s Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (A) not in excess of $180 million in the aggregate during any consecutive twelve (12) month period (other than capital expenditures within the thresholds set forth in Section 7.1(b)(ix) of such Party’s Disclosure Letter), (1B) pursuant expenditures not in excess of $50 million (net of insurance proceeds) in the aggregate that such Party reasonably determines are necessary to avoid a material business interruption or maintain the forfeiture of, safety and integrity of any asset or withholding property or (C) paid by any direct or indirect wholly owned Subsidiary to such Party or to any other direct or indirect wholly owned Subsidiary of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitssuch Party, in each case in accordance with past practice response to any unanticipated and subsequently discovered events, occurrences or developments (provided, that such Party will use its reasonable best efforts to consult with the terms other Party prior to making or agreeing to any such capital expenditure);
(x) other than in the Ordinary Course or in connection with any transaction or potential transaction described on Section 7.1(a) of such Party’s Disclosure Letter, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, adversely amend, modify, supplement or waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract other than (A) expirations and renewals of any such Contract in the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofContract, (B) grant non-exclusive licenses under Intellectual Property owned by Crown and its Subsidiaries or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company King or any of its Subsidiaries, as applicable, in each case, granted in the Ordinary Course, or (C) increase the compensation, bonus any agreement among such Party and its direct or pension, welfare indirect wholly owned Subsidiaries or other benefits of any director, officer among such Party’s direct or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its indirect wholly owned Subsidiaries;
(ivxi) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than in the ordinary course of business consistent Ordinary Course or with past practice in a principal amount respect to amounts that are not material to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company such Party and its Subsidiaries, taken as a whole, than existing Indebtednesscancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries except debts or claims among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xii) settle or compromise, or offer or propose to settle or compromise any material Proceeding, including before a Governmental Entity, except in accordance with a maturity date the parameters set forth in Section 7.1(b)(xii) of such Party’s Disclosure Letter; provided, that no more than 10 years after such settlement or compromise, or offer in respect thereof, may involve any injunctive or other non-monetary relief which, in either case, imposes any material restrictions on the date business operations of the Contract evidencing such IndebtednessParty and its Subsidiaries or Affiliates;
(xiii) amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(Bxiv) except make, change or revoke any material election with respect to the Bridge FacilityTaxes, in replacement change any material Tax accounting method or period, enter into any material closing agreement with respect to Taxes, enter into any material Tax sharing, allocation or indemnification agreement or arrangement, settle, compromise or otherwise finally resolve any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, or fail to file when due (taking into account any available extensions) any material Tax Return;
(xv) transfer, sell, lease, divest, cancel, abandon, allow to lapse or expire or otherwise dispose of, or permit or suffer to refinanceexist the creation of any Encumbrance upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for in connection with (A) sales of or non-exclusive licenses of the foregoing provided in the Ordinary Course, (B) sales of obsolete assets, (C) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock not including services or sales of inventory in the Retained Subsidiariesordinary course of business) with a fair market value not in excess of $50,000,000 individually if the transaction is not 150 million in the ordinary course or $100,000,000 individually aggregate other than pursuant to Material Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with this Agreement and (D) sales among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xvi) except as required by the existing terms of any Benefit Plan as in effect on the date of this Agreement, as permitted under this Agreement or as required by applicable Law, increase or change the compensation or benefits payable to any Service Provider other than in the Ordinary Course; provided, that, notwithstanding the foregoing, except as expressly disclosed in Section 7.1(b)(xvi) of such Party’s Disclosure Letter or required pursuant to a Crown Benefit Plan or King Benefit Plan, as applicable, in effect as of the date of this Agreement, the Parties shall not: (A) grant any new long-term incentive or equity-based awards and or amend or modify the Company Stock Plansterms of any such outstanding awards under any Crown Benefit Plan or King Benefit Plan, as applicable, (B) Investment Preferred Stock (as defined in the Bridge Facility) grant any retention or transaction bonuses, (C) increase or change the compensation or benefits payable to any executive officer (other than changes in health and welfare benefits that are generally applicable to all salaried Service Providers in the Ordinary Course), (D) terminate, enter into, amend or renew any material Benefit Plan, other than routine amendments to health and welfare plans (other than severance plans) that do not materially increase benefits or result in a material increase in administrative costs, or, other than as permitted by wholly owned Subsidiaries Section 7.1(b)(xvi) of such Party’s Disclosure Letter, adopt any compensation or benefit arrangement that would be a material Benefit Plan if it were in existence as of the date of this Agreement, (E) accelerate the vesting of any compensation for the benefit of any Service Provider, (F) increase or change the severance terms applicable to any Service Provider, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) other than as required by GAAP, change any assumptions required by GAAP used to calculate funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding rate in respect of any Benefit Plan or (I) terminate the employment of any executive officer (other than for cause) or hire any new executive officer (other than as a replacement hire receiving substantially similar terms of employment); provided, that, to the Company extent that a Party intends to hire an individual to replace a named executive officer of such Party, such Party shall first consult in good faith with the other Party prior to, and with respect to, the hiring of such individual;
(xvii) recognize any labor union, works council, or to other labor organization or employee representative as the representative of any other wholly owned Subsidiary of the Company; provided thatemployees of the Party or its Subsidiaries, or become a party to, establish, adopt, amend, commence negotiations for or terminate any collective bargaining agreement or other labor-related Contract with a labor union, works council, or other labor organization or employee representative, in each case, other than as required by applicable Law;
(xviii) incur any Indebtedness (including the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant issuance of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any optionsdebt securities, warrants or other rights to acquire, acquire any debt security) or guarantee any such shares Indebtedness, except for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not Indebtedness for borrowed money incurred in the ordinary course Ordinary Course under Crown’s or King’s, as applicable, revolving credit facilities and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase other lines of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value credit existing as of the date of this Agreement, (B) guarantees by Crown or any direct or indirect wholly owned Subsidiary of Crown of Indebtedness of Crown or any other direct or indirect wholly owned Subsidiary of Crown, (C) guarantees by King or any direct or indirect wholly owned Subsidiary of King of Indebtedness of King or any other direct or indirect wholly owned Subsidiary of King, (D) Indebtedness incurred in connection with a refinancing or replacement of existing Indebtedness (but in all cases which refinancing or replacement shall not increase the agreement aggregate amount of Indebtedness permitted to be outstanding thereunder and in each case on customary commercial terms consistent in all material respects with the Indebtedness being refinanced or replaced), (E) Indebtedness incurred pursuant to letters of credit, performance bonds or other similar arrangements in the Ordinary Course, (F) interest, exchange rate and commodity swaps, options, futures, forward contracts and similar derivatives or other hedging Contracts (1) not entered for such acquisition); provided that neither speculative purposes and (2) entered into in the Company nor any Ordinary Course and in compliance with its risk management and hedging policies or practices in effect on the date of its Retained Subsidiaries shall enter into any such transaction that wouldthis Agreement, or would reasonably be expected to, prevent, materially delay (G) Indebtedness incurred among such Party and its direct or materially impair the consummation of the Transactionsindirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xxix) convene any special meeting (or any adjournment or postponement thereof) of each Party’s respective stockholders other than capital expenditures made the Crown Stockholders Meeting or King Stockholders Meeting, as applicable; or
(xx) agree or commit to do any of the foregoing.
(c) Nothing contained in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinthis Agreement s
Appears in 2 contracts
Sources: Merger Agreement (C&J Energy Services, Inc.), Merger Agreement (Keane Group, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior until the Effective Time or the earlier termination of this Agreement, except (v) in connection with the Carveout Transaction, (w) as set forth in Section 6.1(a) of the Company Disclosure Letter, (x) as otherwise expressly contemplated or permitted by this Agreement (including Section 6.17), (y) to the First Effective Time extent consented to in writing by Parent (unless Parent shall otherwise approve in writing, which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except conditioned) or (z) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct cause the Retained Business business of it and its Subsidiaries to be conducted in the ordinary course of business consistent with past practice, and the Company it shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially their respective reasonable best efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting associates. Notwithstanding the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior subject to the First Effective Time exceptions set forth in clauses (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Laww), (2x), (y) expressly required by the Transaction Documents and (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(bz) of the Company Disclosure Letter)immediately preceding sentence, the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and amend the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or incorporation, bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company any of its Subsidiaries;
(ii) acquire (by merger, consolidation, acquisition of stock or (2assets or otherwise) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) any corporation, partnership or other business organization or any property or assets outside of the Company Disclosure Letter)ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $5 million in any transaction or series of related transactions, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) acquisitions pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as Contracts in effect on as of the date of this Agreement (or as modified after that have been made available to Parent prior to the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(iiiii) merge or consolidate with any other Person, Person or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is or any of its Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber or authorize the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongissuance, sale, pledge, disposition, grant, transfer or the restructuring, reorganization or liquidation encumbrance of, any wholly owned Subsidiaries shares of the Company that would not preventcapital stock or securities convertible, materially delay exchangeable or materially impair the Transactions);
exercisable therefor (iiicollectively, “Equity Interests”) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its SubsidiariesSubsidiaries (including any Company Stock Options, Company Restricted Stock, Stock Appreciation Rights, Performance Share Units, Phantom Stock Units, Phantom Stock Appreciation Units, Time Stock Appreciation Rights or Performance Stock Appreciation Rights), except issuances or dispositions of (A) Shares pursuant to Company Stock Options, Stock Appreciation Rights or Performance Share Units outstanding on the date of this Agreement under the Company Plans, (B) Shares in connection with the matching of contributions under the Company’s 401(k) Plans, (C) increase Shares or options or rights to acquire Shares in connection with grants or awards of stock based compensation made in accordance with Section 6.1(a)(ix) hereof or (D) Equity Interests pursuant to the compensationRights Agreement;
(v) declare, bonus set aside, establish a record date for, or pensionpay any dividends on or make any other distributions (whether payable in cash, welfare stock, property or a combination thereof) in respect of any of the capital stock, other than any dividends from any wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary of the Company;
(vi) reclassify, split, combine, subdivide, repurchase, redeem or otherwise acquire, directly or indirectly, any of the Equity Interests, except for (A) redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options, Stock Appreciation Rights, Performance Share Units, employee severance, retention, termination, change of control and other contractual rights existing on the date of this Agreement on the terms in effect on the date of this Agreement, including with respect to Company Restricted Stock or (B) pursuant to the Rights Agreement;
(vii) except as contemplated by the terms of this Agreement, including pursuant to Section 6.18, (A) incur, issue or modify in any material respect the terms of any Indebtedness for borrowed money, or assume, prepay, (except as required pursuant to the terms of any Indebtedness currently outstanding), defease, cancel, acquire, guarantee or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the indebtedness of any Person, (B) issue or sell any debt securities or warrants or other benefits rights to acquire any debt security of the Company or any of its Subsidiaries or (C) assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money (in each case, for the avoidance of doubt, excluding trade payables, capitalized lease obligations, or obligations issued or assumed as consideration for services or property, including inventory), except for (1) Indebtedness incurred under the Second Amended and Restated Loan and Guaranty Agreement, dated August 16, 2011, by and among Collective Brands Financial, Inc., the Guarantors signatory thereto, the Lenders signatory thereto, ▇▇▇▇▇ Fargo Retail Finance, LLC and Citigroup Global Markets, Inc. (the “Revolving Credit Facility”), (2) letters of credit issued pursuant to the Revolving Credit Facility or otherwise issued in the ordinary course of business, (3) interest rate and other hedging arrangements on customary commercial terms in the ordinary course of business and (4) Indebtedness owed by any controlled Subsidiary of the Company to the Company; provided that the Company and its Subsidiaries shall not materially increase or decrease any intercompany payables or receivables except at or in connection with the Closing as contemplated by or required to accomplish the Carveout Transaction;
(viii) grant or incur any Lien material to the Company and its Subsidiaries, other than (A) Permitted Encumbrances; (B) pledges or deposits by the Company or any of its Subsidiaries in the ordinary course of business under workmen’s compensation Laws, unemployment insurance Laws or similar Laws; (C) good faith deposits in connection with Contracts (other than for the payment of Indebtedness) to which the Company or one of its Subsidiaries is a party, in each case, in the ordinary course of business; (D) Liens that may be incurred or granted pursuant to or in accordance with the terms of any Indebtedness in effect as of the date hereof, in connection with any Indebtedness permitted pursuant to Section 6.1(a)(vii) or (E) pursuant to licenses or sublicenses of Intellectual Property granted in the ordinary course of business;
(ix) except as required pursuant to agreements in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (A) grant, pay or agree to pay any severance or termination payments or any benefits to any current or former director, officer or employee of the Company or any of its Subsidiaries, except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice practice, (B) increase the compensation or bonus (or grant, pay or agree to pay bonuses) to any current or former director, officer or employee of the Company or any of its Subsidiaries, except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with respect to past practice, (1C) increase pensions or welfare benefits of any current or former director, officer or employee of the Company or any of its Subsidiaries, except in the case of employees below who are not executive officers of the level Company, in the ordinary course of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changebusiness, (D) increase establish, adopt, terminate or materially amend any Company Plan or materially amend the severance terms of any Equity Awards, or termination payments enter into any new, or benefits payable to amend any existing change in control arrangements or retention, retirement or similar agreements with any new, current or former director, officer, officer or employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of or take action to fund, any compensation payable or benefits under to become payable or provided to any current or former director, officer or employee of the Company Plan or any of its Subsidiaries, except as otherwise provided in this Agreement, (including F) enter into any equity-based awardsnew, or amend any existing, employment agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice and with an annual base salary and incentive compensation opportunity not to exceed $175,000 or (G) grant or make any equity awards that may be settled in Shares, preferred shares, or any Equity Interest or any other securities of the Company or any of its Subsidiaries, or the value of which is linked directly or indirectly, in whole or in part, to the price or value of any Shares, preferred shares, Equity Interests or other Company securities or Subsidiary securities;
(x) other than in the ordinary course of business, (A) make or change any material Tax election, (B) change the Company’s or any Subsidiary of the Company’s method of accounting for Tax purposes, (C) file any material amended Tax Return, (D) settle, concede, compromise or abandon any material Tax claim or assessment, (E) surrender any right to a refund of material Taxes or (F) consent to any extension or waiver of the limitation period applicable to any claim or assessment with respect to material Taxes;
(xi) except as required by GAAP, a Governmental Entity or applicable Law, make any material changes to accounting policies or principles;
(xii) except in the ordinary course of business, make any loans, advances or capital contributions to, or investments in, any Person, other than (i) to or in the Company or to or in any direct or indirect controlled Subsidiary of the Company or (ii) to or in franchise partners or wholesale customers;
(xiii) (A) enter into any Contract that would have been a Company Material Contract pursuant to subsections (C), (D), (E), (F), (G), (J), (K) change or (M) of Section 5.1(q)(i) had it been entered into prior to the date of this Agreement, (B) terminate, materially amend or waive any actuarial material rights under any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement, in each case in a manner materially adverse to the Company and its Subsidiaries, excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract, or (C) except in the ordinary course of business, waive any material default under, or release, settle or compromise any material claim against the Company or liability or obligation owing to the Company, under any Company Material Contract; provided, in each case, that the Company and its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiv) transfer, sell, lease, license, assign, mortgage, pledge, divest or otherwise dispose of any entity or material assets, product lines, rights or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, in each case having a current value of $2,000,000 individually or $5,000,000 for all such transactions in the aggregate, other than (A) inventory, supplies and other assets in the ordinary course of business, (B) pursuant to Contracts in effect prior to the date of this Agreement that have been made available to Parent prior to the date of this Agreement or (C) pursuant to licenses or sublicenses of Intellectual Property granted in the ordinary course of business;
(xv) except for the expenditures contemplated by the capital budgets set forth in Section 6.1(a)(xv) of the Company Disclosure Letter or for expenditures required by Law or in response to casualty loss or property damage, make or authorize any capital expenditures;
(xvi) other than pursuant to Section 6.16, waive, release, settle or compromise any pending or threatened litigation, arbitration, claim (excluding ordinary course disputes with vendors in which no litigation or arbitration commences) or action against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, arbitration, claim or action (A) where the amount paid in an individual settlement or compromise by the Company (and not including any amount paid by the Company’s insurance carriers or third parties) does not exceed $1,000,000 individually or $5,000,000 in the aggregate or (B) that would impose any material restrictions on the business or operations of the Company or its Subsidiaries; provided that the foregoing clause (A) will not restrict the Company’s ability to settle any ordinary course claim involving a settlement amount not in excess of $100,000;
(xvii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees reorganization of the Company or any of its Subsidiaries;
(ivxviii) incur any Indebtedness or issue any warrants or other rights fail to acquire any Indebtedness, except (A) maintain in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to full force and effect material insurance policies covering the Company and its SubsidiariesSubsidiaries and their respective properties, taken as assets and businesses in a whole, than existing Indebtedness, form and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business amount consistent with past practice, unless the Company determines in its reasonable commercial judgment that the form or amount of such insurance should be modified; or
(Exix) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not agree, authorize or commit to exceed $250,000,000 in the aggregate at do any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend foregoing actions or enter into any letter of intent (and fees and expenses in connection therewithbinding or non-binding) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company similar agreement or any of its Subsidiaries arrangement with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;foregoing actions.
(vb) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties Neither Parent nor Merger Sub shall knowingly take or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of permit any of its Retained Subsidiaries but not including their Affiliates to take any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided action that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would could reasonably be expected to, prevent, materially delay to prevent or materially impair impede the consummation of the Transactions;Merger, the Carveout Transaction or the other transactions contemplated by this Agreement and the Carveout Transaction Agreement.
(xc) other than capital expenditures made Nothing contained in accordance this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Affiliates’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiaries’ respective operations.
Appears in 2 contracts
Sources: Merger Agreement (Wolverine World Wide Inc /De/), Merger Agreement (Collective Brands, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from From and after the execution date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement, except (unless the following exceptions (i)–(v), the “Interim Covenant Exceptions”) (i) as otherwise required or expressly permitted by this Agreement, (ii) as may be required by applicable Law, (iii) for any actions taken reasonably and in good faith as a result of COVID-19 or to respond to or comply with COVID-19 Measures, (iv) as may be consented to in writing by Parent shall otherwise approve in writing, (which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except as conditioned); provided that Parent shall be deemed to have consented in writing if it provides no response or good faith request for additional information within five (15) required by applicable Law, Business Days after receiving a written request (2email sufficient) expressly required by from the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) Company for such consent or (3v) as otherwise expressly disclosed set forth in Section 5.01(a) 7.1 of the Company Disclosure Letter)Schedule, the Company shallshall use reasonable best efforts to, and shall cause each of its Subsidiaries to, to use its reasonable best efforts to to, conduct the Retained Business its business in all material respects in the ordinary course of business and, to the extent consistent with past practicetherewith, shall use, and the Company shall, and shall cause each of its Subsidiaries toto use, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to (i) preserve the Retained Businessits and its Subsidiaries’ organization intact assets and business organizations intact, (ii) maintain the Retained Business’ existing relations in effect all of its material foreign, federal, state and goodwill local licenses, permits, consents, franchises, approvals and authorizations and (iii) maintain satisfactory relationships with Governmental Entitiesits material customers, customerslenders, suppliers, distributors, licensors, creditorslicensees, lessors, employees and business associates distributors and others having material business dealings relationships with it; provided, however, that no action or failure to take action with respect to matters specifically addressed by the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersprovisions of Section 7.1(b) and keep available the services shall constitute a breach under this sentence unless such action or failure to take action would constitute a breach of the Company and its Subsidiaries’ present employees and agentssuch provision of Section 7.1(b).
(b) Without limiting From the generality ofdate of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX, other than pursuant to any Interim Covenant Exception, except that Parent may withhold, delay or condition its consent to actions contemplated by Section 7.1(b)(vii) or Section 7.1(b)(viii) (in each case to the extent relating to actions of the Company only and not of the Company’s Subsidiaries) in furtherance of, the foregoingParent’s sole discretion, the Company covenants shall not, and agrees as to itself and shall cause its Subsidiaries not to:
(i) adopt (A) any change in the Company’s Organizational Documents (except for immaterial or ministerial amendments) or (B) material changes to the Organizational Documents of any Subsidiary of the Company that, in the case of this clause (B), would be adverse to Parent;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, except for any such plan solely between or among the Wholly Owned Subsidiaries of the Company;
(iii) acquire, directly or indirectly by merger, consolidation, acquisition of stock or assets or otherwise, any business, Person, material properties or material assets from any other Person (other than the Company or its Wholly Owned Subsidiaries) with purchase price in excess of $25 million in any individual transaction or series of related transactions or $100 million in the aggregate, in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement prior to the Outside Date, other than acquisitions of inventory or other goods or services in the ordinary course of business;
(iv) transfer, sell, lease, license, divest, cancel or otherwise dispose of, any material properties or material assets (excluding any Intellectual Property Rights) of the Company or any of its Subsidiaries, including capital stock of any of its Subsidiaries or incur, permit or suffer to exist the creation of any material Encumbrance (other than a Permitted Encumbrance) upon, any such material properties, assets or any material Owned IPR, except (A) services provided in the ordinary course of business, (B) sales of obsolete assets in the ordinary course of business, (C) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $25 million individually or $100 million in the aggregate (other than pursuant to the terms of Company Material Contracts in effect prior to the date of this Agreement) and (D) sales of inventory or other goods in the ordinary course of business;
(v) except as set forth in Section 7.1(b)(xix), issue, sell, dispose of, grant, transfer, lease, license, guarantee, Encumber (other than with Permitted Encumbrances), or otherwise enter into any Contract or other agreement with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock or other equity interests or such convertible or exchangeable securities, other than (A) any such transaction or action by a Wholly Owned Subsidiary of the Company to the Company or between or among Wholly Owned Subsidiaries of the Company, (B) the issuance of shares of such capital stock, other equity interests or convertible or exchangeable securities in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Company Benefit Plans in effect on the Capitalization Date or (C) the issuance of shares of such capital stock, other equity interests or convertible or exchangeable securities in respect of Company Equity Awards granted after the date hereof without violation of this Agreement;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries or between or among any of its Wholly Owned Subsidiaries) in excess of $15 million individually or $30 million in the aggregate, other than (x) pursuant to existing contractual obligations as of the date of this Agreement or (y) in connection with sale or rental financing arrangements in connection with the sale of Company Products in the ordinary course of business;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company, (B) regular quarterly dividends, in an amount not to exceed $0.24 per share in each case, declared and paid at such times as are consistent with the Company’s historical practice over the twelve (12)-month period prior to the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned C) pro rata dividends or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required distributions by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (a Subsidiary other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any a Wholly Owned Subsidiary of the Company that would not preventin the ordinary course of business;
(viii) reclassify, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), other than (1A) pursuant to satisfy applicable Tax withholding and/or exercise prices upon vesting, settlement or exercise of any Company Equity Award outstanding on the forfeiture ofdate hereof or granted after the date hereof without violation of this Agreement, or withholding (B) any such transactions solely involving Wholly Owned Subsidiaries of Taxes the Company;
(ix) (A) incur any Indebtedness for borrowed money (including the issuance of any debt securities), or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, except for guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with respect tothis Section 7.1(b), except for incurrences of Indebtedness and guarantees under the Company Restricted Stock UnitsRevolving and Term Loan Credit Agreement not in excess of $2.2 billion in the aggregate, the Receivables Agreement not in excess of $110 million in the aggregate and the Master Framework Agreement not in excess of $90 million in the aggregate, (B) prepay, redeem, repurchase, defease, satisfy, discharge, cancel or otherwise terminate any Indebtedness for borrowed money of the Company Deferred Stock Units or any Company Performance Stock UnitsSubsidiary other than payments of Indebtedness under the Company Credit Agreements, except, in each case of clauses (A) and (B) for any such transactions solely between or among the Company and/or its Wholly Owned Subsidiaries, or (C) amend, supplement or otherwise modify the Company Credit Agreements or the Company Indentures in accordance with past practice and with any manner that would increase the terms amount of indebtedness available thereunder, increase the cost to Parent to prepay, terminate, redeem, satisfy or discharge the indebtedness thereunder at Closing or otherwise impede the ability of the Parent to effectuate any prepayment, payment, termination, redemption, satisfaction or discharge thereunder at Closing;
(x) make or authorize any payment of, or commitment for, capital expenditures, other than (A) as contemplated by the Company’s capital budget set forth in Section 7.1(b)(x) of the Company Stock Plans as Disclosure Schedule, (B) to the extent reasonably necessary to protect human health and safety and (C) any unbudgeted capital expenditures not to exceed $5 million individually or $10 million in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of aggregate per annum without taking into account any wholly owned Subsidiary of the Company amounts permitted by the Company or any other wholly owned Subsidiary of the Companyforegoing clause (B);
(iixi) merge or consolidate with enter into any other PersonContract that would have been a Company Material Contract had it been entered into prior to this Agreement, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent business;
(xii) other than with past practice that does not respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 7.1(b)(vi), Section 7.1(b)(ix) and Section 7.14, terminate, materially increase the cost of such amend, materially modify, or waive any material rights under, any Company Plan or benefits provided under such Company Plan based on the cost on the date hereofMaterial Contract, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except than in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesbusiness;
(ivxiii) incur cancel, modify or waive any Indebtedness debts or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of claims held by the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiarieshaving in each case a value in excess of $1 million individually or $5 million in the aggregate, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings other than debts or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed claims held against customers in connection with a Sky Acquisition and refinancings the sale or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the rental of Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement Products in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) solely between or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and and/or its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Wholly Owned Subsidiaries;
(viiixiv) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights except as expressly provided for by Section 7.12, fail to use commercially reasonable efforts to maintain in effect any material Insurance Policy, unless simultaneous with any termination, cancellation or entering into customary film lapse of such material Insurance Policy, replacement self-insurance programs are established by the Company or television financing partnerships one or contractual arrangements for film more of its Subsidiaries or television financing shall be deemed not replacement policies underwritten by reputable insurance carriers are in full force and effect, in each case, providing coverage substantially similar to be an issuancethe coverage under the terminated, sale cancelled or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)lapsed material Insurance Policies;
(ixxv) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming Transaction Litigation or video game productionany Tax claim, audit, assessment or dispute, which is subject to shall be governed exclusively by Section 5.01(b)(x7.19 and Section 7.1(b)(xvii), spend respectively, settle or commit to spend compromise any Proceeding for an amount in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 5 million individually or $200,000,000 25 million in the aggregate in during any calendar year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or which would reasonably be expected to, to (A) prevent, materially delay or materially impair the consummation of the Transactionstransactions contemplated by this Agreement or (B) involve any criminal liability or result in any non-monetary obligation that is material to the Company and its Subsidiaries (taken as a whole);
(xxvi) make any material changes with respect to any financial accounting policies or procedures, except as required by GAAP or SEC rule or policy;
(A) make (other than in the ordinary course of business), change or revoke any material Tax election, (B) change any annual Tax accounting period, (C) change any material Tax accounting method, (D) file any amended Tax Return that is material, (E) enter into any closing agreement with respect to Taxes, (F) settle any material Tax claim, audit, assessment or dispute for an amount that materially exceeds the amount reserved with respect thereto, or (G) surrender any right to claim a refund of a material amount of Taxes;
(xviii) (A) sell, assign, transfer, divest or otherwise dispose of, or grant any exclusive license, to any material Owned IPR, except in the ordinary course of business, or (B) cancel, abandon or otherwise allow to lapse or expire any material Registered Owned IPR (or any rights of the Company or its Subsidiaries therein or thereto), other than at the end of its term or otherwise in the Company’s reasonable business judgment;
(xix) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or established after the date of this Agreement not in contravention of this clause (xix), (A) materially increase the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, except for (1) increases in compensation in the ordinary course of business, subject to the limitations set forth in Section 7.1(b)(xix) of the Company Disclosure Schedule and (2) the payment of cash incentive compensation for completed periods based on actual performance in the ordinary course of business, (B) become a party to, establish, adopt, amend in any material respect, commence participation in or terminate any material Company Benefit Plan, (C) grant any new awards, or amend or modify in any material respect the terms of any outstanding awards, under any Company Benefit Plan, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment of, compensation or benefits under any Company Benefit Plan, (E) hire any employee to a position at the level of Vice President or above (other than to replace a departed employee who was not on the Company’s executive leadership team) or (F) terminate the employment of any employee who is a member of the Company’s executive leadership team other than for cause;
(xx) other than capital expenditures made in accordance the ordinary course of business, become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with Section 5.01(b)(va labor union, labor organization, works council or similar organization; or
(xxi) agree, authorize or commit to do any of the foregoing.
(c) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time or give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company and other than purchases its Subsidiaries shall exercise, consistent with the terms and licenses conditions of film this Agreement, complete control and television supervision over their respective operations.
(d) Notwithstanding anything to the contrary in this Agreement, each of Parent and production programming the Company shall not, and shall cause its respective controlled Affiliates not to directly or indirectly (includinwhether by merger, consolidation, or otherwise), acquire, purchase, lease, or license or otherwise enter into a transaction with (or agree to acquire, purchase, lease, or license or otherwise enter
Appears in 2 contracts
Sources: Merger Agreement (Hill-Rom Holdings, Inc.), Merger Agreement (Baxter International Inc)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries thatotherwise (i) required by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1ii) required by applicable Law, (2iii) expressly required approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or as contemplated by the Final Step Planconditioned) or (3iv) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, from the date of this Agreement until the Effective Time, the Company will, and will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course of business consistent with past practice and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to conduct preserve their business organizations intact (including the Retained Business service of key employees) and to maintain existing relations with key Persons with whom the Company and its Subsidiaries have significant relationships; provided, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Except as otherwise (w) required by this Agreement, (x) required by applicable Law, (y) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth on Section 6.1(b) of the Company Disclosure Schedule, from the date of this Agreement until the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(i) (x) adopt or submit to shareholder approval any change in the articles of incorporation or bylaws of the Company or (y) adopt any change in the comparable organizational document of any Subsidiary of the Company that, in the case of this clause (y), would adversely affect or delay the consummation of the Merger or the other transactions contemplated by this Agreement;
(ii) (x) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transaction between or among any of its Subsidiaries that would not impose, individually or in the aggregate, any changes or restrictions on its assets, operations or business or on the assets, operations and business of the Company and its Subsidiaries taken as a whole that would be adverse to Parent or any of its Subsidiaries or (y) restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, individually or in the aggregate, any changes or restrictions on the assets, operations or business or on the assets, operations and business of the Company or any of its Subsidiaries that would be adverse to Parent or any of its Subsidiaries;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (A) acquisitions of inventory, supplies and similar materials in the ordinary course of business consistent with past practice, (B) pursuant to Contracts in effect on the date of this Agreement which have been disclosed in unredacted form to Parent prior to the date of this Agreement, (C) in accordance with the Company’s capital expenditure budget made available to Parent prior to the date of this Agreement and set forth in the Company shallDisclosure Schedule, and shall cause each or (D) any other acquisitions for consideration that are not in excess of $5,000,000 in the aggregate;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Lien against, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company or any of its Subsidiaries toSubsidiaries, solely or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to the extent related to the Retained Businessacquire any shares of such capital stock or such convertible or exchangeable securities, subject to compliance with the specific matters set forth belowin each case, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business other than (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersA) and keep available the services of any such transaction among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries that would not be adverse to Parent or any of its Subsidiaries’ present employees and agents.
, or (bB) Without limiting any issuance, sale, grant or transfer of Shares pursuant to (1) the generality of, and in furtherance of, exercise or settlement of Company Options or Company RSU Awards outstanding as of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and date of this Agreement or granted after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve not in writing, which approval shall not be unreasonably withheld, conditioned violation of this Agreement or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents grant of Company Restricted Share Awards after the date of this Agreement not in violation of this Agreement;
(including in connection with the Separation and the Distributionv) make any loans, advances or capital contributions to any Person (3other than (A) otherwise expressly disclosed in Section 5.01(b) of to the Company Disclosure Letter), the Company shall not and shall not permit or any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)wholly-owned Subsidiaries, (B) split, combine, subdivide or reclassify its outstanding shares of capital stock pursuant to any Contract described in clause (except for any such transaction by a wholly owned subsidiary F) of the Company which remains definition of a wholly owned Subsidiary after consummation of such transaction), “Material Contract,” (C) extensions of credit terms to customers or vendors in the ordinary course of business and (D) customary loans or advances to employees in the ordinary course of business in amounts not to exceed $10,000,000 in the aggregate at any time);
(vi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1A) any dividends or other distributions paid by a direct or indirect wholly any wholly-owned Subsidiary of the Company to another direct the Company or indirect wholly to any other wholly-owned Subsidiary of the Company or and (B) regular quarterly dividends to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) shareholders of the Company Disclosure Letter)by the Company in an amount not to exceed $0.18 per Share, (D) enter into any agreement in each case declared and paid at such times as is consistent with respect historical practice over the most recent fiscal year ended prior to the voting date of its capital stockthis Agreement);
(vii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly such transaction by a wholly-owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not preventbe adverse to Parent or any of its Subsidiaries and (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Options, materially delay Company Restricted Share Awards or materially impair Company RSU Awards or payment of the Transactionsexercise price in respect of Company Options, in each case, outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(iiiviii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishcreate, adoptincur, amend assume, guarantee, endorse, suffer to exist or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent otherwise be liable with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses respect to any directorindebtedness for borrowed money, officer, employee issue or sell any debt securities or warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except (A) indebtedness for borrowed money in an amount not to exceed $10,000,000 in the ordinary course of business consistent with past practice with respect to aggregate that is (1) employees below on terms not materially less favorable in the level of Executive Vice President and aggregate than the Company’s existing indebtedness or (2) employees prepayable at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationany time at par (plus customary floating rate breakage costs, bonus or pension, welfare or other benefits prior to such changeif applicable), (DB) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider guarantees of indebtedness of the Company or any of its wholly-owned Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness indebtedness between or among the Company and/or any of its wholly-owned Subsidiaries and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding financing of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing accounts payable in the ordinary course of business consistent with past practice;
(vix) other than in accordance with the Company’s capital expenditure budget made available to Parent prior to the date of this Agreement and set forth in the Company Disclosure Schedule, incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $1,000,000 individually or $10,000,000 in the aggregate;
(x) other than in the ordinary course of business or in connection with any matter to the extent such matter is expressly permitted by any other clause of this Section 6.1(b), (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (B) amend or modify in any material respect or assign (other than assignments between or among the Company and/or any of its Subsidiaries that would not be adverse to Parent or any of its Subsidiaries) or terminate any Material Contract, other than expirations of any such Contract in accordance with its terms; provided, however, that in no event may the Company enter into any Contract described in clause (B) or (E) of the definition of a “Material Contract” or any Specified Contract, except, in each case, as would not be adverse to Parent or any of its Subsidiaries following the Effective Time other than in any de minimis respect;
(xi) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Authority or quasi-governmental authority (including the Retained BusinessFinancial Accounting Standards Board or any similar organization);
(xii) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings (other than any audit or other proceeding in respect of Taxes), for an amount in excess of $2,000,000 individually or $25,000,000 in the aggregate or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Authority that would restrict the future activity or conduct of Parent, the Company or any of their respective Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person other than with respect to monetary settlements only, settlements or compromises of any action, suit, claim, hearing, arbitration, investigation or other proceedings to the extent reflected or reserved against in the balance sheet (or the notes thereto) of the Company included in the Company Reports filed prior to the date of this Agreement for an amount not in excess of the amount so reflected or reserved;
(A) make or change any material Tax election, other than consistent with past practice, (B) change any entity classification for federal income tax purposes of any material Subsidiary, (C) create an entity outside of the United States that is (x) a direct Subsidiary of the Company or any of its domestic Subsidiaries and (y) treated as a “disregarded entity” or partnership for U.S. federal income tax purposes, or knowingly create a permanent establishment of the Company or any domestic Subsidiary outside the United States, (D) file any material amended Tax Return, (E) adopt any material accounting method for Taxes, other than consistent with past practice or change any material accounting method for Taxes, (F) settle or compromise any Tax claim for an amount in excess of $2,000,000 individually or $25,000,000 in the aggregate, other than with respect to acquisitions settlements or compromises of businessesany Tax claim for an amount that does not exceed the amount disclosed, which is subject reflected or reserved in accordance with U.S. GAAP in the Company Reports filed prior to Section 5.01(b)(ix)the date of this Agreement, and (G) surrender any material claim for a refund of Taxes, (H) enter into any closing agreement relating to a material amount of Taxes or (I) other than with respect to film and television production and programming (including sports rights) with third parties or video game productionin the ordinary course of business, which is subject to Section 5.01(b)(x), make or commit consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(xiv) transfer, sell, lease, license, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Lien upon, any assets of the Company or any of its Subsidiaries, including capital expenditures other than (A) in connection with the repair or replacement stock of facilitiesany of its Subsidiaries, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) except for sales in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company obsolete assets and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with having a fair market value not in excess of $50,000,000 1,000,000 individually if the transaction is not or $10,000,000 in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiariesaggregate;
(viiixv) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, as required by any shares Benefit Plan in effect as of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement or adopted or entered into in accordance with the existing terms of such awards and the Company Stock Plansthis Agreement, (A) terminate, adopt, establish, enter into, amend or renew any Benefit Plan, other than amendments that do not materially increase benefits or result in materially increased administrative costs; (B) Investment Preferred Stock increase in any manner the compensation, benefits, severance or termination pay of any of the current or former (as defined x) directors, (y) executive officers or (z) employees or consultants who are natural persons of the Company or its Subsidiaries with target total annual cash compensation opportunities (i.e., base pay or base rate and short term cash incentive target amounts) in the Bridge Facility) or excess of $300,000; (C) by wholly owned Subsidiaries to increase in any manner the compensation, benefits, severance or termination pay of any employees or consultants who are natural persons of the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights its Subsidiaries with target total annual cash compensation opportunities at or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Businessbelow $300,000, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 of business consistent with past practice; provided, that (x) any such increase in any event bonus or incentive payment corresponds to a routine annual salary or base pay increase implemented in the ordinary course of business consistent with past practice or (By) $50,000,000 individually any such bonus (or $200,000,000 increase in bonus) or similar incentive payment is awarded in recognition of the recipient’s performance in the aggregate ordinary course of business consistent with past practice; (D) pay any bonus or incentive compensation under any Benefit Plan, other than payments based on actual performance for completed performance periods; (E) accelerate the vesting of or lapsing of restrictions, or amend the vesting requirements, with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan; (F) grant any new severance, change in control, retention benefit or any yearother similar award (other than pursuant to arrangements entered into with newly hired and promoted employees in the ordinary course of business consistent with past practice (provided, that, in each case case, such arrangement is in all material respects in the form that has been provided to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value Parent as of the date of this Agreement) and for separation agreements entered into with terminated employees who are not executive officers in the agreement for such acquisitionordinary course of business consistent with past practice); provided that neither (G) take any action to accelerate the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldpayment of, or would reasonably be expected toto fund or secure the payment, prevent, materially delay or materially impair the consummation of the Transactions;
any amounts under any Benefit Plan; (H) hire any (x) consultant who is a natural person with aggregate annual fees in excess of $300,000, (y) executive officer or (z) employee who, upon commencement of employment would be designated as a “Level 8” employee or above, except, in the case of clause (z), employees who are hired in the ordinary course of business to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure; provided, that such new hire’s compensation and benefits package is comparable to that which the Company has historically made available to employees in similar positions, taking into account reasonable modifications for competitive market arrangements; (I) promote any executive officer of the Company or promote any employee to an executive officer position; (J) become a party to, establish, adopt, materially amend, commence participation in or terminate any collective bargaining agreement or other than capital expenditures made agreement with a labor union, works council or similar organization; or (K) terminate without cause the employment of any executive officer of the Company; or
(xvi) agree, authorize or commit to do any of the foregoing.
(c) After the date of this Agreement and prior to the Effective Time, Parent and its Subsidiaries shall not (x) acquire control (it being understood for the purposes of this Section 6.1(c) that obtaining the right to a board seat of a third party shall be deemed control) or (y) enter into an agreement, arrangement or understanding to acquire control of a third party in accordance with Section 5.01(b)(vNorth America that is in the grocery industry and operates physical retail stores if (i) and other than purchases and licenses such acquisition of film and television and production programming control or (includinii) entr
Appears in 2 contracts
Sources: Merger Agreement, Merger Agreement (Amazon Com Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the date of termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a4.1(a) of the Company Disclosure Letter, (3) as required by applicable Legal Requirements (including any applicable Covid-19 Measures that are Legal Requirements) or (4) as expressly required by this Agreement (including any action permitted by Section 4.21), the Company shall, and shall cause each of its the Company Subsidiaries to, use conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business in all material respects and in a manner consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable best efforts to maintain and preserve intact its business organization, keep available the Retained Business’ organization intact and services of key employees, maintain the Retained Business’ existing relations and goodwill satisfactory relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees distributors and business associates other commercial counterparties and others having maintain its material business dealings with the Retained Business assets and properties in their current condition (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers normal wear and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) tear excepted). Without limiting the generality of, and in furtherance of, the foregoing, during the Company covenants and agrees as to itself and its Subsidiaries that, period from and after the date of this Agreement and prior through the earlier of the Closing or the date of termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed as set forth in Section 5.01(b4.1(a) of the Company Disclosure Letter), (3) as required by applicable Legal Requirements or (4) as expressly required by this Agreement, the Company shall not (and shall not permit any of its Subsidiaries Company Subsidiary to:):
(i) amend the Company’s Organizational Documents or the Organizational Documents of any Company Subsidiary (except for immaterial amendments to the Organizational Documents of any Company Subsidiary which would not reasonably be expected to materially delay or prevent the consummation of the Closing or would reasonably be expected to adversely impact Parent and the Parent Subsidiaries);
(ii) split, combine, subdivide, amend the terms of or reclassify any shares of the Company’s capital stock or the capital stock of any Company Subsidiary (other than any wholly owned Company Subsidiary) (or any securities convertible into any of the foregoing);
(iii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) with respect to SpinCo and any shares of the SpinCo Subsidiaries Company’s capital stock or the capital stock of any Company Subsidiary, except for dividends or other distributions paid by any wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(iv) (A) form any Subsidiary that would constitute a Company Subsidiary, (B) make any capital contributions to, or investments in, any other Person (including any officer, director, Affiliate, agent or consultant of the Company or any Company Subsidiary) other than to wholly owned Company Subsidiaries that are not H▇▇▇▇▇ Satellite Systems Corporation or any “Restricted Subsidiary” under the Secured Indenture or the Unsecured Indenture or (C) acquire (by merger, consolidation, acquisition of stock or assets, formation of a joint venture or otherwise) (1) any other Person, (2) any equity interest in any other Person, (3) any business, or (4) any assets, except, in the case of clause (A)C), (A) amend its certificate of incorporation in one or bylaws (more transactions with respect to which the aggregate consideration for all such transactions does not exceed $5,000,000 and which would not reasonably be expected to materially delay or comparable governing documents) (other than amendments to prevent the governing documents of any Subsidiary consummation of the Company that would not preventClosing;
(v) issue, delay sell, grant or impair the Initial Merger otherwise permit to become outstanding any additional shares of, or the other Transactions)securities convertible or exchangeable for, (B) splitor options, combinewarrants or rights to acquire, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock or the capital stock of any Company Subsidiary, other than: (except for (1A) any dividends or distributions paid by shares of capital stock of a direct or indirect wholly owned Subsidiary of the Company issued to either the Company or another direct wholly owned Subsidiary of the Company; (B) shares of Company Common Stock issuable upon exercise of Company Options or indirect the vesting of Company RSU Awards outstanding on the date of this Agreement; (C) pursuant to the Company ESPP in accordance with the terms of this Agreement; and (D) shares of Company Class A Common Stock issuable upon conversion from other classes of Company Common Stock in accordance with the Company Articles.
(vi) except in a transaction solely between the Company and any wholly owned Subsidiary of the Company or solely among any wholly owned Subsidiaries of the Company, sell, assign, transfer, lease or license to any third party, or encumber (other than Company Permitted Encumbrances), or otherwise dispose of, any Company IP or any material assets of the Company Company, other than: (A) sales of inventory or of obsolete assets in the ordinary course of business; (2B) normal semiannual cash dividends pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth on the Common Stock as described in Section 5.01(b)(i4.1(a)(vi) of the Company Disclosure Letter), ; (C) non-exclusive licenses of Company IP granted in the ordinary course of business; or (D) enter into disposals of any agreement with respect immaterial Company Registered IP resulting from a cancellation, abandonment or failure to renew any immaterial Company Registered IP in the voting ordinary course of its capital stock, business;
(vii) directly or (E) purchase, indirectly repurchase, redeem or otherwise acquire any shares of its the Company’s capital stock stock, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable into or exercisable for any shares of its the Company’s capital stock stock, except: (other than (1A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the forfeiture ofexercise of repurchase rights binding on the Company and existing prior to the date of this Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of Company Options outstanding on the date of this Agreement pursuant to the applicable Company Equity Plan or for withholding Taxes incurred in connection with the exercise, vesting or withholding settlement of Taxes with respect toCompany Options and Company RSU Awards outstanding on the date of this Agreement, Company Restricted Stock Unitsas applicable, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement applicable award;
(viii) (A) incur any indebtedness for borrowed money, guarantee any such indebtedness, issue or as modified after the date of this Agreement in accordance with the terms of this Agreementsell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances to any other person; (2B) purchasesincur any Lien on any of its material property or assets, repurchasesexcept for Company Permitted Encumbrances; or (C) enter into any transactions that amend or otherwise alter available capacity under Section 4.7 of either the Unsecured Indenture or the Secured Indenture;
(ix) (A) adopt, redemptions terminate or materially amend any Company Plan or any collective bargaining or other acquisitions of securities labor agreement, (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any wholly owned Subsidiary director, independent contractor or employee of the Company by the Company or any Company Subsidiary, other wholly owned Subsidiary of than, (1) in the Company);
(ii) merge or consolidate with event the Closing has not occurred by March 1, 2024, increases in base salary to any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which such individuals who are not restricted thereby and other than mergers directors or consolidations of a Subsidiary officers of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan Subsidiary in the ordinary course of business consistent with past practice that does do not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except exceed 5% in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President aggregate and (2) employees at or above the level of Executive Vice President increases in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, connection with promotions permitted under clause (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (C) grant any rights to severance, retention, change in control or termination pay to any director, independent contractor or employee of the Company or any Company Subsidiary, (D) hire or promote any employee to a position with the Company or any Company Subsidiary with an annual rate of base salary in excess of $300,000 or a title of Senior Vice President or higher, or (E) commercial paper issued terminate the employment of any employee of the Company or any Company Subsidiary with an annual rate of base salary in excess of $300,000 or a title of Senior Vice President or higher (other than for cause), except for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; and (2) increases required pursuant to any Company Plan as in effect on the date of this Agreement;
(x) other than in the ordinary course of business consistent with past practice in a principal amount not (A) amend, supplement or otherwise modify or terminate any Material Contracts or waive, release or assign any material rights under any Material Contracts (except for (1) terminations pursuant to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion expiration of the Dividend existing term of any Material Contract and (and fees and expenses in connection therewith2) or for general corporate purposes; provided that extensions at the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations option of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness Company Subsidiary under the Bridge Facility, refinancings or replacements terms thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing exercised in the ordinary course of business consistent with past practice), or (B) enter into any Contract that, if in effect on the date of this Agreement, would constitute a Material Contract;
(vxi) change any of its methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP;
(xii) (A) make, change or revoke any material Tax election, (B) change or adopt any Tax accounting period or material method of Tax accounting, (C) amend any material Company Return, (D) settle or compromise any liability for material Taxes or any Tax audit, claim, or other proceeding relating to any material Taxes, (E) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar state, local or non-U.S. Legal Requirement), (F) request any Tax ruling from any Governmental Entity, (G) surrender any right to claim a refund of material Taxes or (H) extend or waive (other than automatically granted extensions and waivers) of the statute of limitations with respect to a material amount of Taxes;
(xiii) make any capital expenditure that is not contemplated by the capital expenditure budget set forth in Section 4.1(a)(xiii) of the Company Disclosure Letter (a “Company Non-Budgeted Capital Expenditure”), except that the Company or any Subsidiary of the Company may make any Company Non-Budgeted Capital Expenditure that, when added to all other Company Non-Budgeted Capital Expenditures made by the Company and the Company Subsidiaries since the date of this Agreement, would not exceed $5,000,000, individually, or $10,000,000, in the aggregate;
(xiv) convene any annual or special meeting (or any adjournment or postponement thereof) of the Company’s stockholders;
(xv) enter into any agreement, understanding or arrangement with respect to the Retained Businesssale or voting of its capital stock or other equity interests;
(xvi) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(xvii) commence, settle or compromise any litigation, claim, suit, action, proceeding or other Legal Proceeding, except for settlements or compromises that (A) involve solely monetary remedies and, in the case of settlements involving the payment of money by the Company or the Company Subsidiaries, have a value not in excess of $5,000,000 in the aggregate, (B) do not impose any material restriction on the Company’s business or the business of the Company Subsidiaries, (C) do not relate to any litigation, claim, suit, action, proceeding or other Legal Proceeding by the Company’s stockholders in connection with this Agreement or the Merger and (D) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary;
(xviii) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xix) amend, terminate or allow to lapse any Company Permits in a manner that adversely impacts the Company’s ability to conduct its business in any material respect;
(xx) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to the Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company IP or agreements pursuant to which the Company or any Company Subsidiary licenses or obtains the right to use any Intellectual Property, other than with respect to acquisitions any abandonment of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties any Company Registered IP at the end of the applicable statutory term or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) otherwise in the ordinary course of business consistent with past practice and practice, or (B) disclose to any third party any Trade Secret included in the aggregate not Company IP, other than pursuant to a non-disclosure agreement restricting the disclosure and use of such Trade Secret, or in excess connection with any regulatory filing or any publication of 120% any patent application;
(xxi) except in the ordinary course of business, enter into any Contract under which the Company or any Company Subsidiary grants or agrees to grant any right, or agrees to pay any royalties or similar obligations, with respect to any Intellectual Property;
(xxii) enter into any material new line of business or line of business of any kind competitive with Parent and the Parent Subsidiaries;
(xxiii) take any action, or knowingly fail to take any action, which action or failure to act could be reasonably expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the amounts reflected Code; or
(xxiv) authorize, enter into any Contract or make any commitment to do any of the foregoing.
(b) P▇▇▇▇▇ agrees that, during the period from the date of this Agreement through the earlier of the Closing or the date of termination of this Agreement, except (1) to the extent the Company shall otherwise give its prior consent in the Company’s capital expenditure budget for each of 2017writing (such consent not to be unreasonably withheld, 2018 and 2019 conditioned or delayed), (2) as set forth in Section 5.01(b)(v4.1(b) of the Company Parent Disclosure Letter;
, (vi3) with respect to as required by applicable Legal Requirements (including any applicable Covid-19 Measures that are Legal Requirements) or (4) as expressly required by this Agreement (including the Retained BusinessLLC Conversion or any other action permitted by Section 4.12 or Section 4.21), transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonmentParent shall, and cancellationsshall cause the Parent Subsidiaries to, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not conduct its business in the ordinary course in all material respects and in a manner consistent with past practice, and use reasonable best efforts to maintain and preserve intact its business organization, maintain satisfactory relationships with Governmental Entities, customers, suppliers, distributors and other commercial counterparties and maintain its material assets and properties in their current condition (normal wear and tear excepted). Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or $75,000,000 individually in any event the date of termination of this Agreement, except (other than transactions among 1) to the extent the Company and shall otherwise give its wholly owned Retained Subsidiariesprior consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (D2) licensesas set forth in Section 4.1(b) of the Parent Disclosure Letter, sales(3) as required by applicable Legal Requirements or (4) as expressly required by this Agreement, letting lapse, abandonment Parent shall not (and cancellations shall not permit any Parent Subsidiary to):
(i) amend Parent’s Organizational Documents in any manner which would reasonably be expected to materially delay or prevent the consummation of Intellectual Property that is used the Closing or held for use exclusively would be adverse in any material respect to the SpinCo Business and (E) Affiliation Agreementsholders of Company Class A Common Stock relative to holders of Parent Class A Common Stock;
(viiii) with respect to split, combine, subdivide, amend the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon terms of or otherwise dispose reclassify any shares of any properties the Parent’s capital stock or assets (including the capital stock of any of its Retained Subsidiaries but not including Parent Subsidiary (other than any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for wholly owned Parent Subsidiary) (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible into or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viiiforegoing);
(ixiii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) with respect to any shares of Parent’s capital stock or the Retained Businesscapital stock of any Parent Subsidiary, except for dividends or other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect distributions paid by any wholly owned Parent Subsidiary to film and television production and programming Parent or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactionsanother wholly owned Parent Subsidiary;
(xiv) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses directly or indirectly repurchase, redeem or otherwise acquire any shares of film and television and production programming Parent Common Stock (includinexcluding, for clarity, securities convertible
Appears in 2 contracts
Sources: Merger Agreement (EchoStar CORP), Merger Agreement (DISH Network CORP)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement until the earlier of the Gulf Effective Time and prior the termination of this Agreement pursuant to Article VIII, the Company shall, and shall cause each of its Subsidiaries to, conduct their respective businesses in the Ordinary Course and, to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business associates and others having material significant business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) them and keep available the services of the Company its and its Subsidiaries’ present officers, employees and agents.
, except, in each case, as otherwise expressly contemplated by this Agreement, as required by applicable Law, or otherwise approved in writing by Parent (b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed). Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the earlier of the Gulf Effective Time and which determination shall take into account the Company Overview Presentationtermination of this Agreement pursuant to Article VIII, and except as otherwise expressly (1A) contemplated by this Agreement, (B) required by applicable Law, (2C) expressly as approved in writing by Parent (which approval shall not be unreasonably withheld, conditioned or delayed), (D) required by the Transaction Documents (including in connection with the Separation and the Distribution) under any Material Contract or (3E) otherwise expressly disclosed set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets from any other Person with a fair market value or purchase price in excess of $500,000 individually or $1,000,000 in the aggregate in any transaction or series of related transactions, in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company or Parent, as applicable, to consummate the Transactions prior to the Outside Date;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case of clause (A)), (A) amend the F▇▇▇▇▇▇▇ Agreement or (B) the issuance of shares (i) by its certificate wholly owned Subsidiary to it or another of incorporation its wholly owned Subsidiaries, (ii) in respect of Company RSUs outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Company Stock Plan as in effect on the date of this Agreement or bylaws (iii) in connection with the exercise of warrants outstanding as of the date of this Agreement, or comparable governing documentssecurities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance having a value in excess of $200,000 individually or $500,000 in the aggregate on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than amendments to the governing documents of any Subsidiary of or from the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify and any of its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary Subsidiaries or to or from Parent and any of the Company which remains a its wholly owned Subsidiary after consummation Subsidiaries, as applicable) in excess of such transaction), $200,000 individually or $500,000 in the aggregate;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary);
(viii) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, shares of Company Restricted Common Stock Units, to satisfy withholding Tax obligations upon the vesting or settlement of Company Deferred Stock Units or Company Performance Stock Units, in each case RSUs outstanding as of the date of this Agreement in accordance with past practice and with the their terms of and, as applicable, the Company Stock Plans Plan as in effect on the date of this Agreement Agreement;
(ix) incur any Indebtedness (including the issuance of any debt securities, warrants or as modified after other rights to acquire any debt security), except for (A) Indebtedness for borrowed money incurred in the Ordinary Course not to exceed $200,000 individually or $500,000 in the aggregate, or (B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced;
(x) except to the extent expressly provided by, and consistent with the line items set forth in, the Company’s capital budget set forth in Section 6.1(a)(x) of the Company Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures;
(xi) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement or amend or modify in any material respect, supplement, waive any material term, terminate, assign, convey, encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Company Material Contract, other than expirations of any such Contract in the Ordinary Course in accordance with the terms of this Agreementsuch Contract;
(xii) cancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries having in each case a value in excess of $200,000 individually or $500,000 in the aggregate;
(2xiii) purchases, repurchases, redemptions settle any Proceeding for an amount in excess of $200,000 individually or other acquisitions $500,000 in the aggregate or any obligation or liability of securities it in excess of such amount or on a basis that would result in the imposition of any wholly owned Subsidiary Governmental Order that would restrict the future activity or conduct of it or any of its Subsidiaries in any material respect or a finding or admission of a material violation of Law or material violation of the rights of any Person;
(xiv) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or applicable Law;
(xv) enter into any line of business in any geographic area, other than the existing lines of business of the Company by and its Subsidiaries solely within the United States;
(xvi) materially modify, cancel, terminate, rescind or adversely affect any Company Material License;
(xvii) other than in the Ordinary Course, make, change or revoke any material Tax election, change any annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return in respect of material Taxes, enter into any closing agreement with respect to Taxes or settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a material refund, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax, or take any other action with respect to Taxes which is reasonably likely to result in a material increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any other wholly owned Subsidiary taxable period (or portion thereof) ending after the Closing Date, the Tax liability of the Company)Parent or its Affiliates;
(iixviii) merge transfer, sell, lease, divest, cancel or consolidate with any other Personotherwise dispose of, or restructure, reorganize permit or completely or partially liquidate (other than transactions suffer to exist the creation of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation ofany Encumbrance upon, any wholly owned Subsidiaries of the Company that would not preventassets (tangible or intangible), materially delay product lines or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider businesses of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee including capital stock of the Company or and any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests services provided in connection with the production or financing of film Ordinary Course and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company obsolete assets and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or tangible assets (excluding capital stock of the Retained Subsidiariesnot including services) with a fair market value not in excess of $50,000,000 200,000 individually if the transaction is not or $500,000 in the ordinary course aggregate;
(xix) cancel, abandon or $100,000,000 individually otherwise allow to lapse or expire any material Company Intellectual Property Rights that are Registered;
(xx) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or in the Ordinary Course, (A) increase the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any event or Company Employee, (B) transactions among become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company and Benefit Plan, (D) take any action to accelerate the Retained Subsidiariesvesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (E) forgive any loans or issue any loans (other than routine travel advances issued in the Ordinary Course) to any Company Employee or (F) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of $250,000;
(viiixxi) except become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xxii) utilize government borrowing, grant programs, or social insurance programs, such as the CARES Act, in each case related to the COVID-19 pandemic;
(xxiii) make or authorize any payment or spending, or accrual or commitment for any payment or spending (including payment or spending with respect to SpinCo advertising and marketing activities), in connection with entering into any new geographic area or new line of business;
(xxiv) apply or seek to apply for any license that, if granted, would be reasonably expected to be a Company Material License had it been granted prior to date of this Agreement; or
(xxv) agree, authorize or commit to do any of the foregoing. Notwithstanding the foregoing, any action or inaction taken by the Company or any of its Subsidiaries, to the extent required by applicable Law, directive, guidelines or recommendations, to address the COVID-19 pandemic (including, to the extent required by applicable Law, compliance with any quarantine, “shelter in place,” “stay at home,” social distancing, shut down, closure, sequester, safety, or similar Law, directive, guidelines or recommendations promulgated by any Governmental Entity, including the Centers for Disease Control that is outside of the Ordinary Course shall not be deemed to be a breach of this Section 6.1, provided that the Company consults with Parent prior to taking any such action.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement until the earlier of the Gulf Effective Time and the SpinCo Subsidiariestermination of this Agreement pursuant to Article VIII (unless the Company shall otherwise approve in writing (which approval shall not be unreasonably withheld, issueconditioned or delayed)), deliverexcept as otherwise expressly (A) contemplated by this Agreement, sell(B) required by applicable Law, grant(C) required under Contracts to which Parent or any of its Subsidiaries is a party or (D) set forth on Section 6.1(b) of the Parent Disclosure Letter, transferParent shall not, and shall cause its Subsidiaries not to:
(i) adopt or propose any change in Parent’s Organizational Documents in any manner that would prohibit the consummation of the Transactions; provided, that any amendment to Parent’s articles of incorporation to increase the authorized number of shares or series of the capital stock of Parent shall in no way be restricted by the foregoing;
(ii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary to it or to any other direct or indirect wholly owned Subsidiary);
(iii) split, combine, reduce or reclassify any of its issued or unissued shares of its capital stock, or encumber, issue or authorize the issuanceissuance of any other securities in respect of, delivery, sale, grant, transfer in lieu of or encumbrance ofin substitution for, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided manner that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair to have a material and adverse impact on the consummation value of the Transactions;Parent Class A Common Stock; or
(xiv) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent or the Company, directly or indirectly, the right to control or direct the other than capital expenditures made Party’s operations prior to the Gulf Effective Time. Prior to the Gulf Effective Time, each Party will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations. Notwithstanding anything in accordance this Agreement to the contrary, no consent of Parent or the Company shall be required with respect to any matter set forth in this Section 5.01(b)(v) and other than purchases and licenses 6.1 or elsewhere in this Agreement to the extent that the requirement of film and television and production programming (includinsuch consent would, upon the advice of legal counsel, violate applicable Antitrust Law.
Appears in 2 contracts
Sources: Merger Agreement (DraftKings Inc.), Merger Agreement (Golden Nugget Online Gaming, Inc.)
Interim Operations. (a) The From the date of this Agreement until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company covenants and agrees as to itself and each of its Subsidiaries thatthat it will use its commercially reasonable efforts, from and after the execution date of this Agreement and prior to until the First Effective Time (Time, unless Parent shall otherwise approve in writing, which approval to cause the business of it and its Subsidiaries to be conducted, in all material respects, in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall not be unreasonably withhelduse their respective commercially reasonable efforts to (a) preserve their business organizations, conditioned or delayed, assets and except as (1) required by applicable Lawlines of business intact, (2b) expressly required maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations that are material to the Company and its Subsidiaries, taken as a whole, (c) maintain all leases and all personal property (reasonable wear and tear excepted) that are material to the Company and its Subsidiaries, taken as a whole, used by the Transaction Documents (including in connection with the Separation Company and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts and necessary to conduct the Retained Business its business in the ordinary course of business consistent with past practicepractice (but with no obligation to renew or extend any lease or to otherwise exercise any rights or options it may have under any lease, including but not limited to rights to purchase or increase or decrease its current properties) and the Company shall, (d) maintain in all material respects its and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ their existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement in accordance with its terms, except (unless A) as otherwise expressly required by this Agreement, (B) as Parent shall otherwise approve may consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable LawLaws or definitive interpretations thereof or by any Governmental Entity, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b) 4.1 of the Company Disclosure Letter), the Company shall not will not, and shall will not permit any of its Subsidiaries Subsidiaries, to:
(i) except with respect adopt any amendments to SpinCo and the SpinCo Subsidiaries (other than its charter or bylaws or, in the case of clause any Subsidiary that is not a corporation, similar applicable organizational documents;
(A)), ii) (A) amend its certificate adopt a plan of incorporation complete or bylaws (partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or comparable governing documents) other reorganization (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactionsthis Agreement), (B) splitacquire by merging or consolidating with, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary purchasing an equity interest in or portion of the Company which remains a wholly owned Subsidiary after consummation assets of such transaction(other than as set forth in Section 4.1(iii)), or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, (C) declaretake or omit to take any action that would cause any rights under Material Intellectual Property, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement including with respect to the voting of its capital stockany registrations or applications for registration, to lapse, be abandoned or cancelled, or (E) purchasefall into the public domain, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, actions or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan omissions in the ordinary course of business consistent with past practice that does and not materially increase the cost otherwise in violation of such Company Plan this Section 4.1, or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance enter into a joint venture or termination payments partnership or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equitysimilar third-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesparty business enterprise;
(iviii) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtednessassets or capital stock from any other Person, except (A) in the ordinary course other than acquisitions of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing assets in the ordinary course of business consistent with past practice;
(viv) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, licenseissue, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sellof, grant, transfer, or encumber, or authorize the issuance, deliverysale, salepledge, disposition, grant, transfer or encumbrance of, any shares of its capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options and the settlement of RSU Awards and PSU Awards (and dividend equivalents thereon, if applicable) outstanding on the date of this Agreement or (B) the issuance of shares of capital stock by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company or (C) the issuance, sale, pledge, disposition of, grant, transfer, encumbrance, or authorization of the issuance, sale, pledge, disposition, grant, transfer or encumbrance of capital stock of any Subsidiary of the Company in connection with financing arrangements not restricted under this Agreement) or securities convertible or exchangeable into or exercisable forfor any shares of such capital stock, or any options, warrants or other rights of any kind to acquireacquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(v) other than trade credit or otherwise in an amount not to exceed $5,000,000 in the aggregate, in each case, in the ordinary course of business, make any such sharesloans, except advances or capital contributions to or investments in any Person;
(vi) (A) declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or other property, with respect to its capital stock, except for dividends by any wholly owned direct or indirect Subsidiary of the Company to the Company or any other wholly owned direct or indirect Subsidiary of the Company, (B) split, combine or reclassify the Shares issued pursuant or any other outstanding capital stock of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution therefor, (C) redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of the Company, except for acquisitions, or deemed acquisitions, of Shares or other equity securities of the Company in connection with (1) the satisfaction of Tax withholding obligations with respect to Company Restricted Stock UnitsOptions, RSU Awards or PSU Awards outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Performance Stock Units and Company Deferred Stock Units Options outstanding on the date of this Agreement with Shares (including in accordance connection with “net exercises”) and (3) forfeitures of Company Options, RSU Awards or PSU Awards outstanding on the existing date of this Agreement, in the case of each of (1), (2) and (3), pursuant to their terms as in effect on the date of this Agreement, and except for acquisitions or deemed acquisitions of Shares or other equity securities of the Company or any of its wholly owned Subsidiaries by the Company or any of its wholly owned Subsidiaries, or (D) enter into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of the Company’s capital stock or other Rights of the Company or any of its Subsidiaries; provided that nothing contained herein shall prohibit dividends and distributions paid or made on a pro rata basis by direct or indirect Subsidiaries of the Company in the ordinary course consistent with past practice;
(vii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for any Indebtedness or otherwise modify the terms of such awards and any Indebtedness, other than Indebtedness incurred under existing revolving credit facilities of the Company Stock Plansfor working capital purposes in the ordinary course of business in an amount not to exceed $150,000,000 in the aggregate (provided that Parent’s prior written consent shall be required in respect of any incremental incurrence of Indebtedness thereunder in excess of $5,000,000). “Indebtedness” of any Person means (A) all indebtedness for borrowed money, (B) Investment Preferred Stock (as defined in the Bridge Facility) any other indebtedness which is evidenced by a note, bond, indenture, debenture or similar Contract, (C) by wholly owned Subsidiaries all capitalized lease obligations of such Person or obligations of such Person to pay the Company or to any other wholly owned Subsidiary deferred and unpaid purchase price of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Businessproperty and equipment, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not trade payables incurred in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any of business, whether by merger(D) all obligations of such Person pursuant to securitization or factoring programs or arrangements, consolidation(E) all guarantees and arrangements having the economic effect of a guarantee of such Person of any other Indebtedness of any other Person, purchase (F) net cash payment obligations of property such Person under swaps, options, derivatives and other hedging agreements or assets, licenses or otherwise arrangements that will be payable upon termination thereof (valuing any non-cash consideration at its fair market value as of assuming they were terminated on the date of the agreement for determination), and (G) reimbursement obligations under (i) letters of credit, bank guarantees and other similar contractual obligations entered into by or on behalf of such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldPerson or (ii) surety, customs, reclamation or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) performance bonds other than capital expenditures made those entered into in accordance the ordinary course of business consistent with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinpast practice;
Appears in 2 contracts
Sources: Merger Agreement (QXO, Inc.), Merger Agreement (QXO, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, that from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) business of the Company Disclosure Letter)and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their commercially reasonable efforts to preserve the Retained Business’ organization their respective business organizations intact and to maintain the Retained Business’ their existing relations and goodwill with Governmental Entities, customers, suppliers, regulators, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providersunless Parent shall otherwise approve in writing (which approval will not be unreasonably withheld or delayed)), studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersexcept as otherwise expressly contemplated by this Agreement or disclosed in Section 6.1(a) and keep available the services of the Company Disclosure Letter, except as required by applicable Law and its Subsidiaries’ present employees except that this sentence shall not prohibit actions or omissions that would be prohibited by clauses (i) through (xv) of the following sentence but are not so prohibited because they are within the applicable exceptions and agents.
(b) Without limiting the generality of, and permissions of such clauses or are approved by Parent in furtherance of, the foregoingwriting as provided therein. In addition, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing (which approval shall will not be unreasonably withheld, conditioned withheld or delayed)), and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly contemplated by this Agreement or disclosed in Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries toexcept as required by applicable Law:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), Company shall not (A) amend its certificate articles of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), bylaws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual other than regular quarterly cash dividends on the Common Stock as described Company Shares approved by the Company’s board of directors and in Section 5.01(b)(i) of the Company Disclosure Letter), an amount which is consistent with past practice; or (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire or permit any of the Company’s Subsidiaries to purchase or otherwise acquire any shares of the Company’s or any of its Subsidiaries’ capital stock or any securities convertible into or exchangeable into or exercisable for any shares of its such capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)stock;
(ii) neither the Company nor any of its Subsidiaries shall merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than except for any such transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly among wholly-owned Subsidiaries of the Company that would not prevent(or the Company and its wholly-owned Subsidiaries), materially delay or materially impair the Transactions)adopt a plan of liquidation, dissolution, restructuring, recapitalization or other reorganization;
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into take any such transaction action that would, or would reasonably be expected to, prevent, materially delay or materially impair prevent the consummation Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the TransactionsCode;
(iv) neither the Company 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) 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 directors, 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 the Company (w) institute a broad based change in compensation, (x) other than capital expenditures increase or institute any new employment agreement, severance, retention, or similar benefits, (y) increase or institute any transaction or deal bonus with respect to the Merger which could result in payments upon the Merger, or (z) make grants or awards of Company Options, Company Restricted Stock or Company Awards, unless such grants or awards are consistent with past practice, approved in advance by Parent (such approval not to be unreasonably withheld or delayed), made subject to the condition, in accordance the case of grants or awards of Company Restricted Stock, that the proposed recipient provide the Company with an irrevocable Election and agreement to receive only Stock Consideration (and the right, if any, to receive cash in lieu of fractional shares pursuant to Section 4.3(h)) in the Merger, and contain a 5-year vesting schedule that will not accelerate as a result of the Merger, (B) for actions necessary to satisfy existing contractual obligations under Company Compensation and Benefit Plans existing as of the date of this Agreement, or (C) to comply with Section 5.01(b)(v) and other than purchases and licenses 409A of film and television and production programming (includinthe Code;
Appears in 1 contract
Sources: Merger Agreement (Equifax Inc)
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries thatrequired by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or conditioned), (iv) as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, or (v) to the extent necessary to comply with the obligations set forth in any Contract to which the Company or any of its Subsidiaries is a party in effect on the date of the Agreement, from the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will, and will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course of business and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and to maintain the Retained Business’ existing relations and goodwill relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees licensees and business associates and others other Persons having material business dealings relationships with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agentsit.
(b) Without limiting the generality ofExcept as required or expressly contemplated by this Agreement, and in furtherance of, the foregoing, the Company covenants and agrees (w) as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2x) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld, delayed or conditioned), (y) or (3) otherwise expressly disclosed in as set forth on Section 5.01(b6.1(b) of the Company Disclosure Letter)Schedule, or (z) to the extent necessary to comply with the obligations set forth in any Material Contract to which the Company shall not and shall not permit or any of its Subsidiaries is a party in effect on the date of this Agreement, from the date of this Agreement until earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than amend or adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary Organizational Documents of the Company that would not preventor its Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, delay or impair restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the Initial Merger assets, operations or business of the other Transactions)Company or any of its Subsidiaries;
(iii) issue, (B) splitgrant, combinesell, subdivide pledge, dispose of or reclassify its outstanding encumber, or authorize the issuance, grant, sale, pledge, disposition or encumbrance of, any shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any issuance, sale, grant or transfer of Shares pursuant to exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms in effect on the date hereof, and (B) incurrence of any Permitted Liens;
(iv) make any loans, advances or capital contributions to any Person in excess of $25,000 individually or $100,000 in the aggregate (other than (A) to the Company or any of its wholly owned Subsidiary after consummation Subsidiaries, and (B) in connection with capital leases and extensions of such transactioncredit terms to customers in each case in the ordinary course of business);
(v) other than the July Dividend, (C) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise with respect to any combination thereof) in respect of any shares of its capital stock (stock, except for (1) any dividends or other distributions paid by a direct or indirect any wholly owned Subsidiary of the Company to another direct the Company or indirect to any other wholly owned Subsidiary of the Company Company;
(vi) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (except for (A) any such transaction by a wholly owned Subsidiary of the Company and (B) acquisitions of Shares in connection with withholding in respect of Company Equity Awards), or payment of the exercise price in respect of Company Options, in each case, outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement;
(vii) create, incur, assume or guarantee any Indebtedness for borrowed money, letters of credit or guarantees of the same, except for (A) borrowings under the Company Credit Agreement (as in effect as of the date hereof or as amended, restated, modified, supplemented or refinanced in accordance with this Agreement), (B) letters of credit, guarantees or credit support provided by the Company or any of its Subsidiaries in the ordinary course of business, (C) any Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, and (D) any capital leases entered into in the ordinary course of business;
(viii) incur or commit to any capital expenditure or expenditures other than in the ordinary course of business;
(ix) other than in the ordinary course of business or in connection with any matter to the extent such matter is permitted by any other clause of this Section 6.1(b), (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (B) amend or terminate any Material Contract in a manner adverse to the Company (other than expirations of any such Material Contract in accordance with its terms) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries under any Material Contract;
(x) make any changes with respect to financial accounting policies or procedures (other than immaterial changes in the ordinary course of business), except as required by Law or by U.S. GAAP or policy, rules or interpretations with respect thereto by any Governmental Authority or quasi-Governmental Authority with jurisdiction over the Company or its Subsidiaries;
(xi) settle or offer to settle any Action, other than any Tax claim, notice, audit, investigation, assessment or other proceeding with respect to Taxes (which shall be governed by clause (xvii)), for an amount in excess of $500,000 individually or $1,000,000 in the aggregate, other than any settlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered and paid by insurance coverage maintained by the Company or any of its Subsidiaries;
(xii) sell, acquire, lease or sublease any material assets or properties (including any material real property, but other than Owned Intellectual Property which instead is the subject of Section 6.1(b)(xiii) below) other than (1i) in the ordinary course of business, (ii) in replacement of existing assets or properties, (iii) (A) substantially in accordance with the Company’s operating budget for fiscal year 2024 provided to Parent prior to the date hereof, or (B) in accordance with the Company’s operating budget for fiscal year 2025, (iv) acquisitions or sales of inventory, (v) disposals of property at the end of its useful life or disposals of obsolete or expired property, or (vi) sales, acquisitions, leases or subleases between or among the Company and any of its Subsidiaries;
(xiii) sell, assign, transfer, license, abandon, cancel, permit to lapse, pledge, encumber, fail to renew, maintain or pursue filed applications for or otherwise dispose of any material Owned Intellectual Property, other than (A) the grant of non-exclusive licenses in the ordinary course of business, (B) to customers or suppliers in their capacity(ies) as such (x) in the ordinary course of business or (y) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms any Material Contract existing as of the Company Stock date of this Agreement or (C) when in the Company’s reasonable business judgment, the benefits of retaining such Owned Intellectual Property are outweighed by the burdens of doing so;
(xiv) except as required by Benefit Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishincrease the amount or accelerate the vesting, adoptpayment or funding of the compensation or other benefits payable or provided to the Company’s or any of its Subsidiaries’ current or former officers, amend directors, individual service providers or terminate any material Company Plan or amend the terms of any outstanding equity-based awards employees, other than any such action taken for purposes of replacing, renewing increases in compensation or extending a broadly applicable material Company Plan benefits in the ordinary course of business consistent with past practice that does respect to employees at the level of Vice President or below and not materially exceeding a year-over-year increase of 3% in the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, aggregate; (B) grant or provide enter into any transaction cash or equity or equity-based incentive, bonus, employment, change of control, severance or retention bonuses to agreement with any current or former officer, director, officer, employee or other individual service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries; (C) establish, except adopt, enter into or amend any collective bargaining agreement, Benefit Plan or arrangement that would be a Benefit Plan if in effect on the ordinary course date of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at this Agreement; or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting vesting, funding or payment of compensation any compensatory arrangement;
(xv) negotiate or benefits under enter into any Company Plan (including Labor Agreement or recognize or certify any equity-based awards)labor union, (F) change labor organization, works council or group of employees as the bargaining representatives for any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(ivxvi) incur acquire any Indebtedness capital stock in, or issue any warrants business line or all or a material portion of the assets constituting any business, corporation, partnership, association, joint venture, or other rights to acquire entity or other business organization in any Indebtednesstransaction that involves consideration valued in excess of $500,000, individually or $1,000,000 in the aggregate (including any earn-out payments or other deferred or contingent consideration payable in connection with any such transaction), including by merger, consolidation, purchase of stock or assets or otherwise, except for (A) transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries, or (B) acquisitions of assets or inventory in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, business;
(xvii) other than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practicebusiness, make, revoke or change any material Tax election, make any material change to any annual Tax accounting period, adopt or change any material method of Tax accounting, amend any material Tax Returns or file any claims for material Tax refunds, waive or extend any statute of limitations in respect of a period within which an assessment or reassessment of material Taxes may be issued (E) commercial paper issued other than any extension pursuant to an extension to file any Tax Return obtained in the ordinary course of business consistent with past practice in business), enter into any material closing agreement, enter into a principal amount not Tax sharing agreement, Tax indemnification agreement, Tax allocation agreement or similar contract or arrangement, settle any material Tax claim, audit or assessment or surrender any right to exceed $250,000,000 in the aggregate at any time outstandingclaim a material (x) Tax refund, (Fy) Indebtednessoffset or (z) other reduction in Tax liability;
(xviii) license, the proceeds of which will be used to finance all escrow, or otherwise grant any portion of the Dividend (and fees and expenses in connection therewith) rights to, any material Owned Source Code or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at disclose any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of material trade secrets owned or processed by the Company or any of its Subsidiaries (except to customers or service providers of, or Persons with respect to such Indebtedness (and Parent and its Subsidiariesprofessional, including, following the Distributionbusiness or commercial relationships with, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings Company or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement Subsidiaries in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior subject to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceconfidentiality obligations);
(vxix) with respect adopt or enter into a plan of complete or partial liquidation or dissolution or voluntarily file for bankruptcy or similar proceeding;
(xx) fail to use reasonable efforts to keep in full force and effect insurance comparable in amount and scope to coverage currently maintained;
(xxi) take any action, or knowingly fail to take any action, where such action or failure to act would reasonably be expected to prevent the Retained BusinessMerger and any other transactions contemplated by this Agreement from qualifying for the Intended Tax Treatment; or
(xxii) agree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;foregoing.
(vic) with respect Subject to the Retained Businessterms of this Agreement, transferincluding Section 6.5 and Section 6.13, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with and prior to the existing terms Effective Time, none of such awards and Parent, Merger Sub, the Company Stock Plans, (B) Investment Preferred Stock (as defined in Rollover Stockholders or the Bridge Facility) Equity Investors shall take or (C) by wholly owned permit any of their respective Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable enter into or exercisable for, or any options, warrants or other rights agree to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction agreement that would, or would reasonably be expected to, to prevent, materially delay impair or materially impair delay the consummation of the Transactions;Merger or the satisfaction of any of the closing conditions thereto.
(xd) other than capital expenditures made Nothing contained in accordance this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. 6.1.1 PSI shall, and PSI shall cause Phoenix to: (a) The Company covenants carry on its business only in the Ordinary Course of Business substantially the same manner as heretofore conducted; (b) except as they may expire or be terminated by any other party thereto, keep in full force and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayedeffect, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) not cause a default of the Company Disclosure Letter), the Company shall, and shall cause each any of its Subsidiaries toobligations under, use its reasonable best efforts to conduct any PSI Commitments; (c) keep in full force and effect the Retained Business insurance coverage in effect on the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely date hereof to the extent related that such insurance continues to the Retained Businessbe reasonably available; (d) maintain, subject to compliance with the specific matters set forth belowrenew, keep in full force and effect and preserve its business organization and material rights and Licenses and use commercially reasonable efforts to preserve the Retained Business’ organization intact (i) retain its present employee force and (ii) maintain its existing, or substantially equivalent, relationships with others having business relations with it and to use commercially reasonable efforts to maintain the Retained Business’ existing relations continuance of its general customer and goodwill supplier relationships; and (e) duly comply with Governmental Entitiesall Laws applicable to it and to the conduct of its business, customersexcept where the failure to so comply would not, suppliersindividually or in the aggregate, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings have a PSI Material Adverse Effect.
6.1.2 Except with the Retained Business (including material content providersprior written consent of IVAX or as otherwise required or permitted by this Agreement or as contemplated by Schedule 6.1, studiosPSI shall not, authorsand PSI shall cause Phoenix to not, producersdirectly or indirectly, directors, actors, performers, guilds, announcers and advertisers) and keep available the services do any of the Company and its Subsidiaries’ present employees and agents.
following: (ba) Without limiting the generality ofvoluntarily or involuntarily sell, and in furtherance oftransfer, the foregoingsurrender, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date abandon or dispose of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
properties, assets or rights (itangible or intangible) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case Ordinary Course of clause Business or disclose any material proprietary or confidential information to any third party not a party to a written confidentiality agreement with or otherwise under an obligation of confidentiality to PSI or Phoenix; (A)b) make any mortgage or pledge or subject itself or its properties or assets to any Lien, except for the Lien of current Taxes or assessments not yet delinquent, Liens and deposits (including mechanics’, materialmen’s and other similar Liens) arising in the Ordinary Course of Business securing amounts not yet due and payable; (c) enter into or materially amend any Contract except in the Ordinary Course of Business; (d) grant any increase in the compensation payable or to become payable to officers or employees (including, without limitation, any such increase pursuant to any bonus, pension, profit-sharing plan or other PSI Plan or commitment), except in the Ordinary Course of Business or pursuant to the provisions of existing obligations; (Ae) incur, assume or take any property subject to any liability, except in the Ordinary Course of Business; (f) alter the manner of keeping its books, accounts or records, or change in any manner the accounting practices therein reflected, other than alterations or changes required by GAAP or applicable Law; (g) dispose of or permit a lapse (to the extent that such lapse is reasonably preventable) of any rights to any material intangible personal property, including, without limitation, Intellectual Property, other than in the Ordinary Course of Business; (h) amend its certificate Certificate of incorporation Incorporation or bylaws Bylaws; (i) expend or comparable governing documentscommit to expend funds for capital additions in excess of fifty thousand dollars ($50,000) that is not reflected in either the 2004 or 2005 Capital Additions Budgets previously made available to IVAX or its representatives; (other than amendments to j) adopt or amend any PSI Plan; (k) cancel, waive or release any debts, rights or claims, except in the governing documents Ordinary Course of Business, but in no event in excess of two hundred fifty thousand dollars ($250,000); (l) write off the value of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (inventory or any combination thereof) accounts receivable or increase the reserves for obsolete, damaged, spoiled or otherwise not useable inventory or uncollectible receivables, except in respect of any shares of its capital stock accordance with GAAP; (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (Dm) enter into any agreement indemnification, severance, employment or consulting Contract with respect to any Person who is not a current officer, employee or consultant of PSI or Phoenix other than in the voting Ordinary Course of its capital stockBusiness, or (E) purchaseenter into any indemnification, repurchaseseverance, redeem employment or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate consulting Contract with any other Personcurrent officer, employee or restructure, reorganize consultant of PSI or completely or partially liquidate Phoenix; (n) enter into any transaction with an Affiliate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which with customers and suppliers who are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or Affiliates entered into in the ordinary course Ordinary Course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all Business for goods or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or services on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not at prices customary for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) arm’s-length transactions with third parties for such goods and services); (o) issue, sell or video game productionauthorize for issuance or sale, which is subject to Section 5.01(b)(x)shares of any class or series of its securities (including, make without limitation, by way of stock split or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000dividend) or any subscriptions, options, warrants, rights or convertible securities or enter into any agreements or commitments of any character obligating it to issue or sell any such securities; (Bp) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017redeem, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon purchase or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses acquire, directly or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance ofindirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable foroption, or any options, warrants warrant or other rights right to acquire, purchase or acquire any such shares; (q) declare or pay any dividend or other distribution (whether in cash, except stock or other property) with respect to its capital stock (Aother than the quarterly dividend on the PSI ▇▇ ▇▇▇▇ A Preferred Stock and the PSI Series B Preferred Stock that shall continue to accrue in accordance with the terms of PSI’s Certificate of Incorporation but shall not be paid in cash); (r) for any Shares issued pursuant to Company Restricted Stock Unitsother than in the Ordinary Course of Business, Company Performance Stock Units and Company Deferred Stock Units outstanding enter into a new Contract, which if in existence on the date of this Agreement would have been at forth on Schedule 3.28.1 as a PSI Commitment, or amend, terminate or elect not to renew any PSI Commitment; (s) except as permitted by this Section 6.1.2, take or omit to take any action which would render any of PSI’s or Phoenix’s representations or warranties materially untrue or misleading, which would be a material breach or violation of any of PSI’s or Phoenix’s covenants or which would render the satisfaction of any condition to the Closing impossible; (t) take any action which results or could reasonably be expected to result in accordance a PSI Material Adverse Effect; or (u) agree, whether in writing or otherwise, to do any of the foregoing. In addition, neither PSI nor Phoenix shall incur or pay expenses for professional services performed prior to the Closing in connection with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) transactions contemplated by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend Agreement in excess of (A) an aggregate of $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin575,000.
Appears in 1 contract
Sources: Stock Purchase Agreement
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Law or as contemplated expressly provided by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoingthis Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time Acceptance Time, the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary and usual course and it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the material components of their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, clients, suppliers, licensees, licensors, partners, creditors and lessors, key employees and independent contractors, material service providers, agents and business associates and other Persons with which it or any of its Subsidiaries has significant business relations and keep available the services of its and its Subsidiaries’ present officers and key employees and independent contractors; provided, however, that the Company and its Subsidiaries shall be under no obligation to and shall not, without Parent’s prior written consent, put in place any new retention programs or include additional personnel in any existing retention programs. Without limiting the generality of the immediately preceding sentence, from the date of this Agreement until the Acceptance Time, except (unless A) as otherwise expressly required by this Agreement, (B) with the prior written consent of Parent shall otherwise approve in writing, (which approval consent shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed in as set forth on Section 5.01(b6.1(a) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect adopt or propose any change or amendment (whether by merger, consolidation or otherwise) to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws or other similar governing documents of the Company and its Subsidiaries;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among wholly owned Subsidiaries of the Company not in violation of any instrument binding on the Company or any of its Subsidiaries and that would not reasonably be expected to result in a material increase in the net Tax liability of the Company and its Subsidiaries, taken as a whole;
(iii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any (A) shares of capital stock of the Company or any of its Subsidiaries (other than amendments to (1) the governing documents issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of any shares by a wholly owned Subsidiary of the Company that would not preventto the Company or another wholly owned Subsidiary or (2) the issuance or transfer of Shares pursuant to awards outstanding as of the date of this Agreement under, delay or impair and as required by the Initial Merger or terms of the other TransactionsStock Plans as in effect as of the date of this Agreement), (B) splitsecurities convertible into or exercisable, combine, subdivide exchangeable or reclassify its outstanding redeemable for any shares of such capital stock, any options, warrants or other rights of any kind to acquire any shares of such capital stock (except for any or such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)convertible, exercisable, exchangeable or redeemable securities, or (C) any Voting Debt;
(iv) declare, authorize, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by any Subsidiary of the Company to the Company or to a direct or indirect wholly owned Subsidiary of the Company to another direct Company) or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement Contract with respect to the voting of its capital stock;
(v) adjust, reclassify, split, combine or (E) purchasesubdivide, repurchaseredeem, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(vi) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), except for the capital expenditures contemplated by (ix) below, in each case, other than (A) acquisitions of supplies, equipment, inventory, third party Software and capital in the ordinary course of business consistent with past practice (it being understood and agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business consistent with past practice), or (B) acquisitions with a value or purchase price (including the value of assumed liabilities) not in excess of $100,000 in any transaction or related series of transactions or $400,000 in the aggregate;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other direct or indirect wholly owned Subsidiary of the Company) except for such advances incurred in the ordinary course of business consistent with past practice not to exceed $500,000 in the aggregate;
(viii) incur, alter, amend or modify any indebtedness or guarantee indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for the incurrence of indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $25,000 in the aggregate;
(ix) make or authorize any capital expenditures;
(x) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable GAAP;
(xi) subject to Section 6.10, release, assign, compromise, discharge, waive, settle or satisfy any Action (including any Action relating to this Agreement, the Offer or the Merger) or other rights, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) other than releases, assignments, compromises, discharges, waivers, settlements or satisfactions where the payments not covered by insurance do not exceed $850,000 in the aggregate or providing for any relief other than monetary relief (except for confidentiality, non-disparagement, releases, agreements not to s▇▇ and other similar provisions in a settlement agreement);
(iiA) merge amend or consolidate with modify, in any other Personmaterial respect, or restructureterminate any Material Contract, reorganize material lease for Leased Real Property or completely material Company Permit, (B) waive, release or partially liquidate assign any material rights or material claims under any Material Contract or (C) except in the ordinary course of business consistent with past practice enter into any Contract that would have been a Material Contract had it been entered into prior to the execution of this Agreement;
(xiii) make any Tax election, materially amend any Tax Return, settle or finally resolve any controversy or change any method of Tax accounting;
(xiv) (A) grant to any third Person any license, sublicense, covenant not to s▇▇, immunity, authorization, release or other right with respect to any material Intellectual Property; (B) assign or transfer to any third Person any material Intellectual Property; or (C) abandon any material Company Registered Intellectual Property Rights, in each case except as in the ordinary course of business consistent with past practice;
(xv) terminate any executive officers or hire any new employees unless such hiring is in the ordinary course of business consistent with past practice;
(xvi) adopt, enter into, amend, terminate or extend any Collective Bargaining Agreement;
(xvii) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any director, officer or, other than transactions in the ordinary course of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which business consistent with past practice, employees (who are not restricted thereby and other than mergers or consolidations of a Subsidiary officers) of the Company in which such Subsidiary is or any of its Subsidiaries, (B) increase the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and compensation, bonus or pension, welfare, severance, change-in-control or other benefits of, pay any bonus to, any director, officer or, other than mergers amongin the ordinary course of business consistent with past practice, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries non-officer employee of the Company that would or any of its Subsidiaries other than, in the case of non-officer employees, base salary increases or bonuses awarded in the ordinary course of business consistent with past practice (which bonuses shall not preventexceed $10,000 in the aggregate), materially delay (C) make any new equity-based awards to any director, officer or materially impair non-officer employee of the Transactions);
Company or any of its Subsidiaries, (iii) except as expressly required by any Company Plan as in effect on the date hereof: (AD) establish, adopt, enter into amend or terminate any material Company Benefit Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiariesawards, (E) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Company Benefit Plan, (F) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP, or (G) forgive any loans to directors, officers or key employees of the Company or any of its Subsidiaries;
(ivxviii) incur reclassify any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken independent contractor as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations an employee of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of unless the Company Disclosure Letter; providedreasonably believes that such a change is advisable in order to comply with applicable law;
(xix) fail to use commercially reasonable efforts to renew or maintain the Insurance Policies or comparable replacement policies, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(vxx) with respect to the Retained Business, other than with respect to acquisitions enter into any new line of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letterbusiness;
(vixxi) with respect to the Retained Businessadopt, transferenter into or effect any plan of complete or partial liquidation, leasedissolution, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon reorganization or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreementsrestructuring;
(viixxii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of take any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction action that would, or would be reasonably be expected likely to, individually or in the aggregate, prevent, materially delay or materially impair impede the consummation of the Transactions;Offer, the Merger or the other transactions contemplated by this Agreement; or
(xxxiii) other than capital expenditures made agree, authorize, propose, commit or announce an intention to do any of the foregoing.
(b) Nothing contained in accordance Section 6.1(a) shall give to Parent or Acquisition Sub, directly or indirectly, rights to control or direct the Company’s operations prior to the Acceptance Time in violation of applicable Law. Prior to the Acceptance Time, the Company shall exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions hereof, complete control and licenses supervision of film its operations and television and production programming (includinshall not be required to obtain consent of Parent if it reasonably believes that doing so would violate applicable Law.
Appears in 1 contract
Interim Operations. (a) The Company Versum covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) required otherwise expressly contemplated by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution this Agreement or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a7.1(a) of the Company Versum Disclosure Letter), (i) the Company shall, business of it and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practice, Ordinary Course and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees Employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees officers, Employees and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the generality of, of and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatof Section 7.1(a), from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) as approved in writing by Parent shall otherwise approve in writing, (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company Versum Disclosure Letter), the Company Versum, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to Versum’s Organizational Documents or, except for amendments that would both not materially restrict the operations of Versum’s businesses and not reasonably be expected to prevent, materially delay or materially impair the ability of Versum to consummate the Transactions, the Organizational Documents of any of its Subsidiaries;
(ii) other than in the Ordinary Course, except for any such transactions among its direct or indirect wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with any other Person, or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets outside of the Ordinary Course from any other Person (A) with a fair market value or purchase price in excess of $75 million in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or (B) that would reasonably be expected to prevent, materially delay or materially impair the ability of Versum to consummate the Transactions, in each case, other than acquisitions of inventory or other goods in the Ordinary Course and transactions among Versum and its direct or indirect wholly owned Subsidiaries or among Versum’s direct or indirect wholly-owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case issuance of clause (A)), shares (A) amend by its certificate direct or indirect wholly owned Subsidiary to it or another of incorporation its direct or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)indirect wholly owned Subsidiaries, (B) splitin respect of equity-based awards outstanding as of the date of this Agreement, combineor (C) granted in accordance with Section 7.1(b)(xvi), subdivide in each of clauses (B) and (C), in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or reclassify its outstanding securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other than any Permitted Encumbrances) over any material portion of Versum’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the Ordinary Course on any of its assets or any of its Subsidiaries, except for Encumbrances (A) that are required by or automatically effected by Contracts in place as of the day hereof, (B) that do not materially detract from the value of such assets or (C) that do not materially impair the operations of Versum or any such transaction by a of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from Versum and any of its direct or indirect wholly owned subsidiary Subsidiaries or in accordance with Section 7.1(b)(xvi)) in excess of $10 million in the Company which remains a wholly owned Subsidiary after consummation of such transaction), aggregate;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary Subsidiary) or modify in any material respect its dividend policy; provided, that Versum may make, declare and pay one regular quarterly cash dividend in each fiscal quarter in an amount per share of up to $0.08 per quarter and with a record date consistent with the Company record date for each quarterly period;
(viii) reclassify, split, combine, subdivide or to the Company redeem, purchase (through Versum’s share repurchase program or (2otherwise) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock, other than with respect to (A) the capital stock or other equity interests of a direct or indirect wholly owned Subsidiary of Versum or (B) the acquisition of shares of Versum Common Stock tendered by Employees in connection with a cashless exercise of Versum Options outstanding as of the date hereof or in order to pay Taxes in connection with the exercise or vesting of Versum equity awards outstanding as of the date hereof or granted in accordance with Section 7.1(b)(xvi), pursuant to the terms of the Versum Stock Plan and the applicable award agreement, in the Ordinary Course;
(ix) except to the extent expressly provided by, and consistent with, Section 7.1(b)(ix) of the Versum Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (A) not in excess of $25 million in the aggregate during any consecutive twelve (12) month period (other than capital expenditures within the thresholds set forth in Section 7.1(b)(ix) of the Versum Disclosure Letter), (1B) pursuant expenditures not in excess of $10 million (net of insurance proceeds) in the aggregate that Versum reasonably determines are necessary to avoid a material business interruption or maintain the forfeiture of, safety and integrity of any asset or withholding property or (C) paid by any direct or indirect wholly owned Subsidiary to Versum or to any other direct or indirect wholly owned Subsidiary of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock UnitsVersum, in each case in accordance response to any unanticipated and subsequently discovered events, occurrences or developments (provided that Versum will use its reasonable best efforts to consult with past practice Parent prior to making or agreeing to any such capital expenditure);
(x) other than in the Ordinary Course, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, adversely amend, modify, supplement or waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract other than (A) expirations and with renewals of any such Contract in the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofContract, (B) grant or provide any transaction or retention bonuses non-exclusive licenses, covenants not to any director▇▇▇, officerreleases, employee waivers or other service provider of non-exclusive rights under Intellectual Property owned by Versum and its Subsidiaries granted in the Company Ordinary Course, or any of its Subsidiaries, (C) increase the compensation, bonus any agreement among Versum and its direct or pension, welfare indirect wholly owned Subsidiaries or other benefits of any director, officer among Versum’s direct or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its indirect wholly owned Subsidiaries;
(ivxi) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than in the ordinary course of business consistent Ordinary Course or with past practice in a principal amount respect to amounts that are not material to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company Versum and its Subsidiaries, taken as a whole, than existing Indebtednesscancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries except debts or claims among Versum and its direct or indirect wholly owned Subsidiaries or among Versum’s direct or indirect wholly owned Subsidiaries;
(xii) settle or compromise, or offer or propose to settle or compromise any material Proceeding, including before a Governmental Entity, except in accordance with a maturity date the parameters set forth in Section 7.1(b)(xii) of the Versum Disclosure Letter; provided that no more than 10 years such settlement or compromise, or offer in respect thereof, may involve any injunctive or other non-monetary relief which, in either case, imposes any material restrictions on the business operations of Versum and its Subsidiaries or Affiliates, or, after the date of Effective Time, the Contract evidencing such IndebtednessCombined Company;
(xiii) materially amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(Bxiv) except enter into any material closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute materially in excess of the Bridge Facilityamount reserved therefore, in replacement surrender any right to claim a refund of a material amount of Taxes, or fail to file when due (taking into account any available extensions) any material Tax Return;
(xv) transfer, sell, lease, divest, cancel, abandon, allow to lapse or expire or otherwise dispose of, or permit or suffer to refinanceexist the creation of any Encumbrance upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for in connection with (A) sales of or non-exclusive licenses of the foregoing provided in the Ordinary Course, (B) sales of obsolete assets, (C) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiariesnot including services) with a fair market value not in excess of $50,000,000 individually if the transaction is not 15 million in the ordinary course or $100,000,000 individually aggregate other than pursuant to Material Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with this Agreement and (D) sales among Versum and its direct or indirect wholly owned Subsidiaries or among Versum’s direct or indirect wholly owned Subsidiaries;
(xvi) except as required by the existing terms of any Benefit Plan as in effect on the date hereof, as permitted under this Agreement or as required by applicable Law, increase or change the compensation or benefits payable to any Employee other than in the Ordinary Course; provided that, notwithstanding the foregoing, except as expressly disclosed in Section 7.1(b)(xvi) of the Versum Disclosure Letter or required pursuant to a Versum Benefit Plan in effect as of the date of this Agreement, Versum shall not: (A) grant any new long-term incentive or equity-based awards or amend or modify the terms of any such outstanding awards and the Company Stock Plansunder any Versum Benefit Plan, (B) Investment Preferred Stock (as defined in the Bridge Facility) grant any retention or transaction bonuses, (C) increase or change the compensation or benefits payable to any executive officer (other than (x) changes in health and welfare benefits that are generally applicable to all salaried Employees in the Ordinary Course or (y) increases in the base salaries and benefits of any executive officer in the Ordinary Course), (D) terminate, enter into, amend or renew (or communicate any intention to take such action) any material Benefit Plan, other than routine amendments to health and welfare plans (other than severance plans) that do not materially increase benefits or result in a material increase in administrative costs, or, other than as permitted by wholly owned Subsidiaries Section 7.1(b)(xvi) of the Versum Disclosure Letter, adopt any compensation or benefit arrangement that would be a material Benefit Plan if it were in existence as of the date of this Agreement, (E) accelerate the vesting of any compensation for the benefit of any Employee, (F) increase or change the severance terms applicable to any Employee, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) other than as required by GAAP, change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding rate in respect of any Benefit Plan, or (I) terminate the employment of any executive officer (other than for cause) or hire any new executive officer (other than as a replacement hire receiving substantially similar terms of employment); provided, that, to the Company or extent that Versum intends to hire an individual to replace a named executive officer of Versum, Versum shall first consult in good faith with Parent prior to, and with respect to, the hiring of such individual;
(xvii) recognize any other wholly owned Subsidiary Labor Organization as the representative of any of the Company; provided thatemployees of Versum or its Subsidiaries, or become a party to, establish, adopt, amend, commence negotiations for or terminate any collective bargaining agreement or other similar written agreement with a Labor Organization, in each case, other than in the avoidance of doubt, granting customary profit participation rights Ordinary Course or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant as required by applicable Law;
(xviii) incur any Indebtedness (including the issuance of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any optionsdebt securities, warrants or other rights to acquire, acquire any debt security) or guarantee any such shares Indebtedness, except for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not Indebtedness for borrowed money incurred in the ordinary course Ordinary Course under Versum’s revolving credit facilities and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase other lines of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value credit existing as of the date of this Agreement, (B) guarantees by Versum or any direct or indirect wholly owned Subsidiary of Versum of Indebtedness of Versum or any other direct or indirect wholly owned Subsidiary of Versum, (C) Indebtedness incurred in connection with a refinancing or replacement of existing Indebtedness (but in all cases which refinancing or replacement shall not increase the aggregate amount of Indebtedness permitted to be outstanding thereunder and in each case on customary commercial terms consistent in all material respects with the Indebtedness being refinanced or replaced), (D) Indebtedness incurred pursuant to letters of credit, performance bonds or other similar arrangements in the Ordinary Course, (E) interest, exchange rate and commodity swaps, options, futures, forward contracts and similar derivatives or other hedging Contracts (1) not entered for speculative purposes and (2) entered into in the Ordinary Course and in compliance with its risk management and hedging policies or practices in effect on the date of this Agreement, (F) Indebtedness incurred by mutual agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made Parties in accordance with Section 5.01(b)(v7.7 or (G) Indebtedness incurred among Versum and its direct or indirect wholly owned Subsidiaries or among Versum’s direct or indirect wholly owned Subsidiaries;
(xix) convene any special meeting (or any adjournment or postponement thereof) of Versum’s stockholders other than purchases the Versum Stockholders Meeting; or
(xx) agree or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct Versum’s operations prior to the Effective Time. Prior to the Effective Time, Versum will exercise, consistent with the terms and licenses conditions of film this Agreement, complete control and television supervision over its and production programming (includinits Subsidiaries’ respective operations. Notwithstanding anything in this Agreement to the contrary, no consent of Parent or Merger Sub shall be required with respect to any matter set forth in this Section 7.1 or elsewhere in this Agreement to the extent that the requirement of such consent would, upon the advice of outside antitrust legal counsel, violate applicable Antitrust Law. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, will be interpreted in such a way as to require compliance by any Party if such compliance would result in the violation of any rule, regulation or policy of any applicable Law.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Company Merger Effective Time or the earlier termination of this Agreement in accordance with ARTICLE VIII (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and except as (1) otherwise expressly permitted by this Agreement, actions taken in accordance with the Pre- Closing Restructuring or Modified Pre-Closing Restructuring or as required by applicable LawLaws), (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) business of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary course of business and usual course, consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, shall use commercially their respective reasonable best efforts to preserve the Retained Business’ organization intact their respective current business organizations, their goodwill and maintain the Retained Business’ existing relations and goodwill relationships with Governmental Entities, customerstenants, suppliers, distributors, licensors, creditors, lessors, employees and business associates creditors and others having material business dealings with the Retained Business (including material content providersthem, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of their respective present officers; provided that this Section 6.1 shall not apply to the Company actions of GWP JV Limited Partnership or its subsidiaries approved by the limited partners thereof in accordance with its Amended and its Subsidiaries’ present employees and agents.
(b) Restated Limited Partnership Agreement or taken by any such subsidiary in accordance with the organizational documents of such subsidiary. Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Company Merger Effective Time or the earlier termination of this Agreement in accordance with ARTICLE VIII, except (unless A) as otherwise expressly permitted or required by this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account not exceed five (5) business days following the Company Overview Presentationdate of request for approval by Parent accompanied by all information reasonably necessary for Parent to evaluate such request), and except (C) any actions taken in accordance with the Pre-Closing Restructuring or Modified Pre-Closing Restructuring or (D) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter)Laws, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws or other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate with any other Person, except for any such transactions among the Company and/or 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) (x) make or commit to make any capital expenditures other than amendments (A) as set forth on Section 6.1(a)(iii) of the Company Disclosure Letter, or (B) as necessary to repair and/or prevent damage to any property of the governing documents Company or any of its Subsidiaries in the event of an emergency situation after prior notice to Parent, and if the same is not covered by applicable insurance, in an amount not to exceed $500,000 with respect to any individual circumstance or $2,500,000 in the aggregate (provided that if the nature of such emergency renders prior notice to Parent impracticable, the Company shall provide notice to Parent as promptly as practicable after making such capital expenditure), or (y) make or commit to make any expenditure relating to any property of the Company, except in the usual and ordinary course of business consistent with past practice in order to maintain such property in working order;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of any class, any partnership interests or any equity equivalents (including any stock options or stock appreciation rights), any securities convertible into or exchangeable or exercisable for any shares of such capital stock, partnership interests or equity equivalents, or any options, warrants or other rights of any kind to acquire any shares of such capital stock, partnership interests or equity equivalents or such convertible or exchangeable securities, except for (1) the issuance of shares, partnership interests or equity equivalents by a wholly-owned Subsidiary of the Company that would not preventto the Company or another wholly-owned Subsidiary of the Company, delay or impair (2) the Initial Merger issuance of Company Common Shares issuable upon redemption of partnership units in the Partnership or the other Transactions)Operating Partnership in accordance with the terms of the relevant limited partnership agreement, and (B3) splitthe issuance of Company Common Shares issuable upon the exercise, combine, subdivide vesting or reclassify its outstanding shares settlement of capital stock Company Equity Awards in existence as of the date of this Agreement in accordance with their terms in effect as of the date hereof;
(v) except for any such transaction by a wholly owned subsidiary as set forth on Section 6.1 (a)(v) of the Company which remains a wholly Disclosure Letter, mortgage or pledge any of their respective assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens), except in an amount not to exceed $50,000 in the aggregate, so long as such mortgage or pledge is pre-payable without penalty;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary after consummation of the Company, and, in the case of a joint venture, and to the extent the Company or any of its Subsidiaries are contractually obligated to make any such transactionloan, advance, guarantee, capital contribution or investment pursuant to any Contract in effect as of the date hereof);
(vii) authorize, (C) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (otherwise, with respect to any shares of its capital stock, partnership interests or other equity interests, or make any combination thereof) actual, constructive or deemed distribution in respect of any shares of its capital stock (stock, partnership interests or other equity interests, or otherwise make any payments to equityholders in their capacity as such, except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or Company, (2) normal semiannual cash dividends on the Common Stock Series A Company Preferred Shares in accordance with their terms, (3) dividends on the Partnership Series A Preferred Units and the Series A preferred partnership units in the Operating Partnership in accordance with their respective terms, (4) subject to Section 6.14, upon consultation with Parent, distributions reasonably required for the Company to maintain its status as described in Section 5.01(b)(i) a REIT under the Code or to avoid the payment of income or excise tax under Sections 857 or 4981 of the Code; (5) dividend equivalents payable upon the vesting or settlement of Company Disclosure Letter)RSUs or Company PSUs in existence as of the date of this Agreement; (6) dividends or other distributions made to GWP JV Limited Partnership pursuant to the terms of its Amendment and Restated Limited Partnership Agreement; (7) dividends declared and publicly announced by the Company prior to the execution of this Agreement; and (8) the Pre-Closing Dividend;
(viii) except for the Voting and Support Agreement, (D) enter into any agreement with respect to the voting of its capital stock, partnership interests or other equity interests;
(Eix) purchasereclassify, repurchasesplit, redeem combine, subdivide or redeem, purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock stock, partnership interests or any other equity interests or securities convertible into or exchangeable into or exercisable for any shares of its capital stock (stock, partnership interests or other than equity interests, except for any such redemption, purchase or other acquisition (1) as may be required by the Company Charter, the Partnership Agreement or the Operating Partnership LP Agreement or pursuant to settlement of any Company Equity Awards outstanding as of the forfeiture of, or withholding date of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case this Agreement in accordance with past practice and with their terms and, as applicable, the terms of the Company Stock Plans Plan as in effect on the date of this Agreement Agreement, (2) after consultation with Parent, as may reasonably be required for the Company to maintain its status as a REIT under the Code and to avoid the payment of income or excise Tax under Sections 857 or 4981 of the Code through the partial taxable year deemed to end on the Company Effective Merger Time or (3) in connection with (A) the payment of the exercise price of Company Options with Company Common Shares, (B) the withholding of Taxes in connection with the exercise, vesting and settlement of Company Equity Awards in existence as modified after of the date of this Agreement in accordance with their terms in effect as of the date hereof, (C) forfeitures of Company Equity Awards in existence as of the date of this Agreement in accordance with their terms in effect as of the date hereof; or (4) the redemption of the Series A Company Preferred Shares in accordance with the terms of this Agreement;
(x) incur, assume or (2) purchasesrefinance any indebtedness for borrowed money or guarantee such indebtedness of another Person, repurchases, redemptions or issue or sell any debt securities or warrants or other acquisitions rights to acquire any debt security of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
its Subsidiaries, except for (iiA) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions intercompany indebtedness of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly wholly-owned Subsidiaries of the Company or (B) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company;
(xi) prepay or terminate any indebtedness for borrowed money, or modify in any material respect the terms of any such indebtedness or of any documents evidencing or securing such indebtedness;
(xii) except pursuant to (i) any mandatory payments under any credit facilities or other similar arrangements in existence on the date of this Agreement or (ii) amounts individually not in excess of $100,000, or in the aggregate, not to exceed $500,000, in each case, in excess of applicable insurance proceeds, incur, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or un-asserted, contingent or otherwise), other than any payment, discharge or satisfaction (x) in the ordinary and usual course of business consistent with past practice, (y) reflected or reserved against in the most recent consolidated financial statements (or notes thereto) included in the Company Reports filed prior to the date of this Agreement, or (z) of fees, costs and expenses incurred in connection with the preparation, execution and performance of this Agreement and the transactions contemplated hereby;
(xiii) except as set forth on Section 6.1 (a)(xiii) of the Company Disclosure Letter, enter into any Contract that would not prevent, materially delay or materially impair have been a Material Contract had it been entered into prior to the Transactionsdate of this Agreement (subject to clause (xx) below in respect of Company Leases);
(iiixiv) make any changes with respect to accounting policies or procedures, except (i) as required by changes in applicable generally accepted accounting principles (or any interpretation thereof), Regulation S-X of the Exchange Act or a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization) or (ii) as required by a change in applicable Law;
(xv) except as expressly set forth in Section 6.1(a)(xv) of the Company Disclosure Letter, settle or compromise any litigation or other proceeding before a Governmental Entity (whether or not commenced prior to the date of this Agreement), except for (i) amounts not in excess of $500,000 individually, or $1,000,000 in the aggregate, in each case in excess of applicable insurance proceeds, and that do not involve the imposition of injunctive or equitable relief against the Company or any of its Subsidiaries or (ii) litigation or other proceedings arising from the ordinary and usual course of operations of the Company and its Subsidiaries involving collection matters or personal injury which are covered by adequate insurance (subject to customary deductibles);
(xvi) amend, modify or terminate, or cancel, modify or waive any debts or claims held by it, or waive compliance with the terms of or breaches under, any Material Contract (subject to clause (xx) below in respect of Company Leases);
(xvii) take any action that could or fail to take any action, the failure of which could reasonably be expected to cause (A) Company to fail to qualify as a REIT under the Code or (B) the Partnership to be treated other than as a partnership or disregarded entity for U.S. federal income tax purposes;
(xviii) make, change or rescind any Tax election (except for an affirmative election under Section 754), change a method of Tax accounting, amend any income or other Tax Return, change in annual accounting period, consent to any extension of waiver of the limitation period applicable to any Tax claim or assessment relating to Taxes (except where relating to an extension of time to file any income or other Tax Return), settle or compromise any material federal, state, local or foreign Tax liability, audit, claim or assessment, enter into any closing agreement related to Taxes, request any ruling with respect to Taxes from a Governmental Entity, or surrender any right to claim any Tax refund, except, in each case, to the extent the Company reasonably determines, after consultation with Parent, that such action is (A) required by Law, (B) necessary or advisable (x) to elect or to preserve Company’s qualification as a REIT under the Code or (y) to qualify or preserve the status of any Subsidiary as a disregarded entity or partnership for U.S. federal income tax purposes or as a Qualified REIT Subsidiary or a Taxable REIT Subsidiary under the applicable provisions of Section 856 of the Code, as the case may be, or (C) reasonably necessary or appropriate in connection with determining the tax status and/or filing returns for the Company or any Subsidiary for the year ending either December 31, 2016 or on a date during 2017 prior to the Closing Date, including the Company or any Subsidiary for which the first taxable year thereof is the year ending December 31, 2016;
(1) sell, transfer, dispose of or encumber (A) any personal property that exceeds $200,000 in the aggregate, (B) any capital stock, partnership interests or other equity interests of any of its Subsidiaries, or (C) any real property; or (2) enter into any contract or letter of intent for the sale, transfer, mortgage or disposition of any real property;
(xx) enter into, renew, modify, amend or terminate, waive, release, compromise or assign any rights or claims under, any Company Plan Lease (or any lease for real property that, if existing as in effect on of the date hereof: , would be a Company Lease), except for (A) establish, adopt, amend entering into any new lease or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material modifying any Company Plan Lease in the ordinary course of business consistent with past practice that does not materially increase on market terms and where any such new lease or Company Lease, together with any other lease to the cost same or an affiliated tenant, (1) relates to premises of no more than 25,000 square feet and (2) requires no more than $1,000,000 in capital commitments, (B) terminating any Company Lease as a result of a material default by the counterparty to such Company Lease (in accordance with the terms of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofLease and subject to any applicable cure period therein), (BC) any termination, modification or renewal in accordance with the terms of any existing Company Lease that occurs automatically without any action (other than notice of renewal) by the Company, the Partnership or any of their Subsidiaries or (D) as set forth in Section 6.1(a)(xx) of the Company Disclosure Letter;
(xxi) except as set forth in Section 6.1(a)(xxi) of the Company Disclosure Letter or as required by applicable Law or pursuant to the terms of any previously disclosed Benefit Plan, (i) grant or provide any transaction severance or retention bonuses termination payments or benefits to any director, officer, employee or other service provider consultant (who is a natural person) of the Company or any of its Subsidiaries, (C) increase the compensationexcept, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course case of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments who are not triggered therebyofficers, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (Eii) commercial paper issued in increase the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at compensation, bonus or pension, welfare, severance or other benefits of, pay any time outstandingbonus to, (F) Indebtedness, the proceeds of which will be used to finance all or make any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit new equity awards to any capital expenditures other than (A) in connection with the repair director, officer, employee or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Wax Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Wax Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Wax Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Holdco, Parent and its their Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
; (x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinincluding s
Appears in 1 contract
Sources: Amended and Restated Agreement and Plan of Merger (New Fox, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, During the period from and after the execution date of this Agreement and prior to continuing until the First earlier of the termination of this Agreement or the Effective Time Time, except as set forth in the Disclosure Statement, or unless ADS has consented in writing thereto (unless Parent shall otherwise approve in writing, which approval consent shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to:
(i) conduct their respective operations according to their usual, use its reasonable best efforts to conduct the Retained Business in the regular and ordinary course of business consistent with past practice, and in substantially the Company shall, and shall cause each of its Subsidiaries to, solely same manner as heretofore conducted;
(ii) to the extent related to the Retained Business, subject to compliance consistent with the specific matters set forth belowtheir respective businesses, use commercially reasonable efforts to preserve the Retained Business’ organization intact their respective business organizations and maintain the Retained Business’ existing relations and goodwill with Governmental Entitiesgoodwill, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of their respective officers and employees and maintain satisfactory relationships with those persons having business relationships with them;
(iii) not amend their respective Articles or Certificates of Incorporation or By-Laws or comparable governing instruments;
(iv) promptly notify ADS of any Company Material Adverse Effect, any litigation or governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or the breach of any representation or warranty contained herein;
(v) promptly deliver to ADS true and correct copies of any report, statement or schedule filed by the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting with the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as SEC subsequent to itself and its Subsidiaries that, from and after the date of this Agreement and prior Agreement;
(vi) not (A) except pursuant to the First Effective Time exercise of options, warrants, conversion rights and other contractual rights existing on the date hereof and disclosed pursuant to this Agreement, issue any shares of its capital stock, effect any stock split or otherwise change its capitalization as it existed on the date hereof; (unless Parent shall otherwise approve in writingB) grant, which approval shall confer or award any option, warrant, conversion right or other right not be unreasonably withheld, conditioned existing on the date hereof to acquire any shares of its capital stock; (C) increase any compensation or delayed, and which determination shall take enter into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection or amend any employment agreement with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:present or future officers, directors or employees; (D) grant any severance or termination package to any employee or consultant, except to the extent consistent with past practices; (E) hire any new employee who shall have, or terminate the employment of any employee who has, an annual salary in excess of $50,000; or (F) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect, except for changes which are less favorable to participants in such plans;
(ivii) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause not (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or make any other distribution payable in cash, stock or property (or any combination thereof) in payment with respect of to any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company other ownership interests; or (2B) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)directly or indirectly, (D) enter into any agreement with respect to the voting of its capital stockredeem, or (E) purchase, repurchase, redeem purchase or otherwise acquire any shares of its capital stock stock, or make any securities convertible or exchangeable into or exercisable commitment for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)such action;
(iiviii) merge not enter into any agreement or consolidate with any other Persontransaction, or restructureagree to enter into any agreement or transaction, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in outside the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofbusiness, (B) grant or provide including, without limitation, any transaction involving a merger, consolidation, joint venture, license agreement, partial or retention bonuses to any directorcomplete liquidation or dissolution, officerreorganization, employee recapitalization, restructuring or a purchase, sale, lease or other service provider disposition of the Company a portion of assets or capital stock;
(ix) not incur any of its Subsidiaries, (C) increase the compensation, bonus indebtedness for borrowed money or pension, welfare or other benefits of guarantee any director, officer or employee of the Company or any of its Subsidiaries, such indebtedness except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue or sell any debt securities or warrants or other rights to acquire any Indebtednessdebt securities of others;
(x) continue to make regularly scheduled payments on its existing indebtedness, leases and other obligations;
(xi) not make any loans, advances or capital contributions to, or investments in, any other Person in excess of $10,000;
(xii) except as described in the Disclosure Statement, not make or commit to made any capital expenditures in excess of $100,000 individually or $225,000 in the aggregate;
(Axiii) not apply any of its assets to the direct or indirect payment, discharge, satisfaction or reduction of any amount payable directly or indirectly to or for the benefit of any affiliate or Related Party or enter into any transaction with any affiliate or Related Party (except for payment of salary and other customary expense reimbursements made in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms Related Parties who are employees, directors or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations consultants of the Company or its Subsidiaries);
(xiv) not voluntarily elect to alter the manner of keeping its books, accounts or records, or change in any manner the accounting practices therein reflected, except for changes in accounting laws which affect all companies in the business of the Company generally and those indicated by good accounting practices;
(xv) not grant or make any mortgage or pledge or subject itself or any of its Subsidiaries with respect properties or assets to such Indebtedness any Lien, charge or encumbrance of any kind; and
(and Parent xvi) maintain insurance on its tangible assets and its Subsidiaries, including, following businesses in such amounts and against such risks and losses as are currently in effect.
(b) During the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, except as set forth in the Disclosure Statement, or unless the Company has consented in writing thereto (which consent shall not be unreasonably withheld), ADS shall, and shall cause each of its Subsidiaries to:
(i) conduct their respective operations according to their usual, regular and ordinary course in substantially the same manner as heretofore conducted;
(ii) promptly deliver to the Company true and correct copies of business consistent any report, statement or schedule filed by ADS with past practice the SEC subsequent to the date of this Agreement;
(iii) promptly notify the Company of any ADS Material Adverse Effect, any litigation or in connection with a Sky Acquisition and not for speculative purposes; provided governmental complaints, investigations or hearings (or communications 48 indicating that the Company shall consult with Parent prior same may be contemplated), or the breach of any representation or warranty contained herein;
(iv) not take any action that would result in a failure to entering into hedging activities in connection with Indebtedness maintain the trading of ADS Common Stock on the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceNASDAQ;
(v) with respect to the Retained BusinessADS only (and not its Subsidiaries), not (A) declare, set aside or pay any dividend or make any other than distribution or payment with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Companyownership interests; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually directly or $200,000,000 in the aggregate in any yearindirectly, in each case to redeem, purchase or otherwise acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any shares of its Retained Subsidiaries shall enter into capital stock, or make any commitment for any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;action; and
(xvi) other than capital expenditures made in accordance to the extent consistent with Section 5.01(b)(v) their respective businesses, use commercially reasonable efforts to preserve intact their respective business organizations and other than purchases and licenses of film and television and production programming (includingoodwill.
Appears in 1 contract
Interim Operations. Except as (ax) The required by applicable Law, (y) expressly contemplated or required by this Agreement or (z) set forth in Section 6.1 of the Company covenants Disclosure Letter, the Company Parties covenant and agrees as to itself and its Subsidiaries agree that, from and after the execution and delivery of this Agreement and prior to the First Company Merger Effective Time Time, except with the prior written consent of Parent (unless Parent shall otherwise approve in writing, which approval shall consent is not to be unreasonably withheld, conditioned or delayed), each of the Company Parties shall, and shall cause their Subsidiaries to, conduct their business in the ordinary course and shall, and shall cause their Subsidiaries to, use their respective commercially reasonable efforts to (1) preserve their business organizations intact and (2) maintain existing relations and goodwill with Governmental Entities and customers, suppliers, employees and business associates.
(a) Without limiting the generality of the foregoing and in furtherance thereof, from and after the execution and delivery of this Agreement until the Company Merger Effective Time, except as (1x) required by applicable Law, (2y) expressly contemplated or required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) this Agreement, or (3z) otherwise expressly disclosed as set forth in the relevant subsection of Section 5.01(a) 6.1 of the Company Disclosure LetterLetter (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections such action shall be expressly permitted under the first sentence of Section 6.1), except with the prior written consent of Parent (which consent not to be unreasonably withheld, conditioned or delayed), none of the Company shallParties will and the Company Parties will not permit any of their Subsidiaries to:
(i) adopt any change in the Company's certificate of incorporation or bylaws or DPA's limited liability company agreement, or adopt any material change in the applicable governing instruments of any of their Subsidiaries;
(ii) merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate, except for (A) the Mergers or (B) any such transaction between wholly owned Subsidiaries of the Company Parties, or between any wholly owned Subsidiary of the Company Parties and shall cause each the Company Parties, unless reasonably objected to by Parent following consultation;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) (x) any corporation, partnership or other business organization or (y) any assets from any other Person (excluding ordinary course purchases of goods, products and off-the-shelf Intellectual Property), except, following reasonable advanced consultation with Parent, where the consideration in such transaction is not in excess of $2,000,000 individually or $5,000,000 in the aggregate;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of its capital stock or equity interests or the capital stock or equity interests of any of its Subsidiaries to(other than (A) the issuance of Class A Shares upon the exercise of Company Options and settlement of Company RSAs and Director RSAs in accordance with the Stock Plan, use its reasonable best efforts in each case that are outstanding as of the date hereof or that are issued after the date hereof in compliance with this Agreement, (B) the issuance of Class A Shares pursuant to conduct that certain Exchange Agreement dated as of October 3, 2007, as amended through the Retained Business date hereof, by and among the Company Parties and certain unitholders of DPA (the “Exchange Agreement”), (C) between wholly owned Subsidiaries of the Company Parties or between a wholly owned Subsidiary of the Company Parties and a Company Party), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, stock units, stock awards, warrants or other rights of any kind to acquire any shares of such capital stock, equity interests, convertible or exchangeable securities;
(v) make any loans, advances or capital contributions to or investments in any Person (other than the Company Parties or any direct or indirect wholly owned Subsidiary of the Company Parties) other than in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business practice (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersbusiness expense advances to employees) and keep available the services in amounts not in excess of the Company and its Subsidiaries’ present employees and agents.$750,000;
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cvi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock or equity interests (except for (1A) any regular quarterly cash dividends at a rate not in excess of $0.09 per Class A Share and $0.09 per New Class A Unit, with record dates and payment dates consistent with the prior year, (B) tax distributions not in excess of those provided for pursuant to Section 4.4 of the limited liability company agreement of DPA or distributions (C) dividends paid by a any direct or indirect wholly owned Subsidiary of to the Company Parties or to another any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(vii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or equity interests (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase of any Class A Shares tendered by current or former Service Providers in connection with the cost cashless exercise of Company Options or in order to pay Taxes in connection with the exercise of Company Options or the vesting of Company RSAs and Director RSAs or in connection with any obligation under the Exchange Agreement);
(viii) incur any Indebtedness for borrowed money or guarantee such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, Indebtedness of another Person (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider than a wholly owned Subsidiary of the Company Parties), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company Parties or any of its their Subsidiaries, in each case other than (CA) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to a face value or principal amount not in excess of $2,500,000 in the aggregate, or (1B) employees below in the level ordinary course under letters of Executive Vice President and (2) employees at or above the level credit, lines of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare credit or other benefits prior to credit facilities or arrangements in effect on the date hereof so long as the total Indebtedness incurred under all such changeletters of credit, lines of credit or credit facilities does not exceed $50,000,000 in the aggregate;
(Dix) increase make or authorize any capital expenditures in excess of $500,000 individually or $1,500,000 in the severance aggregate, other than any capital expenditure (or termination payments or benefits payable to any director, officer, employee or other service provider series of related capital expenditures) consistent in all material respects with the 2013 capital expenditure budget of the Company or Parties and their Subsidiaries in effect on the date of this Agreement (a copy of which has been previously provided to Parent);
(x) make any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or by a Governmental Entity;
(xi) compromise, settle or agree to settle any claims (A) involving amounts in excess of $250,000 individually or $1,000,000 in the aggregate, except to the extent reflected or reserved against in the Company's consolidated balance sheet as of September 30, 2012 included in the Company Plan or to change Reports in respect of the manner in which contributions to such plans are made or the basis on which such contributions are determined claim being settled or (GB) forgive that would impose any loans material non-monetary obligations on the Company Parties or their Subsidiaries or Affiliates that would continue after the Company Merger Effective Time;
(xii) make any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, enter into any closing agreement with respect to directorsany material Tax or surrender any right to claim a material Tax refund;
(xiii) transfer, officers sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or employees allow to lapse or expire, ▇▇▇▇▇ ▇ ▇▇▇▇ (other than a Permitted Lien) on or otherwise dispose of any assets, properties or rights of the Company Parties or their Subsidiaries, including capital stock of any of its their Subsidiaries that are material to the Company Parties and their Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, taken as a whole, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed Liens granted in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness any indebtedness permitted under this clause Section 6.1;
(H), (Ixiv) except as required under applicable Law or the terms of any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, Benefit Plan in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company effect as of the date hereof (A) grant, provide or increase (or commit to grant, provide or increase) any severance or termination payments or benefits to any current or former Service Provider who is or was an executive officer, a director or other Service Provider earning annual compensation (base salary and incentive opportunities) in excess of this Agreement $750,000 (any such Service Provider, a “Material Service Provider”), grant or provide for (or commit to grant or provide for) any severance or termination payments or benefits to any other current or former Service Provider other than in the ordinary course of business consistent with past practice or increase (or commit to increase) any severance or termination payments or benefits; (B) increase in connection any manner the compensation or benefits of any current or former Service Provider, except (x) for increases in base salary in the ordinary course where the aggregate increase does not exceed 4.5% percent of the aggregate annualized salaries in 2012 and (y) the payment of bonuses for the 2012 performance year in the ordinary course of business and, with a Sky Acquisition respect to Material Service Providers consistent with past practice, and otherwise in the aggregate consistent with past practice, and not for speculative purposes; provided that in excess of the amounts set forth in Section 6.1(a)(xiv) of the Company shall consult with Parent prior Disclosure Letter; (D) become a party to, establish, adopt, terminate, materially amend (or commit to entering into hedging activities become a party to, establish, adopt, terminate, or materially amend) any Benefit Plan or arrangement that would have been a Benefit Plan if in connection with Indebtedness of effect on the type described in clauses date hereof (Gother than routine changes to welfare plans) or accelerate the vesting of, or lapse of restrictions on, any compensation for the benefit of any current or former Material Service Provider; (HE) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with cause the funding of Star India Private Limited and any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan; or (F) terminate the employment or services of any Material Service Provider other than for cause, or hire any Person that would reasonably be expected to be a Material Service Provider;
(xv) abandon, convey title (in whole or in part), exclusively license or grant any right or other licenses to material Intellectual Property owned or exclusively licensed to the Company Parties or any of their Subsidiaries, or enter into licenses or agreements that impose material restrictions upon the Company Parties or any of their Subsidiaries with respect to its Subsidiaries; provided that the aggregate principal amount or their use of such Indebtednessmaterial Intellectual Property owned by any third party, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in each case other than in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) except in the ordinary course of business consistent with past practice practice, (1) modify or amend, or voluntarily or prematurely terminate, any Material Contract (other than extensions at the end of term that do not materially modify or amend the terms of such Contract or modifications or amendments to reflect actual services performed), (2) enter into any successor agreement to an expiring Material Contract that materially modifies or amends the terms of such expiring Material Contract or (3) enter into any new agreement that would have been considered a Material Contract if it were entered into at or prior to the date hereof other than any such Contracts that may be cancelled, terminated or withdrawn without material liability to the Company Parties or their Subsidiaries upon notice of 90 days or less or (B) enter into any new agreement that would have been considered a Material Contract pursuant to clause (B), (I), (O) or (Q) of Section 5.1(q) if it were entered into at or prior to the date hereof;
(xvii) fail to maintain in full force and effect material insurance policies covering the Company Parties and their Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice; or
(xviii) agree, authorize or commit to do any of the foregoing.
(b) Each of the Buyer Parties agrees that, from and after the execution and delivery of this Agreement and until the Company Merger Effective Time, it shall not consummate or agree to consummate any purchase or other acquisition of any assets, licenses, operations, rights or businesses (other than as expressly contemplated by this Agreement) that, individually or in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017with any other such purchase or acquisition, 2018 and 2019 set forth in Section 5.01(b)(vis reasonably likely to (i) of the Company Disclosure Letter;
(vi) with respect prevent or materially delay from obtaining any consents, registrations, approvals, permits or authorizations required to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of be obtained from any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests Governmental Entity in connection with the production consummation of the Mergers and the other transactions contemplated hereby, (ii) result in the imposition of a condition or financing of film conditions on any such consents, registrations, approvals, permits or authorizations, or (iii) otherwise prevent or materially delay any party hereto from performing its obligations hereunder or consummating the Mergers and television programming the other transactions contemplated hereby.
(c) Nothing contained in this Agreement is intended to give any Buyer Party, directly or video game productionindirectly, letting lapse, abandonmentthe right to control or direct the Company Parties' or their Subsidiaries' operations prior to the Company Merger Effective Time, and cancellationsnothing contained in this Agreement is intended to give the Company Parties or their Subsidiaries, directly or indirectly, the right to control or direct the Buyer Parties' operations. Prior to the Company Merger Effective Time, each of the Buyer Parties and Liens the Company Parties shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries' respective operations.
(d) Unless otherwise agreed by the parties hereto, following the date hereof and prior to the Closing Date, the Company shall use commercially reasonable efforts to make available to Parent:
(i) an estimate of the amounts potentially payable to each Service Provider under any Benefit Plan in connection with the execution and delivery of this Agreement, the adoption of this Agreement by holders of shares constituting the Company Requisite Vote or the consummation of the transactions contemplated hereby (either alone or in conjunction with any other event, including as a result of a termination of employment or service), including the amount of any “excess parachute payments” within the meaning of Section 280G of the Code and any excise tax gross-up that are ordinary course non-exclusive licensescould become payable under any Benefit Plans;
(ii) complete and correct copies of each Lease; and
(iii) true and complete current copies of all material Benefit Plans and, in each casewhere applicable, of Intellectual Property(A) the most recently prepared actuarial report or financial statement with respect thereto, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per licensemost recent summary plan description, and all material modifications thereto with respect thereto, (C) sales of Intellectual Property the most recent annual report (Form 5500 Series) and accompanying schedule with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries)respect thereto, (D) licensesthe most recent determination letter with respect thereto, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) copies of any material written correspondence with a Governmental Entity with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of thereto and (F) any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except related funding arrangements with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinthereto.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees Except as otherwise (i) required by this Agreement, (ii) required by applicable Law or the DOJ Agreement, (iii) approved in writing by Parent (such approval not to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned delayed or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Planconditioned) or (3iv) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, from the date of this Agreement until the Effective Time, the Company shallwill, and shall will cause each of its Subsidiaries to, use its and their reasonable best efforts to conduct the Retained Business their businesses in the ordinary course of business consistent with past practicepractice and, and to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use its and their commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and to maintain existing business relationships (including with customers and suppliers); provided, that no action by the Retained Business’ existing relations Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Except as otherwise (w) required by this Agreement, (x) required by applicable Law or the DOJ Agreement, (y) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth on Section 6.1(b) of the Company Disclosure Schedule, from the date of this Agreement until the Effective Time, the Company will not, and goodwill will cause its Subsidiaries not to:
(i) (x) adopt or submit to stockholder approval any change in the certificate of incorporation or bylaws of the Company or (y) adopt any change in the comparable organizational document of any Subsidiary of the Company that, in the case of this clause (y), would be adverse to Parent or Merger Sub or adversely affect or delay the consummation of the Merger or the other transactions contemplated by this Agreement;
(ii) merge or consolidate the Company or any of its Subsidiaries with Governmental Entitiesany other Person, customersexcept for any such transaction between or among any of its wholly owned Subsidiaries that would not impose, suppliersindividually or in the aggregate, distributorsany changes or restrictions on its assets, licensorsoperations or business or on the assets, creditors, lessors, employees operations and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries that would be adverse to Parent or any of its Subsidiaries’ present employees and agents., or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, individually or in the aggregate, any changes or restrictions on the assets, operations or business of the Company or any of its Subsidiaries except for restructuring, reorganizations or complete or partial liquidations that do not incur, increase or accelerate any material liability to any Person;
(biii) Without limiting acquire (including by merger, consolidation or acquisition of equity interests or assets or any other business combination) (A) any corporation, partnership or other business organization or (B) any assets outside of the generality ordinary course of business consistent with past practice from any other Person in any transaction or series of related transactions (in the case of clause (B), for consideration in excess of $10,000,000 in the aggregate);
(iv) issue, sell, pledge, dispose of, and in furtherance grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Lien against, or otherwise enter into any Contract or understanding with respect to the voting of, the foregoing, any shares of capital stock of the Company covenants and agrees as or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to itself acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction among the Company and its wholly-owned Subsidiaries thator among the Company’s wholly-owned Subsidiaries, from and (B) any issuance, sale, grant or transfer of Shares pursuant to (1) exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement or granted after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve not in writingviolation of this Agreement, which approval shall not be unreasonably withheld, conditioned in each case in accordance with their terms or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required the conversion of Subordinated Convertible Notes in accordance with their terms or (C) with respect to encumbrances, pursuant to the Company Credit Agreement as in effect on the date hereof.
(v) make any loans, advances or capital contributions to any Person (other than (A) to the Company or any of its wholly-owned Subsidiaries, (B) operating leases and extensions of credit terms to customers in each case in the ordinary course of business consistent with past practice and (C) loans or advances made by the Transaction Documents (including Company or any of its Subsidiaries to employees in connection the ordinary course of business consistent with the Separation and the Distribution) or (3) otherwise expressly disclosed terms set forth in Section 5.01(b6.1(b)(v) of the Company Disclosure LetterSchedule), the Company shall not and shall not permit any of its Subsidiaries to:;
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cvi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1A) any dividends or other distributions paid by a direct or indirect wholly any wholly-owned Subsidiary of the Company to another direct the Company or indirect wholly to any other wholly-owned Subsidiary of the Company or and (B) quarterly dividends to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) stockholders of the Company Disclosure Letterby the Company in an amount not to exceed $0.18 per Share with record and payment dates for such dividends consistent with practice or, subject to the preceding clause (B) (which, for the avoidance of doubt, shall be permitted), take any other action or permit any event or circumstances to occur that would cause or require an adjustment of the “Conversion Rate” (Das defined in the Subordinated Convertible Notes Indenture);
(vii) enter into any agreement with respect to the voting of its capital stockreclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to any such transaction by a wholly-owned Subsidiary of the forfeiture ofCompany, (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Equity Awards, or withholding payment of Taxes with the exercise price in respect to, of Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock UnitsOptions, in each case in accordance with past practice and with the terms case, outstanding as of the Company Stock Plans as in effect on the date of this Agreement (pursuant to its terms or as modified after the date granted thereafter not in violation of this Agreement and (C) redemptions or acquisitions of the Subordinated Convertible Notes to the extent required by, and in accordance with with, the terms thereof);
(viii) create, incur, assume, guarantee, endorse, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees of this Agreement) the same or (2) purchasesany other Indebtedness incurred outside the ordinary course of business consistent with past practice, repurchases, redemptions issue or sell any debt securities or warrants or other acquisitions rights to acquire any debt security of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge its Subsidiaries or consolidate with grant any other PersonLiens on any of its assets, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: for (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowings in the ordinary course of business consistent with past practice that does not materially increase under the cost of such Company Plan or benefits provided under such Company Plan based on the cost Company’s credit facilities as in effect on the date hereof, hereof or under facilities that replace or refinance such existing credit facilities and that (I) can be repaid on the Closing Date in connection with the Closing without premium or penalty and (II) do not increase the aggregate amount of the commitments thereunder relative to the facilities so replaced or refinanced and (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider guarantees by the Company of the Company or any obligations of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into Subsidiaries incurred in the ordinary course of business consistent with past practice, and (EC) commercial paper issued indebtedness for borrowed money that can be prepaid without premium or penalty on the Closing Date in connection with the Closing in an amount not to exceed $25,000,000 in the aggregate;
(ix) other than in accordance with the Company’s capital expenditure budget made available to Parent prior to the date of this Agreement and set forth in the Company Disclosure Schedule, incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $5,000,000 individually or $10,000,000 in the aggregate;
(x) other than in the ordinary course of business consistent (it being understood that this ordinary course exception shall not apply to any actual or potential Material Contracts pursuant to clauses B, D, E, G, I, K or L of the definition thereof) or in connection with past practice in a principal amount not any matter to exceed $250,000,000 in the aggregate at extent such matter is expressly permitted by any time outstandingother clause of this Section 6.1(b), (FA) Indebtedness, enter into any Contract that would have been a Material Contract had it been entered into prior to the proceeds date of which will be used to finance all this Agreement or (B) amend or modify in any portion material respect or assign or terminate any Material Contract (other than expirations of the Dividend (and fees and expenses any such Contract in connection therewithaccordance with its terms) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at otherwise waive, release or assign any time outstanding under this clause (F) shall not exceed $9,000,000,000; providedmaterial rights, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations claims or benefits of the Company or any of its Subsidiaries thereunder, or amend or modify in any respect or assign, terminate or fail to comply with the DOJ Agreement;
(xi) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xii) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings (other than any audit or other proceeding in respect of Taxes), other than settlements that result solely in monetary obligations of the Company or its Subsidiaries (without the admission of wrongdoing or a nolo contendere or similar plea, the imposition of injunctive or other equitable relief, or restrictions on the future activity or conduct, by, of or on Parent, the Company or any of their respective Subsidiaries) involving payment by the Company or any of its Subsidiaries of (A) amounts not in excess of the sum of (x) amounts specifically reserved in accordance with U.S. GAAP with respect to such Indebtedness proceeding on the Company’s consolidated financial statements for the quarterly period ending September 30, 2017 plus (y) $500,000, or (B) an amount not greater than $500,000 individually or $3,000,000 in the aggregate;
(xiii) (A) make, change or revoke any Tax election, (B) except in the ordinary course of business and Parent and its Subsidiariesconsistent with past practice, includingfile any amended Tax Return, following the Distribution(C) adopt or change any accounting method for Taxes, the Retained Subsidiaries(D) settle or compromise any Tax liability or any audit, shall not have any obligations examination or other proceeding in respect thereof)of Taxes, (GE) Indebtedness under the Bridge Facilitysurrender any claim for a refund of Taxes, refinancings or replacements thereof and of commitments thereunder(F) enter into any closing agreement relating to Taxes, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereofexcept, in each case, so long as to the aggregate principal amount thereof does not exceed $2,500,000,000extent such action would not, (J) hedging individually or in compliance with the hedging strategy aggregate, reasonably be expected to result in a material increase in the Tax liability of the Company and its Subsidiaries taken as a whole (it being agreed and understood that this exception shall not be construed to permit the Company or any of its Subsidiaries, without the approval of Parent (such approval not to be unreasonably withheld, delayed or conditioned), to settle or compromise any Tax liability or any audit, examination or other proceeding in respect of Taxes in excess of $500,000 individually or $3,000,000 in the aggregate);
(xiv) transfer, sell, lease, license, permit to lapse, abandon, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Lien upon other than Permitted Liens, any assets or capital stock of the date Company or any of this Agreement its Subsidiaries, except (A) inventory or Registered Intellectual Property in the ordinary course of business consistent with past practice or (B) having a value not in connection with a Sky Acquisition and excess of $5,000,000 individually or $15,000,000 in the aggregate;
(xv) except as required by any Benefit Plan as in effect on the date hereof, (A) terminate, adopt, establish, enter into, amend or renew any Benefit Plan, other than amendments that do not for speculative purposes; provided that increase benefits or result in increased costs, (B) increase in any manner the compensation, benefits, severance or termination pay of any of the current or former directors or employees of the Company shall consult or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan, other than to the extent permitted by Section 6.9(d), (D) accelerate the vesting of or lapsing of restrictions, or amend the vesting requirements, with Parent prior respect to entering any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new severance, change in control, retention benefit or any other award (other than severance pursuant to separation agreements entered into hedging activities with terminated employees who are not executive officers in connection the ordinary course of business consistent with Indebtedness past practice providing for severance not in excess of that required by applicable Law or a Benefit Plan in effect on the type described in clauses date hereof), (F) take any action to accelerate the payment of, or to fund or secure the payment, of any amounts under any Benefit Plan, (G) hire any (x) executive officer or (y) employee or consultant who is a natural person with a base salary or annualized base wage amount in excess of $150,000, (H) abovepromote any executive officer of the Company or promote any employee to an executive officer position or a position for which the base salary or annualized base wage amount exceeds $150,000, (KI) Indebtedness and replacements and refinancings thereof incurred become a party to, establish, adopt, renew, materially amend, commence participation in connection or terminate any collective bargaining agreement or other agreement with a labor union, works council, public labor authority, or similar organization or (J) terminate without cause the funding employment of Star India Private Limited and its Subsidiaries; provided that any executive officer of the aggregate principal amount Company;
(xvi) factor any receivables or effect any reverse factoring except, solely in the case of such Indebtednessreverse factoring, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;; or
(vxvii) with respect to the Retained Businessagree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;foregoing.
(vic) with respect Subject to the Retained Businessterms of this Agreement, transferincluding Section 6.5 and Section 6.13, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with and prior to the existing terms Effective Time, the Company, Parent and Merger Sub shall not take or permit any of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned their respective Subsidiaries to the Company take or agree to take any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided action that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, to prevent, materially delay impair or materially impair delay the consummation of the Transactions;Merger.
(xd) other than capital expenditures made Nothing contained in accordance this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees From the date hereof until the Acceptance Time, except (A) as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not may be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2B) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution prior written consent of Parent (which consent shall not unreasonably be withheld, conditioned or delayed), (C) as expressly contemplated by the Final Step Plan) this Agreement, or (3D) otherwise expressly disclosed as set forth in Section 5.01(a5.1(a) of the Company Disclosure Letter)Schedule, (x) the Company shall cause the business of the Company and its Subsidiary to be conducted in the ordinary course consistent with past practice and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct (i) preserve intact its and its Subsidiary’s present business organization and maintain the Retained Business current relationships with Governmental Entities and other Persons having business dealings with the Company and its Subsidiary, (ii) prepare and file any requisite regulatory filings with any Regulatory Authority on a timely basis and consistent with their respective past practices and (iii) obtain and maintain quantities of each finished Company Pharmaceutical Product and related raw materials and components that the Company reasonably expects to be required for use in the ongoing and anticipated phase 2 and phase 3 clinical trials of each Company Pharmaceutical Product and (y) without limiting the generality of clause (x) above and in furtherance thereof, the Company shall not and shall not permit its Subsidiary to:
(i) amend its certificate of incorporation, bylaws or comparable governing documents;
(ii) merge or consolidate the Company or its Subsidiary with any other Person, except for such transactions between the Company and its Subsidiary, or dissolve or completely or partially liquidate;
(iii) form any Subsidiary or acquire assets from any other Person with a value or purchase price in the aggregate in excess of $300,000 in any transaction or series of related transactions, other than acquisitions in the ordinary course of business consistent with past practice with a value or purchase price in the aggregate not in excess of $300,000 or pursuant to Material Contracts in effect as of the date hereof;
(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 or its Subsidiary, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than (A) issuance or sales of Shares upon exercise of the Company Options or the vesting of Company Restricted Stock or (B) as permitted under Section 5.1(a)(xviii);
(v) other than in the ordinary course of business consistent with past practice, and the create or incur any Lien on (i) any assets (other than Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(bIntellectual Property) of the Company Disclosure Letter)or its Subsidiary having a value in excess of $300,000, (ii) any material Intellectual Property of the Company shall not and shall not permit any of or its Subsidiaries to:Subsidiary, or (iii) material Intellectual Property licensed to the Company or its Subsidiary;
(ivi) except with respect make any loans, advances, guarantees or capital contributions to SpinCo and the SpinCo Subsidiaries or investments in any Person (other than the Company or its Subsidiary) in excess of $300,000 in the case of clause aggregate;
(A)), vii) (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, accrue, set aside aside, make or pay any dividend or other distribution payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by the Company’s Subsidiary to the Company), (B) repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities, except for any split, combination or reclassification of capital stock of a direct wholly owned Subsidiary of the Company, or indirect any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company to the Company or another direct or indirect wholly owned Subsidiary of the Company or to the Company Company, or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (DC) enter into any agreement with respect to the voting of its capital stock;
(viii) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise) any other Person’s indebtedness for borrowed money, or (E) purchase, repurchase, redeem issue or otherwise sell any debt securities or warrants or other rights to acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms debt security of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchasesits Subsidiary, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $300,000 in the aggregate;
(ix) except as contemplated in capital budgets furnished to Parent prior to the date of this Agreement, make any capital expenditures in excess of $300,000 in the aggregate;
(x) make any changes with respect to accounting policies or procedures other than as required by changes in GAAP;
(xi) settle any litigation for an amount in excess of $300,000;
(xii) other than as reasonably necessary to facilitate the research and/or clinical operations of the Company in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, enter into any Contract that does not materially increase would have been a Material Contract had it been entered into prior to this Agreement;
(xiii) other than as reasonably necessary to facilitate the cost research and/or clinical operations of such the Company Plan in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, amend, modify or benefits provided under such Company Plan based on the cost on terminate any Material Contract;
(xiv) other than pursuant to Contracts in effect prior to the date hereof, (B) grant transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or provide allow to lapse or expire or otherwise dispose of any transaction material assets, licenses, operations, rights or retention bonuses to any director, officer, employee or other service provider businesses of the Company or any its Subsidiary, except for (A) sales, transfers or dispositions of its Subsidiariesobsolete or worthless assets or (B) sales, (C) increase the compensationtransfers, bonus or pensionleases, welfare licenses or other benefits dispositions of any director, officer or employee assets with a fair market value not in excess of the Company or any of its Subsidiaries, except $300,000 in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesaggregate;
(ivxv) incur assign or grant an exclusive license of any Indebtedness material right in any Company Intellectual Property necessary or issue useful for the manufacture, use, sale, offer for sale or importation of any warrants Company Pharmaceutical Products or other rights that otherwise enables a third party to acquire any Indebtedness, except (A) in the ordinary course of business consistent compete with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facilitymanufacture or sale of any product that competes with any Company Pharmaceutical Product;
(xvi) waive any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product and, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (EA) commercial paper issued amend any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product or (B) enter into any Contract that would constitute an IP Contract if entered into prior to the ordinary course date of business consistent with past practice this Agreement;
(xvii) except as contemplated in operating budgets furnished to Parent prior to the date of this Agreement, commence (other than planning) or alter, in a principal amount not manner that would materially increase the expenditures to exceed $250,000,000 in be made by the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses Company in connection therewith, any new Phase I, Phase II, Phase III or Phase IV human clinical trial (including initiation of a new institutional review board) involving any Company Pharmaceutical Product;
(xviii) except as required by applicable Law or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company otherwise required pursuant to existing Contracts or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations Benefit Plans in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company effect as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition hereof and not for speculative purposes; provided that the Company shall consult with Parent prior made available to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) aboveParent, (KA) Indebtedness and replacements and refinancings thereof incurred in connection with increase the funding salaries or wages of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtednessany Employee, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing except in the ordinary course of business consistent with past practice, (B) promote any Employee except in order to fill a position vacated after the date of this Agreement, (C) pay any bonus to any Employee other than a bonus pursuant to Section 5.8(f), (D) enter into or establish any new employment agreement or change in control severance agreement with any Employee, other than with any new Employee hired to replace an Employee who is party to any such agreement, (E) make any severance payments to any Employee in excess of what they are contractually entitled to, (F) make any new equity awards to any Employee or accelerate the vesting under any equity compensation plan (except for vesting accelerated pursuant to Section 3.3 of this Agreement), (G) other than in accordance with Section 5.1(a)(xviii)(D), establish, adopt, terminate or materially amend any Benefit Plan, (H) hire any employee at the level of Vice President or above, (I) hire any employee in a sales, general or administrative capacity with an annual base salary in excess of $150,000, or (J) hire any employee (other than an employee described in clause “(I)” above) with an annual base salary in excess of $250,000;
(vxix) except as required by applicable Law, make, change or rescind any material Tax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to material Taxes, enter into any closing agreement with respect to a material Tax, surrender any right to claim a material Tax refund, or change any material method of Tax accounting;
(xx) enter into or consummate any tax planning or restructuring transaction which involves any transfer, assignment or other disposition of any Company Intellectual Property;
(xxi) (A) waive or amend (except in the course of diligently prosecuting the Company Intellectual Property) the Company’s rights in or to any Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, (B) fail to diligently prosecute or maintain any material Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, in each case in the name of Company or its Subsidiary or (C) fail to make any required payments in accordance with the terms of any IP Contract pursuant to which the Company licenses any material Intellectual Property;
(xxii) qualify any new site for manufacturing of any Company Pharmaceutical Product; or
(xxiii) enter into any Contract to do any of the foregoing.
(b) Each of Parent and Merger Sub, subject to the limitations set forth in Section 5.4(e)(ii), on the one hand, and the Company, on the other hand, agrees that, except as otherwise provided in this Agreement, it shall not knowingly take any action that would reasonably be expected to prevent or delay the consummation of the Offer, the Merger and the other Transactions in accordance with the terms of this Agreement. Without limiting the generality of the foregoing, each of Parent and Merger Sub agrees that, after the date hereof and prior to the Effective Time, it shall not consummate or agree to consummate any purchase or other acquisition of any assets, licenses, operations, rights or businesses that, individually or in the aggregate with any other such purchase or acquisition, would reasonably be expected to (i) prevent or delay the parties hereto from obtaining any consents, registrations, approvals, permits or authorizations required to be obtained from any Governmental Entity in connection with the consummation of the Offer, the Merger and the other Transactions, (ii) result in the imposition of a condition or conditions on any such consents, registrations, approvals, permits or authorizations, or (iii) otherwise prevent or delay any party hereto from performing its obligations hereunder or consummating the Offer, the Merger and the other Transactions.
(c) The Company shall promptly notify Parent and Merger Sub of any significant data relating to the Key Product, including information related to any significant adverse events with respect to the Retained BusinessKey Product.
(d) Each party hereto shall promptly advise the other parties hereto of any Proceeding or material claim threatened, other than commenced or asserted against or with respect to acquisitions any such party relating to the Transactions and promptly provide the parties hereto with copies of businessesall material complaints, which is subject pleadings and filings related thereto.
(e) From the date hereof until the Acceptance Time, the Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to Section 5.01(b)(ix)any Company Pharmaceutical Product, (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of any of the Company or its Subsidiary, and any material correspondence or other than with respect material communication proposed to film and television production and programming (including sports rights) with third parties be submitted or video game productionotherwise transmitted to the FDA or any other Governmental Entity by or on behalf of any of the Company or its Subsidiary, which is subject to Section 5.01(b)(x), make or commit in each case relating to any capital expenditures other than Company Pharmaceutical Product, (iii) keep Parent promptly informed of (A) in connection any communication (written or oral) with or from the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or FDA and any other Governmental Entity and (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(vany material communications (written or oral) of received from any Person relating to the Company Disclosure Letter;
Intellectual Property and (viiv) promptly inform Parent and provide Parent or Merger Sub with respect a reasonable opportunity (but no more than three (3) Business Days) to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensescomment, in each case, of Intellectual Propertyprior to making any material change to any study protocol, adding any new trial, making any material change to a manufacturing plan or process, making any material change to a development timeline or initiating, or making any material change to, promotional or marketing materials or activities relating to any Company Pharmaceutical Product.
(Bf) Notwithstanding the granting above, the delivery of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiariesnotice pursuant to Section 5.1(b), (D5.1(c), 5.1(d) licensesor 5.1(e) shall not limit or otherwise affect the representations, saleswarranties, letting lapsecovenants or agreements of the parties hereto, abandonment and cancellations the remedies available hereunder to the party hereto receiving such notice or the conditions to such party's obligation to consummate the Offer, the Merger or any of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;other Transactions.
(viig) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not Nothing contained in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with shall give Parent or Merger Sub, directly or indirectly, the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries right to control the Company or to any other wholly owned its Subsidiary or direct the business or operations of the Company; provided thatCompany or its Subsidiary prior to the Effective Time. Prior to the Effective Time, for the avoidance Company shall exercise, consistent with the terms and conditions of doubtthis Agreement, granting customary profit participation complete control and supervision over its operations and the operations of its Subsidiary. Nothing in this Agreement, including any of the actions, rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing restrictions set forth herein, shall be deemed not interpreted in such a way as to be an issuanceplace the Company, sale Parent or grant Merger Sub in violation of any shares rule, regulation or policy of capital stock or any securities convertible or exchangeable into or exercisable forGovernmental Entity, or including any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinapplicable Law.
Appears in 1 contract
Interim Operations. Except (a1) The as required by applicable Law, (2) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (3) as expressly disclosed in Section 6.1 of the Company Disclosure Letter, or (4) as expressly required by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First earlier of (x) the Effective Time or (unless Parent y) termination of this Agreement in accordance with Article VIII, the Company shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation use its commercially reasonable efforts to conduct its business and the Distribution or as business of its Subsidiaries in the ordinary course of business, and, to the extent consistent therewith and subject to the restrictions contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in this Section 5.01(a) of the Company Disclosure Letter6.1(a), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to (A) preserve substantially intact its and its Subsidiaries’ business organizations, goodwill, assets, properties and Contracts (B) maintain its existence in good standing under the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental EntitiesLaws of its incorporation or formation, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersC) and keep available the services of its current officers and employees, and (D) preserve its existing relationships with its material customers, suppliers, licensors, licensees, distributors, lessors and other Persons with which the Company and its Subsidiaries’ present employees and agents.
(b) Subsidiaries have business relations. Without limiting the generality of, and in furtherance of, of the foregoing, except (1) as required by applicable Law, (2) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (3) as expressly disclosed in Section 6.1 of the Company Disclosure Letter corresponding to the applicable clause below, or (4) as expressly required by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date execution of this Agreement and prior to the First earlier of (x) the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3y) otherwise expressly disclosed termination of this Agreement in Section 5.01(b) of the Company Disclosure Letter)accordance with Article VIII, the Company shall not and shall will not permit any of its Subsidiaries to:
(a) (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A))amend, (A) amend supplement or otherwise modify its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any wholly owned Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactionstransactions contemplated by this Agreement), (Bii) adjust, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Ciii) declare, set aside or pay any dividend or distribution payable in cash, stock stock, property or property otherwise (or any combination thereof) in respect of of, or enter into any Contract with respect to the voting of, any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure LetterCompany), (D) enter into any agreement with respect to the voting of its capital stock, or (Eiv) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than pursuant to (1) pursuant to the exercise of Company Options or the forfeiture of, or withholding of Taxes with respect to, Company Options, Restricted Stock Units, Company Deferred Stock Units or Company Performance Restricted Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) Units or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(iib) merge or consolidate with any other Person, or restructure, recapitalize, dissolve, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, of any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the TransactionsMerger or the other transactions contemplated by this Agreement), or adopt or effect a plan of complete or partial liquidation or dissolution;
(iiic) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards Company Plan, (A) increase the compensation or benefits payable to any Participant, other than any such action taken (1) de minimis increases in benefits, (2) increases of cash compensation for purposes of replacing, renewing or extending a broadly applicable material Company Plan employees whose annual base salary is less than $220,000 in the ordinary course of business consistent with past practice that does not materially to exceed an aggregate increase the cost of three percent (3%) for all such Company Plan employees or benefits provided under such Company Plan (3) increases of cash compensation for any employee in connection with a promotion based on the cost on the date hereofjob performance or workplace requirements not to exceed a per-employee increase of fifteen percent (15%), (B) grant any new extraordinary bonus, severance, change of control, retention, termination or provide any transaction similar compensation or retention bonuses benefits to any director, officer, employee or other service provider of the Company or any of its SubsidiariesParticipant, (C) increase the compensationadopt, bonus establish or pensionmake any change to any Company Plan or any collective bargaining agreement, welfare or other benefits of any director, officer or employee than changes to Company Plans that are intended to be qualified under Section 401(a) of the Code, or Company Plans that provide health or any of its Subsidiarieswelfare benefits, except in each case, which are made in the ordinary course of business consistent with past practice with respect and do not materially increase such Company Plans’ cost to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeCompany, (D) increase take any action to accelerate the severance vesting of, or termination payments payment of, any compensation or benefits payable to benefit under any director, officer, employee or other service provider of the Company or any of its SubsidiariesPlan, (E) take any action to accelerate fund or in any other way secure the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards)Plan, (F) change hire or terminate the employment of (other than termination for cause) any actuarial Participant with annual base salary or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner fees in which contributions to such plans are made or the basis on which such contributions are determined or excess of $220,000 per year, (G) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement or any other restrictive covenant obligation of any Participant, (H) forgive any loans to directorsany Participant, officers or employees (I) effectuate a “plant closing,” “mass layoff” (each as defined in the Workers Adjustment Retraining Notification Act) or other employee mass layoff event affecting in whole or in part any site of the Company employment, facility or any of its Subsidiariesoperating unit;
(ivd) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, or assume guarantee or otherwise become liable for any Indebtedness for any Person, except (Ai) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in business, borrowings under the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to Company’s Existing Credit Agreement (provided that the Company and its Subsidiaries, taken shall not be permitted to increase the borrowing capacity existing as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after of the date of hereof under the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement ofExisting Credit Agreement), or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (Cii) intercompany inter-company Indebtedness among the Company and its wholly owned Subsidiaries, or (D) (1iii)(A) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2B) overdraft facilities or cash management programs, in the case of each case clauses (A) and (B) issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practicebusiness;
(ve) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to make any capital expenditures other than (A) expenditures, or any obligations or liabilities in connection with the repair or replacement of facilitiestherewith, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less greater than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in on Section 5.01(b)(v6.1(e) of the Company Disclosure LetterSchedules, except for any capital expenditures, or any obligations or liabilities in connection therewith which otherwise do not exceed $1,000,000 individually, or $2,500,000 in the aggregate;
(vif) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game productionupon, letting lapsesurrender, abandonmentdivest, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapsecancel, abandon, cancel, mortgage, pledge, place a Lien upon allow to lapse or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 1,000,000 individually if the transaction is not or $2,500,000 in the ordinary course or $100,000,000 individually in any event or aggregate (Bother than (1) transactions among the Company and its wholly owned Subsidiaries, (2) sales of inventory or obsolete or worthless equipment, in each case, in the Retained Subsidiariesordinary course of business, or (3) leases of equipment to customers in the ordinary course of business);
(viiig) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such sharesCompany Securities, except (Ai) for any Shares issued pursuant to Company Options, Restricted Stock Units, Company Performance Stock Units and Company Deferred Performance Restricted Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, and (Bii) Investment Preferred Stock for any Shares issued in connection with conversions of the Convertible Notes in accordance with and pursuant to the Convertible Notes Indenture, but subject to Section 6.17(a), or disposition of the Capped Call Transactions upon exercise and settlement or termination thereof in accordance with and pursuant to the Capped Call Documentation, but subject to Section 6.17(c), in each case, that are outstanding on the date hereof, and (as defined in the Bridge Facilityiii) for any issuances, sales or (C) by transfers of securities of wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or Company (in each case other rights to acquire, any such shares for purposes of this Section 5.01(b)(viiithan Shares);
(ixh) with respect (i) acquire or commit to acquire any business, whether by merger, purchase of property or assets, consolidation or otherwise or (ii) subject to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(vforegoing clause (i) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x6.1(e), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 1,000,000 individually or $200,000,000 2,500,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of assets or other property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor ;
(i) make any material change with respect to its financial accounting policies or procedures, or revalue in any material respect any of its Retained Subsidiaries shall properties or assets, including writing off notes or accounts receivables, in each case, except as required by changes in GAAP or by applicable Law;
(j) (i) enter into any such transaction that wouldnew line of business, or (ii) start to conduct a line of business of the Company or any of its Subsidiaries in any geographic area where it is not conducted as of the date of this Agreement;
(k) make any loans, advances or capital contributions to, or investments in, any Person (other than extensions of credit to customers in the ordinary course of business, advances to directors, officers and other employees for travel and other business-related expenses, in each case, in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto, or loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company);
(l) (i) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with the terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract or take (or fail to take) any action that would reasonably be expected toto cause or result in a material breach of, preventor material default under, materially delay any Material Contract or materially impair (ii) other than in the consummation ordinary course of business and after consultation with Parent, enter into any Contract that would have been a Material Contract had it been entered into prior to the Transactionsdate of this Agreement; provided, that for the avoidance of doubt, subject to Section 6.1(b), this Section 6.1(l) shall not prohibit or restrict any Company Plans;
(xm) without limiting the rights of Parent under Section 6.16 (Stockholder Litigation), (i) settle, waive, release compromise or otherwise resolve any Proceeding in a manner resulting in liability for, or restrictions on the conduct of the business by, the Company or any of its Subsidiaries, other than settlements, waivers or releases of, or compromises for or resolutions of any Proceeding unrelated to Intellectual Property if the amount of any such settlement is not in excess of $1,000,000 individually or $2,500,000 in the aggregate; provided, that such settlements do not involve any non-de minimis injunctive or equitable relief or impose non-de minimis restrictions on the business activities of the Company and its Subsidiaries or Parent and its Subsidiaries; or (ii) waive any material right with respect to any material claim held by the Company or any of its Subsidiaries; or
(n) fail to maintain, cancel, terminate or allow to lapse without a commercially reasonable substitute therefor, any material License;
(A) other than capital expenditures made in accordance the ordinary course of business, terminate, fail to renew, abandon, cancel, let lapse, fail to continue to prosecute or defend, encumber, license (including through covenants not to ▇▇▇, non-assertion provisions or releases, immunities from suit that relate to Intellectual Property or any option to any of the foregoing), sell, transfer or otherwise dispose of any Company IP; (B) issue, bring, commence, threaten or settle any litigation or other proceedings with Section 5.01(b)(vrespect to any Patent comprised in the Company IP; or (C) and become a member or promoter of, or a contributor to, or make any material commitments or material agreements regarding any patent pool, industry standards body, standard setting organization, industry or other trade association or similar organization, in each case that requires or obligates, or could require or obligate, the Company or any of its Affiliates (including future Affiliates) to grant or offer to any other Person any license or other right to any Intellectual Property;
(p) enter into, or agree to enter into, any Contract that could directly or indirectly obligate or purport to obligate (i) Parent or its Affiliates (other than purchases the Company and licenses its Subsidiaries) or (ii) the Company or any of film its Subsidiaries to cause or require, or purport to cause or require, Parent or its Affiliates (other than the Company and television and production programming its Subsidiaries), in any such case, to (includinA) grant to any other Person (including the counterparty to such Contract and/or its Affiliates) any right to or with respect to any Intellectual Property or (B) be bound by, or subject to, any license or covenant (including any covenant not to ▇▇▇, assert rights or offer fixed or reasonable royalties) with respect to any Intellectual Property; (q) (A) settle any material Tax claim, audit, or assessment for an amount materially in excess (other than by a de minimis amount) of the amount reserved or accrued on the Company Balance Sheet (or most recent consolidated balance sheet included in the Company Reports), (B) change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (C) make any material amendment to any Tax Returns, (D) surrender or waive any right to claim a material Tax refund or (E) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(r) terminate, cancel, make any material changes to the structure or terms, or materially reduce the limits or conditions of any of the Insurance Policies, including allowing the policies to expire without renewing such policies or obtaining comparable replacement coverage, or prejudicing rights to insurance payments or coverage; or
(s) agree, resolve or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts from and after the execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and abandonment of the transactions contemplated by this Agreement pursuant to conduct the Retained Business Article IX (unless Parent shall otherwise approve in the ordinary course of business consistent with past practicewriting (such approval not to be unreasonably conditioned, withheld or delayed)), and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth belowexcept as otherwise expressly required by this Agreement or as is required by applicable Law, use commercially reasonable efforts to preserve conduct its business in all material respects in the Retained BusinessOrdinary Course of Business and shall use and cause each of its Subsidiaries to use their respective commercially reasonable efforts to maintain its and its Subsidiaries’ organization intact and maintain the Retained Business’ existing relations and goodwill with key Governmental Entities, customers, suppliers, distributorsemployees; provided, licensorshowever, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of that no action taken or failed to be taken by the Company and or any of its Subsidiaries’ present employees and agents.
Subsidiaries with respect to the matters addressed by clauses (bi) through (xxii) of this Section 7.1(a) shall be deemed a breach of this Section 7.1(a) unless such action would constitute a breach of such clauses (i) through (xxii). Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatforegoing sentence, from the execution and after delivery of this Agreement until the date earlier of the Effective Time and the termination of this Agreement and prior abandonment of the transactions contemplated by this Agreement pursuant to the First Effective Time (unless Parent shall otherwise approve in writingArticle IX, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) otherwise expressly required or permitted by this Agreement, required by applicable Law, as approved in writing by Parent (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distributionsuch approval not to be unreasonably conditioned, withheld or delayed) or (3) otherwise expressly disclosed as set forth in the applicable subsection of Section 5.01(b7.1(a) of the Company Disclosure Letter)Schedule, the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) except adopt any change in its Organizational Documents (other than, with respect to SpinCo and Organizational Documents of Subsidiaries, in a manner that would not materially restrict the SpinCo operations of the Company’s or any of its Subsidiaries’ businesses);
(ii) merge or consolidate with any other Person or adopt any plan of liquidation, except for mergers or consolidations solely among Wholly Owned Subsidiaries of the Company;
(iii) acquire, directly or indirectly by merger, consolidation, acquisition of stock or assets or otherwise, any business, Person, properties or assets from any other than Person either (A) with a purchase price in excess of $5,000,000 in any individual transaction or in the aggregate, in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or (B) that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement prior to the Outside Date, other than, in the case of clause (A), acquisitions of inventory or other goods in the Ordinary Course of Business pursuant to the terms of a Contract binding on the Company or any of its Subsidiaries in effect as of the date of this Agreement, correct and complete copies of which have been made available to Parent, or entered into following the date of this Agreement in the Ordinary Course of Business;
(iv) transfer, sell, lease, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses material to the Company or any of its Subsidiaries, including capital stock or other equity interests of any of its Subsidiaries outside of the Ordinary Course of Business, except in connection with (A) amend sales of obsolete assets in the Ordinary Course of Business, (B) sales, leases, licenses or other dispositions of assets (not including services) with a fair market value not in excess of $5,000,000 individually or in the aggregate in the Ordinary Course of Business, (C) non-exclusive licenses or other similar rights under Intellectual Property Rights in the Ordinary Course of Business, and (D) sales of inventory or other goods in the Ordinary Course of Business;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity interests of any of its certificate Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of incorporation capital stock or bylaws (other equity interests, or comparable governing documents) any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than amendments (A) proxies solicited by or on behalf of the Company in order to obtain the governing documents Requisite Company Vote in compliance with the terms of any this Agreement or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company that would not preventto the Company or another Wholly Owned Subsidiary of the Company, delay (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect on the Capitalization Date, (3) in respect of Company Equity Awards granted in accordance with the terms and conditions of this Agreement under the Stock Plans in effect on the Capitalization Date or impair (4) pursuant to the Initial Merger ESPP in accordance with its terms and subject to Section 4.3(f));
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries) outside of the Ordinary Course of Business or, to the extent in the Ordinary Course of Business, in excess of $1,000,000 individually or $5,000,000 in the aggregate;
(vii) declare, set aside, make or pay any dividend or other Transactionsdistribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for dividends or other distributions paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company;
(Bviii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, other equity interests or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), other than (1) pursuant the withholding of Shares to satisfy the forfeiture of, payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Taxes Company Equity Awards outstanding as of the date of this Agreement or granted after the date hereof in accordance with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitsthe terms and conditions of this Agreement, in each case case, in accordance with their terms and, as applicable, the Stock Plans as in effect on the Capitalization Date;
(ix) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) Indebtedness for borrowed money incurred in the Ordinary Course of Business not to exceed $5,000,000 individually or in the aggregate or expressly permitted by Section 7.1(a)(vi), (B) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 7.1(a) or (C) Indebtedness that consists of interest rate swaps, ▇▇▇▇▇▇, forward sales contracts or similar financial instruments on customary commercial terms consistent with past practice and in compliance with the terms of the Company Stock Plans as Company’s risk management policies in effect on the date of this Agreement and not to exceed $5,000,000 of notional debt individually or in the aggregate;
(x) make or authorize any payment of, or accrual or commitment for, capital expenditures, except for any such expenditures (A) following prior notice to, and consultation with Parent, to the extent reasonably necessary to avoid a material business interruption as modified after a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or information technology systems, or any other similar cause not reasonably within the date control of the Company or its Subsidiaries or (B) in the Ordinary Course of Business not in excess of $1,000,000 in the aggregate during any consecutive twelve-month period;
(xi) other than with respect to Contracts relating to activities expressly described in any other Subsection of this Agreement Section 7.1(a), which will be governed by those respective Subsections, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers or suppliers entered into in the Ordinary Course of Business and, for the avoidance of doubt, any Contracts entered into in connection with an action expressly permitted by any of the Subsections of this Section 7.1(a), including any amendment, modification or supplement to an existing Contract, which are governed by Section 7.1(a)(xii);
(xii) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(ix), terminate or amend or otherwise modify or waive in a manner that is materially adverse to the Company and its Subsidiaries (taken as a whole), or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in, any Material Contract, other than expirations of any such Material Contract in the Ordinary Course of Business and in accordance with the terms of this Agreement) or (2) purchasessuch Material Contract with no further action by the Company, repurchases, redemptions any of its Subsidiaries or other acquisitions of securities of party to such Material Contract, except for any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Personministerial actions, or restructurenon-exclusive licenses, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are covenants not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongto sue, or the restructuringreleases, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee waivers or other service provider of rights under Intellectual Property Rights owned by the Company or any of its Subsidiaries, in each case, granted in the Ordinary Course of Business;
(Cxiii) increase cancel, modify or waive any debts or claims held by or owed to the compensationCompany or any of its Subsidiaries having in each case a value in excess of $1,000,000 individually or $5,000,000 in the aggregate;
(xiv) amend any License contemplated by Section 5.5(d) in any material respect, bonus or pensionallow any such License to lapse, welfare expire or other benefits terminate (except where the lapse, expiration or termination of any directorsuch License is with respect to a License that has become obsolete, officer redundant or employee no longer required by applicable Law);
(xv) for the avoidance of doubt, except as expressly provided for by Section 7.11, amend, modify, terminate, cancel or let lapse any material Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by the Company or one or more of its Subsidiaries or replacement policies underwritten by reputable insurance carriers are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(xvi) other than with respect to Transaction Litigation, any Proceeding in connection with, arising out of or otherwise related to a demand for appraisal under Section 262 of the DGCL or any material Tax claim, audit, assessment or dispute, which shall be governed by Section 7.13, Section 4.2(f) and Section 7.1(a)(xviii), respectively, settle or compromise any Proceeding for an amount in excess of $5,000,000 in the aggregate or on a basis that would result in the imposition of any Order that would restrict the future activity or conduct of the Company or any of its SubsidiariesSubsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person;
(xvii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or applicable Law;
(xviii) change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, affirmatively surrender any right to claim a refund of a material amount of Taxes, or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax (provided that an extension of time for filing tax returns requested or granted in the Ordinary Course of Business shall not be considered an extension or waiver of the statute of limitations for this purpose);
(xix) cancel, abandon or otherwise allow to lapse or expire any Registered Intellectual Property, except in the ordinary course Ordinary Course of business consistent with past practice with respect to Business or at the end of their statutory terms;
(1xx) employees below except as required by the level terms of Executive Vice President and (2) employees at or above any Company Benefit Plan in effect as of the level date of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changethis Agreement, (DA) increase in any manner the severance or termination payments compensation or benefits payable to of any directoremployee, officer, employee officer or other service provider director of the Company or any of its Subsidiaries, except for increases in annual salary or wage rate in the Ordinary Course of Business and consistent with past practice, (EB) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, in each case including any equity or equity-based awards or any long-term incentive awards, under any Company Benefit Plan, (D) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practiceBenefit Plan, (E) commercial paper issued in the ordinary course of business consistent enter into any transaction bonus, retention, change-of-control or similar agreement or arrangement with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations employee of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have or pay or award any obligations amounts in respect thereof)of the foregoing, (F) hire, engage or promote any employee or engage any independent contractor (who is a natural person) with annual salary or wage rate or consulting fees in excess of $300,000 or (G) Indebtedness under terminate the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements employment of any such refinancing or replacement Indebtedness; provided that executive officer except for a termination for “cause” as determined pursuant to the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 terms of the applicable Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceBenefit Plan;
(vxxi) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with respect to the Retained Businessa labor union, labor organization, works council or similar organization;
(xxii) enter into any material new line of business;
(xxiii) enter into any Contract or take any other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth action as described in Section 5.01(b)(v7.1(a)(xxiii) of the Company Disclosure Letter;Schedule; or
(vixxiv) with respect to the Retained Businessagree, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;foregoing.
(xb) other than capital expenditures made Nothing set forth in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinthis 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 the Parent’s or its Subsidiaries’ operations prior to the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company shall not knowingly take or permit any of its Subsidiaries to take any action or refrain from taking any action the result of which would be reasonably and foreseeably likely to prevent the consummation of the Merger by the Termination Date, except as expressly and specifically permitted by Section 6.2. The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (Time, unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and except as (1) otherwise expressly contemplated by this Agreement or as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the present employees and agents of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents this Agreement, (including B) as Parent may approve in connection with the Separation and the Distributionwriting (such approval not to be unreasonably withheld or delayed) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b6.1(i) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 1 contract
Interim Operations. (a) The From the date of this Agreement until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company covenants and agrees as to itself and each of its Subsidiaries thatthat it will use its commercially reasonable efforts, from and after the execution date of this Agreement and prior to until the First Effective Time (Time, unless Parent shall otherwise approve in writing, which approval to cause the business of it and its Subsidiaries to be conducted, in all material respects, in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall not be unreasonably withhelduse their respective commercially reasonable efforts to (a) preserve their business organizations, conditioned or delayed, assets and except as (1) required by applicable Lawlines of business intact, (2b) expressly required maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations that are material to the Company and its Subsidiaries, taken as a whole, (c) maintain all leases and all personal property (reasonable wear and tear excepted) that are material to the Company and its Subsidiaries, taken as a whole, used by the Transaction Documents (including in connection with the Separation Company and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts and necessary to conduct the Retained Business its business in the ordinary course of business consistent with past practicepractice (but with no obligation to renew or extend any lease or to otherwise exercise any rights or options it may have under any lease, including but not limited to rights to purchase or increase or decrease its current properties) and the Company shall, (d) maintain in all material respects its and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ their existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement in accordance with its terms, except (unless A) as otherwise expressly required by this Agreement, (B) as Parent shall otherwise approve may consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable LawLaws or definitive interpretations thereof or by any Governmental Entity, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b) 4.1 of the Company Disclosure Letter), the Company shall not will not, and shall will not permit any of its Subsidiaries Subsidiaries, to:
(i) except with respect adopt any amendments to SpinCo and the SpinCo Subsidiaries (other than its charter or bylaws or, in the case of clause any Subsidiary that is not a corporation, similar applicable organizational documents;
(A)), ii) (A) amend its certificate adopt a plan of incorporation complete or bylaws (partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or comparable governing documents) other reorganization (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactionsthis Agreement), (B) splitacquire by merging or consolidating with, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary purchasing an equity interest in or portion of the Company which remains a wholly owned Subsidiary after consummation assets of such transaction(other than as set forth in Section 4.1(iii)), or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, (C) declaretake or omit to take any action that would cause any rights under Material Intellectual Property, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement including with respect to the voting of its capital stockany registrations or applications for registration, to lapse, be abandoned or cancelled, or (E) purchasefall into the public domain, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, actions or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan omissions in the ordinary course of business consistent with past practice that does and not materially increase the cost otherwise in violation of such Company Plan this Section 4.1, or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance enter into a joint venture or termination payments partnership or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equitysimilar third-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesparty business enterprise;
(iviii) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtednessassets or capital stock from any other Person, except (A) in the ordinary course other than acquisitions of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing assets in the ordinary course of business consistent with past practice;
(viv) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, licenseissue, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sellof, grant, transfer, or encumber, or authorize the issuance, deliverysale, salepledge, disposition, grant, transfer or encumbrance of, any shares of its capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options and the settlement of RSU Awards and PSU Awards (and dividend equivalents thereon, if applicable) outstanding on the date of this Agreement or (B) the issuance of shares of capital stock by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company or (C) the issuance, sale, pledge, disposition of, grant, transfer, encumbrance, or authorization of the issuance, sale, pledge, disposition, grant, transfer or encumbrance of capital stock of any Subsidiary of the Company in connection with financing arrangements not restricted under this Agreement) or securities convertible or exchangeable into or exercisable forfor any shares of such capital stock, or any options, warrants or other rights of any kind to acquireacquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(v) other than trade credit or otherwise in an amount not to exceed $5,000,000 in the aggregate, in each case, in the ordinary course of business, make any such sharesloans, except advances or capital contributions to or investments in any Person;
(vi) (A) declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or other property, with respect to its capital stock, except for dividends by any wholly owned direct or indirect Subsidiary of the Company to the Company or any other wholly owned direct or indirect Subsidiary of the Company, (B) split, combine or reclassify the Shares issued pursuant or any other outstanding capital stock of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution therefor, (C) redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of the Company, except for acquisitions, or deemed acquisitions, of Shares or other equity securities of the Company in connection with (1) the satisfaction of Tax withholding obligations with respect to Company Restricted Stock UnitsOptions, RSU Awards or PSU Awards outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Performance Stock Units and Company Deferred Stock Units Options outstanding on the date of this Agreement with Shares (including in accordance connection with “net exercises”) and (3) forfeitures of Company Options, RSU Awards or PSU Awards outstanding on the existing date of this Agreement, in the case of each of (1), (2) and (3), pursuant to their terms as in effect on the date of this Agreement, and except for acquisitions or deemed acquisitions of Shares or other equity securities of the Company or any of its wholly owned Subsidiaries by the Company or any of its wholly owned Subsidiaries, or (D) enter into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of the Company’s capital stock or other Rights of the Company or any of its Subsidiaries; provided that nothing contained herein shall prohibit dividends and distributions paid or made on a pro rata basis by direct or indirect Subsidiaries of the Company in the ordinary course consistent with past practice;
(vii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for any Indebtedness or otherwise modify the terms of such awards and any Indebtedness, other than Indebtedness incurred under existing revolving credit facilities of the Company Stock Plansfor working capital purposes in the ordinary course of business in an amount not to exceed $150,000,000 in the aggregate (provided that Parent’s prior written consent shall be required in respect of any incremental incurrence of Indebtedness thereunder in excess of $5,000,000). “Indebtedness” of any Person means (A) all indebtedness for borrowed money, (B) Investment Preferred Stock (as defined in the Bridge Facility) any other indebtedness which is evidenced by a note, bond, indenture, debenture or similar Contract, (C) by wholly owned Subsidiaries all capitalized lease obligations of such Person or obligations of such Person to pay the Company or to any other wholly owned Subsidiary deferred and unpaid purchase price of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Businessproperty and equipment, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not trade payables incurred in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any of business, whether by merger(D) all obligations of such Person pursuant to securitization or factoring programs or arrangements, consolidation(E) all guarantees and arrangements having the economic effect of a guarantee of such Person of any other Indebtedness of any other Person, purchase (F) net cash payment obligations of property such Person under swaps, options, derivatives and other hedging agreements or assets, licenses or otherwise arrangements that will be payable upon termination thereof (valuing any non-cash consideration at its fair market value as of assuming they were terminated on the date of the agreement for determination), and (G) reimbursement obligations under (i) letters of credit, bank guarantees and other similar contractual obligations entered into by or on behalf of such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldPerson or (ii) surety, customs, reclamation or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) performance bonds other than capital expenditures made those entered into in accordance the ordinary course of business consistent with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinpast practice.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, from and after the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement in accordance with Article IX (the “Interim Period”) (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), except as otherwise expressly required by this Agreement or except as required by applicable Law), conduct its business in the Ordinary Course of Business and use its commercially reasonable best efforts to conduct its business in accordance with applicable Law, to the Retained Business in the ordinary course of business extent consistent with past practicethe foregoing, shall use and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable efforts to preserve the Retained Businessmaintain its and its Subsidiaries’ organization intact business and maintain the Retained Business’ existing assets and relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees employees, agents and business associates and others having material business dealings with the Retained Business (including material content providersassociates; provided that, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees Subsidiaries shall be permitted to take commercially reasonable actions as reasonably required to comply with COVID-19 Measures (provided, further that to the extent reasonably practicable, in connection with taking any such actions which would otherwise be prohibited by any provision of this Agreement, the Company shall provide advance notice to Parent (and agents.
(bif advance notice is not reasonably practicable, shall provide notice to Parent promptly following the taking of any such actions) and reasonably consult in good faith with Parent with respect thereto). Without limiting the generality of, of and in furtherance ofof the foregoing sentence, during the foregoingInterim Period, the Company covenants and agrees except as otherwise expressly contemplated or required by this Agreement, required by applicable Law, as approved in writing by Parent (such approval not to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentationexcept that Parent may withhold, and except as (1) required condition or delay approval of actions contemplated by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the DistributionSection 7.1(a)(iii) or (3Section 7.1(a)(iv) otherwise expressly disclosed in Parent’s sole discretion), or set forth in the corresponding subsection of Section 5.01(b7.1(a) of the Company Disclosure Letter), the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) adopt or publicly propose any change in its Organizational Documents (other than to correct scrivener’s errors or immaterial or ministerial amendments);
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, deconsolidate any of the JVs or restructure, reorganize, recapitalize or completely or partially liquidate or dissolve (provided, that the Company may effect or cause to be effected the actions referred to in this clause (ii) to the extent they involve only the Company’s Wholly Owned Subsidiaries and are reasonably required to be undertaken to effectuate transactions otherwise permitted under clauses (iii) or (iv) below);
(iii) acquire, directly or indirectly by merger, consolidation, acquisition of stock or assets or otherwise, any business, Person or assets from any other Person with a fair market value or purchase price in excess of $7,500,000 in any individual transaction or series of related transactions or $30,000,000 in the aggregate, in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement;
(iv) transfer, sell, lease, divest, cancel, abandon, allow to expire or lapse, license, outsource or otherwise dispose of, or grant any Encumbrance (other than any Permitted Encumbrance) upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights) of the Company or any of its Subsidiaries or product lines or businesses of the Company or any of its Subsidiaries, except (A) other than with respect to SpinCo Intellectual Property Rights and outsourcing, in connection with services provided in the SpinCo Subsidiaries Ordinary Course of Business, (B) expiration, abandonment or sales of obsolete or unused assets in the Ordinary Course of Business, (C) sales, leases, licenses, outsourcing or other dispositions of tangible assets with a fair market value not in excess of $2,000,000 individually or $5,000,000 in the aggregate, (D) with respect to Intellectual Property Rights, non-exclusive grants of licenses in the Ordinary Course of Business and (E) the grant of Encumbrances to secure Indebtedness permitted by Section 7.1(a)(ix);
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract or other agreement, understanding or arrangement (whether oral or written) with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock, or any options, warrants or other rights of any kind to acquire any such shares of capital stock or such convertible or exchangeable securities (other than in the case of clause (A)), (A) amend its certificate proxies or voting agreements solicited by or on behalf of incorporation the Company in order to obtain the Requisite Company Vote or bylaws in connection with any annual meeting of the Company’s stockholders or (or comparable governing documentsB) the issuance of shares of such capital stock (other than amendments to the governing documents of any 1) by a Wholly Owned Subsidiary of the Company that would not preventto the Company or another Wholly Owned Subsidiary of the Company, delay (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, issuances under the Stock Plans (in either case, to the extent disclosed in Section5.2(d) of the Company Disclosure Letter) or impair (3) pursuant to the Initial Merger ESPP in accordance with its terms and subject to Section 4.2(c));
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries) outside the Ordinary Course of Business in excess of $2 million individually or $10 million in the aggregate;
(vii) declare, set aside, make or pay any dividend or other Transactionsdistribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares), except for (Bi) dividends or distributions paid by any Wholly Owned Subsidiary to the Company, (ii) dividends or distributions to any other Wholly Owned Subsidiary of the Company, or (iii) to the extent any such dividend or other distribution is in accordance with the requirements of the joint venture, operating or similar Contract of any of the JVs;
(viii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares) (provided, that the Company may effect or cause to be effected the actions referred to in this clause (viii) to the extent they involve only the Company’s Wholly Owned Subsidiaries and are reasonably required to be undertaken to effectuate transactions otherwise permitted under clauses (iii) or (iv) above);
(ix) redeem, repurchase or prepay (other than prepayment of revolving loans), assume, guarantee, issue, incur, endorse or otherwise become liable for or modify the terms of any Indebtedness (including the issuance of any debt securities or any warrants or other rights to acquire any debt security) or enter into any hedging agreements, except for (subject, in each case, to Section 7.1(a)(xii)) (A)
(1) pursuant Indebtedness of the type contemplated by clauses (a) and (b) of the definition thereof in the Ordinary Course of Business up to $25,000,000 and (2) other Indebtedness in the Ordinary Course of Business up to $10,000,000, (B) drawdowns under the Credit Agreement up to $50,000,000, (C) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 7.1(a), (D) Indebtedness between the Company and any of its Wholly Owned Subsidiaries or between one Wholly Owned Subsidiary of the Company and another Wholly Owned Subsidiary of the Company, (E) hedging agreements entered into in the Ordinary Course of Business and not for speculative purposes, (F) extensions or renewals of any outstanding Indebtedness in the Ordinary Course of Business that do not include the addition, renewal or modification of any call protection or similar provisions or other restrictions or limitations on prepayment or repayment, or (G) refinancings or replacements of any outstanding Indebtedness on terms that are substantially similar to the forfeiture terms of such outstanding Indebtedness or are otherwise more favorable to the Company and its Subsidiaries; provided, that any Indebtedness assumed, guaranteed, issued or incurred by the Company or any of its Subsidiaries or for which the Company or any of its Subsidiaries otherwise becomes liable under this Section 7.1(a)(ix) shall permit prepayment at any time without penalty of any kind;
(x) make or authorize any payment of, or withholding accrual or commitment for, capital expenditures, except (1) capital expenditures in 2022 in an amount not in excess of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms 5% of the aggregate amount set forth in the Company’s 2021 capital budget plan and (2) subject to prior consultation with Parent, any additional capital expenditures not described in clause (1) so long as the aggregate amount of such capital expenditures made pursuant to this clause (2) do not exceed $15 million; provided, however, subject to prior consultation with Parent, that the Company Stock Plans as and its Subsidiaries shall be permitted to make emergency capital expenditures in effect on any commercially reasonable amount that the Company determines is necessary to maintain its ability to operate its businesses in the Ordinary Course of Business;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement Agreement, other than Contracts entered into in the Ordinary Course of Business; provided, however, that in no event may the Company take any of the foregoing actions with respect to any Tax “hold harmless,” sharing, allocation or indemnification agreement or arrangement (other than, in each case, (x) such agreements or arrangements solely between or among the Company and any of its Wholly Owned Subsidiaries, (y) such agreements or arrangements contained in commercial contracts entered into, amended or terminated in the Ordinary Course of Business the principal subject of which is not Taxes and (z) customary Tax indemnification or Tax benefit provisions contained in merger agreements, stock purchase agreements, asset purchase agreements or other business combination agreements entered into in accordance with Section 7.1(a)); provided, further, that in the event that the Company engages in any discussion to enter into any new JV (and prior to requesting Parent’s written consent to enter into the relevant limited liability company agreement to establish such JV) the Company shall notify Parent of any such discussion as modified after soon as reasonably practicable following such discussion (including, for the date avoidance of this Agreement doubt, any discussions disclosed in Section 5.11(a)(xiii) of the Company Disclosure Letter);
(xii) terminate, fail to renew or amend, modify, supplement or waive, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in, any Material Contract, other than terminations, expirations or non-renewals of any such Contract in the Ordinary Course of Business and in accordance with the terms of this Agreement) or (2) purchasessuch Contract with no further action by the Company, repurchases, redemptions any of its Subsidiaries or other acquisitions party to such Contract, except for any ministerial actions or non-exclusive licenses under Company Intellectual Property, in each case, granted by a licensor in the Ordinary Course of securities of Business;
(xiii) cancel, modify or waive any wholly owned Subsidiary of the Company debts or claims held by or owed to the Company or any other wholly owned Subsidiary of its Subsidiaries having in each case a value in excess of $2,000,000 individually or $10,000,000 in the Company)aggregate outside the Ordinary Course of Business;
(iixiv) merge other than in the Ordinary Course of Business, reduce the amount of insurance coverage or consolidate fail to use commercially reasonable efforts to renew or replace any existing Insurance Policies;
(xv) other than with respect to Transaction Litigation, any other PersonProceeding in connection with, arising out of or otherwise related to a demand for appraisal under Section 262 of the DGCL or any Tax claim, audit, assessment or dispute, which shall be governed by Sections 7.15, 4.3(f) and 7.1(a)(xvii), respectively, settle or compromise any Proceeding for an amount in excess of $2 million individually or $10 million in the aggregate, or restructure, reorganize or completely or partially liquidate which would reasonably be expected to (other than transactions of the type contemplated by Section 5.01(b)(viiA) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required consummation of the transactions contemplated by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofthis Agreement, (B) grant have a materially negative impact or provide impose any transaction material restriction on the operations of the Company and its Subsidiaries or retention bonuses to (C) involve any directorcriminal liability, officer, employee any admission of material wrongdoing or other service provider of any material wrongful conduct by the Company or any of its Subsidiaries;
(xvi) make any changes with respect to accounting policies, procedures, methods, principals or practices, except as required by changes in GAAP or applicable Law;
(xvii) make, change or revoke any material Tax election; change an annual Tax accounting period; adopt or change any material Tax accounting method; file any material amended Tax Return; enter into any closing agreement with respect to material Taxes; settle or compromise any material Tax claim, audit, assessment or dispute; surrender any right to claim a refund of a material amount of Taxes; or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax;
(xviii) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement, as may be required to comply with applicable Law or as set forth on Section 5.13(a) of the Company Disclosure Letter, (A) increase in any manner the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement, (C) increase grant any new awards, or amend or modify the compensation, bonus or pension, welfare or other benefits terms of any directoroutstanding awards, officer or employee of the under any Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeBenefit Plan, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards)Benefit Plan, (FE) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (GF) forgive any loans or issue any loans to directorsany Company Employee (other than routine travel advances issued in the Ordinary Course of Business), officers (G) hire any employee or employees engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of $200,000 or (H) terminate the employment or service of any Company Employee with an annual salary or wage rate or consulting fees in excess of $200,000 other than for cause;
(xix) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization;
(xx) enter into any new line of business;
(xxi) amend, terminate or allow to lapse any material Licenses held by the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 1 contract
Sources: Merger Agreement (LHC Group, Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), ,
(A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinor
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. 6.1.1 PSI shall, and PSI shall cause Phoenix to: (a) The Company covenants carry on its business only in the Ordinary Course of Business substantially the same manner as heretofore conducted; (b) except as they may expire or be terminated by any other party thereto, keep in full force and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayedeffect, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) not cause a default of the Company Disclosure Letter), the Company shall, and shall cause each any of its Subsidiaries toobligations under, use its reasonable best efforts to conduct any PSI Commitments; (c) keep in full force and effect the Retained Business insurance coverage in effect on the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely date hereof to the extent related that such insurance continues to the Retained Businessbe reasonably available; (d) maintain, subject to compliance with the specific matters set forth belowrenew, keep in full force and effect and preserve its business organization and material rights and Licenses and use commercially reasonable efforts to preserve the Retained Business’ organization intact (i) retain its present employee force and (ii) maintain its existing, or substantially equivalent, relationships with others having business relations with it and to use commercially reasonable efforts to maintain the Retained Business’ existing relations continuance of its general customer and goodwill supplier relationships; and (e) duly comply with Governmental Entitiesall Laws applicable to it and to the conduct of its business, customersexcept where the failure to so comply would not, suppliersindividually or in the aggregate, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings have a PSI Material Adverse Effect.
6.1.2 Except with the Retained Business (including material content providersprior written consent of IVAX or as otherwise required or permitted by this Agreement or as contemplated by Schedule 6.1, studiosPSI shall not, authorsand PSI shall cause Phoenix to not, producersdirectly or indirectly, directors, actors, performers, guilds, announcers and advertisers) and keep available the services do any of the Company and its Subsidiaries’ present employees and agents.
following: (ba) Without limiting the generality ofvoluntarily or involuntarily sell, and in furtherance oftransfer, the foregoingsurrender, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date abandon or dispose of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
properties, assets or rights (itangible or intangible) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case Ordinary Course of clause Business or disclose any material proprietary or confidential information to any third party not a party to a written confidentiality agreement with or otherwise under an obligation of confidentiality to PSI or Phoenix; (A)b) make any mortgage or pledge or subject itself or its properties or assets to any Lien, except for the Lien of current Taxes or assessments not yet delinquent, Liens and deposits (including mechanics’, materialmen’s and other similar Liens) arising in the Ordinary Course of Business securing amounts not yet due and payable; (c) enter into or materially amend any Contract except in the Ordinary Course of Business; (d) grant any increase in the compensation payable or to become payable to officers or employees (including, without limitation, any such increase pursuant to any bonus, pension, profit-sharing plan or other PSI Plan or commitment), except in the Ordinary Course of Business or pursuant to the provisions of existing obligations; (Ae) incur, assume or take any property subject to any liability, except in the Ordinary Course of Business; (f) alter the manner of keeping its books, accounts or records, or change in any manner the accounting practices therein reflected, other than alterations or changes required by GAAP or applicable Law; (g) dispose of or permit a lapse (to the extent that such lapse is reasonably preventable) of any rights to any material intangible personal property, including, without limitation, Intellectual Property, other than in the Ordinary Course of Business; (h) amend its certificate Certificate of incorporation Incorporation or bylaws Bylaws; (i) expend or comparable governing documentscommit to expend funds for capital additions in excess of fifty thousand dollars ($50,000) that is not reflected in either the 2004 or 2005 Capital Additions Budgets previously made available to IVAX or its representatives; (other than amendments to j) adopt or amend any PSI Plan; (k) cancel, waive or release any debts, rights or claims, except in the governing documents Ordinary Course of Business, but in no event in excess of two hundred fifty thousand dollars ($250,000); (l) write off the value of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (inventory or any combination thereof) accounts receivable or increase the reserves for obsolete, damaged, spoiled or otherwise not useable inventory or uncollectible receivables, except in respect of any shares of its capital stock accordance with GAAP; (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (Dm) enter into any agreement indemnification, severance, employment or consulting Contract with respect to any Person who is not a current officer, employee or consultant of PSI or Phoenix other than in the voting Ordinary Course of its capital stockBusiness, or (E) purchaseenter into any indemnification, repurchaseseverance, redeem employment or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate consulting Contract with any other Personcurrent officer, employee or restructure, reorganize consultant of PSI or completely or partially liquidate Phoenix; (n) enter into any transaction with an Affiliate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which with customers and suppliers who are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or Affiliates entered into in the ordinary course Ordinary Course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all Business for goods or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or services on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not at prices customary for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) arm’s-length transactions with third parties for such goods and services); (o) issue, sell or video game productionauthorize for issuance or sale, which is subject to Section 5.01(b)(x)shares of any class or series of its securities (including, make without limitation, by way of stock split or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000dividend) or any subscriptions, options, warrants, rights or convertible securities or enter into any agreements or commitments of any character obligating it to issue or sell any such securities; (Bp) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017redeem, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon purchase or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses acquire, directly or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance ofindirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable foroption, or any options, warrants warrant or other rights right to acquire, purchase or acquire any such shares; (q) declare or pay any dividend or other distribution (whether in cash, except stock or other property) with respect to its capital stock (Aother than the quarterly dividend on the PSI S▇ ▇▇▇▇ A Preferred Stock and the PSI Series B Preferred Stock that shall continue to accrue in accordance with the terms of PSI’s Certificate of Incorporation but shall not be paid in cash); (r) for any Shares issued pursuant to Company Restricted Stock Unitsother than in the Ordinary Course of Business, Company Performance Stock Units and Company Deferred Stock Units outstanding enter into a new Contract, which if in existence on the date of this Agreement would have been at forth on Schedule 3.28.1 as a PSI Commitment, or amend, terminate or elect not to renew any PSI Commitment; (s) except as permitted by this Section 6.1.2, take or omit to take any action which would render any of PSI’s or Phoenix’s representations or warranties materially untrue or misleading, which would be a material breach or violation of any of PSI’s or Phoenix’s covenants or which would render the satisfaction of any condition to the Closing impossible; (t) take any action which results or could reasonably be expected to result in accordance a PSI Material Adverse Effect; or (u) agree, whether in writing or otherwise, to do any of the foregoing. In addition, neither PSI nor Phoenix shall incur or pay expenses for professional services performed prior to the Closing in connection with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) transactions contemplated by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend Agreement in excess of (A) an aggregate of $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin575,000.
Appears in 1 contract
Sources: Stock Purchase Agreement (Ivax Corp)
Interim Operations. (a) The Company covenants L3 and agrees ▇▇▇▇▇▇ each covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent L3 or ▇▇▇▇▇▇, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Law or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a8.1(a) of the Company such Party’s Disclosure Letter), the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in all material respects in the Ordinary Course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees Employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees officers, Employees and agents.
(b) , except as otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless Parent shall otherwise approve i) expressly contemplated by this Agreement, (ii) required by a Governmental Entity or applicable Law or the terms of any Material Contract or Benefit Plan existing as of the date of this Agreement, (iii) as approved in writing, writing by the other Party (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3iv) otherwise expressly disclosed set forth in Section 5.01(b8.1(a) of the Company such Party’s Disclosure Letter), the Company each Party, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to such Party’s Organizational Documents or, except for amendments that would not materially restrict the operations of such Party’s businesses, the Organizational Documents of any of such Party’s Subsidiaries;
(ii) other than in the Ordinary Course, except for any such transactions among its wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with any other Person, or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets outside of the Ordinary Course from any other Person (A) with a fair market value or purchase price in excess of $200 million in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or (B) that would reasonably be expected to prevent, materially delay or materially impair the ability of L3 or ▇▇▇▇▇▇, as applicable, to consummate the Transactions, in each case, other than acquisitions of inventory or other goods in the Ordinary Course;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case issuance of clause (A)), shares (A) amend by its certificate wholly owned Subsidiary to it or another of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)its wholly owned Subsidiaries, (B) splitin respect of equity-based awards outstanding as of the date of this Agreement, combineor (C) granted in accordance with Section 8.1(a)(xviii), subdivide the ESPP or reclassify its outstanding each Party’s 401(k) Plans, in each of clauses (B) and (C), in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(except for v) create or incur any Encumbrance (other than any Permitted Encumbrances) over any material portion of such transaction by a Party’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the Ordinary Course on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from L3 and any of its wholly owned subsidiary Subsidiaries or to or from ▇▇▇▇▇▇ and any of the Company which remains a its wholly owned Subsidiary after consummation Subsidiaries, as applicable, or in accordance with Section 8.1(a)(xviii)) in excess of such transaction), $50 million in the aggregate;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary Subsidiary); provided, that (A)(1) ▇▇▇▇▇▇ may make, declare and pay one regular quarterly cash dividend in each quarter of the Company or to year ending June 28, 2019 in an amount per share of $0.685 per quarter with a record date consistent with the Company or record date for each quarterly period of the year ended June 29, 2018 and (2) normal semiannual from and after July 1, 2019, ▇▇▇▇▇▇ may make, declare and pay one regular quarterly cash dividends on the Common Stock as described dividend in Section 5.01(b)(i) each quarter of the Company Disclosure Letteryear ending June 30, 2020 in an amount per share up to $0.055 higher than the dividend paid for the same quarterly period of the year ended June 28, 2019 and with a record date consistent with the record date for each quarterly period of the year ended June 28, 2019, if, in the case of clauses (1) and (2), ▇▇▇▇▇▇ provides L3 with written notice of each record date it will select at least twenty (D20) enter into any agreement with respect Business Days prior to the voting declaration date in respect of its capital stocksuch applicable record date and (B)(1) L3 may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2018 in an amount per share of $0.80 per quarter and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2017 and (2) from and after January 1, 2019, L3 may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2019 in an amount per share up to $0.05 higher than the dividend paid for the same quarterly period of the year ended December 31, 2018 and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2018, if, in the case of clauses (1) and (2), L3 provides ▇▇▇▇▇▇ with written notice of each record date it will select at least twenty (20) Business Days prior to the declaration date in respect of such applicable record date, in each case, solely to the extent such payment is coordinated pursuant to, and permitted by, Section 8.17;
(viii) reclassify, split, combine, subdivide or redeem, purchase (Ethrough such Party’s share repurchase program or otherwise) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toto (A) the capital stock or other equity interests of a wholly owned Subsidiary of L3 or ▇▇▇▇▇▇, Company Restricted Stock Units, Company Deferred Stock Units as applicable; (B) net withholding upon the exercise or Company Performance Stock Units, in each case settlement of equity-based awards outstanding as of the date of this Agreement or granted in accordance with past practice Section 8.1(a)(xviii) in the Ordinary Course and in accordance with their terms and, as applicable, the terms of the Company Stock Plans plan documents as in effect on the date of this Agreement Agreement; or (or as modified after C) such Party’s matching contributions to its 401(k) Plans in the date form of this Agreement capital stock in the Ordinary Course and in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan plan documents as in effect on the date hereof: of this Agreement;
(ix) except to the extent expressly provided by, and consistent with, Section 8.1(a)(ix) of such Party’s Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (A) establish, adopt, amend or terminate any to the extent reasonably necessary to avoid a material Company Plan or amend the terms business interruption as a result of any outstanding equity-based awards act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or IT Assets, or any other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in similar cause not reasonably within the ordinary course of business consistent with past practice that does not materially increase the cost control of such Company Plan Party or benefits provided under such Company Plan based on the cost on the date hereofits Subsidiaries, (B) grant not in excess of $50 million in the aggregate during any consecutive twelve (12) month period (other than capital expenditures within the thresholds set forth in Section 8.1(a)(ix) of such Party’s Disclosure Letter), or provide (C) expenditures that such Party reasonably determines are necessary to maintain the safety and integrity of any transaction asset or retention bonuses property in response to any directorunanticipated and subsequently discovered events, officeroccurrences or developments (provided that L3 or ▇▇▇▇▇▇, employee as applicable, will use its reasonable best efforts to consult with the other Party prior to making or agreeing to any such capital expenditure);
(x) other than in the Ordinary Course, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or amend, modify, supplement, waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract other than (A) expirations of any such Contract in the Ordinary Course in accordance with the terms of such Contract, or (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other service provider of the Company rights under Intellectual Property owned by L3 and its Subsidiaries or ▇▇▇▇▇▇ or any of its Subsidiaries, (C) increase the compensationas applicable, bonus or pensionin each case, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except granted in the ordinary course of business consistent with past practice Ordinary Course;
(xi) other than in the Ordinary Course or with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior amounts that are not material to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company Party and its Subsidiaries, taken as a whole, cancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries;
(xii) settle or compromise, or offer or propose to settle or compromise any material Proceeding, including before a Governmental Entity, except in accordance with the parameters set forth in Section 8.1(a)(xii) of such Party’s Disclosure Letter; provided that no such settlement or compromise, or offer in respect thereof, may involve any injunctive or other non-monetary relief which, in either case, imposes any material restrictions on the business operations of such Party and its Subsidiaries or Affiliates;
(xiii) make any changes with respect to its material accounting policies or procedures, except as required by changes to GAAP;
(xiv) other than existing Indebtednessin the Ordinary Course, and make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any Tax Return other than on a basis consistent with past practice, enter into any material closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a maturity date no more than 10 years after the date refund of a material amount of Taxes, or agree to an extension or waiver of the Contract evidencing such Indebtedness, (B) except statute of limitations with respect to the Bridge Facilityassessment or determination of any material Tax;
(xv) transfer, in replacement sell, lease, divest, cancel or otherwise dispose of, or permit or suffer to refinanceexist the creation of any Encumbrance upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for in connection with (A) sales of goods or services provided in the Ordinary Course, (B) sales of obsolete assets, and (C) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiariesnot including services) with a fair market value not in excess of $50,000,000 individually if the transaction is not 100 million in the ordinary course aggregate other than pursuant to Material Contracts or $100,000,000 individually Party Government Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with this Agreement;
(xvi) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property that is material to the existing businesses of L3 and its Subsidiaries or ▇▇▇▇▇▇ and its Subsidiaries, as applicable, taken as a whole, as each are currently conducted;
(xvii) amend or fail to comply with L3’s and its Subsidiaries’ or ▇▇▇▇▇▇’ and its Subsidiaries’ or, as applicable, privacy and security policies, or alter the operation or security of any IT Assets owned, used or held for use in the operation of L3’s and its Subsidiaries’ or ▇▇▇▇▇▇’ and its Subsidiaries’ businesses, as applicable, in each case, in a manner that would be materially less protective of any confidential or proprietary information that is owned by or in the possession or control of L3 or any of its Subsidiaries or ▇▇▇▇▇▇ or any of its Subsidiaries, as applicable, including any information stored on or processed by such IT Assets;
(xviii) increase or change the compensation or benefits payable to any Employee other than in the Ordinary Course, provided that, notwithstanding the foregoing, except as expressly disclosed in Section 8.1(a)(xviii) of such Party’s Disclosure Letter or pursuant to a L3 Benefit Plan or ▇▇▇▇▇▇ Benefit Plan, as applicable, in effect as of the date of this Agreement, the Parties shall not: (A) grant any new long-term incentive or equity-based awards, or amend or modify the terms of any such outstanding awards under any L3 Benefit Plan or ▇▇▇▇▇▇ Benefit Plan, as applicable; (B) grant any transaction or retention bonuses; (C) increase or change the compensation or benefits payable to any executive officer (other than changes in benefits that are generally applicable to all salaried Employees in the particular geographic region and that are made in the Company Stock PlansOrdinary Course); (D) increase or change the severance terms applicable to any Employee, except that both Parties may pay severance benefits in amounts that would not exceed the levels that would be payable under ▇▇▇▇▇▇’ ▇▇▇▇▇▇▇▇▇ Pay Plan; or (E) terminate the employment of any executive officer (other than for cause) or hire any new executive officer (other than as a replacement hire receiving substantially similar terms of employment);
(xix) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization, in each case, other than in the Ordinary Course;
(xx) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security) or guarantee any such Indebtedness, except for (A) Indebtedness for borrowed money incurred in the Ordinary Course under L3’s or ▇▇▇▇▇▇’, as applicable, revolving credit facilities and other lines of credit existing as of the date of this Agreement, (B) Investment Preferred Stock (as defined in the Bridge Facility) guarantees by L3 or (C) by any wholly owned Subsidiaries to the Company Subsidiary of L3 of Indebtedness of L3 or to any other wholly owned Subsidiary of L3, (C) guarantees by ▇▇▇▇▇▇ or any wholly owned Subsidiary of ▇▇▇▇▇▇ of Indebtedness of ▇▇▇▇▇▇ or any other wholly owned Subsidiary of ▇▇▇▇▇▇, (D) Indebtedness incurred in connection with a refinancing or replacement of existing Indebtedness (but in all cases which refinancing or replacement shall not increase the Company; provided that, for the avoidance aggregate amount of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not Indebtedness permitted to be an issuanceoutstanding thereunder and in each case on customary commercial terms consistent in all material respects with the Indebtedness being refinanced or replaced), sale (E) Indebtedness incurred pursuant to letters of credit, performance bonds or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable forother similar arrangements in the Ordinary Course, or any (F) interest, exchange rate and commodity swaps, options, warrants futures, forward contracts and similar derivatives or other rights to acquire, any such shares hedging Contracts (1) not entered for speculative purposes and (2) entered into in the Ordinary Course and in compliance with its risk management and hedging policies or practices in effect on the date of this Section 5.01(b)(viii);
Agreement or (ixG) with respect to Indebtedness incurred by mutual agreement of the Retained Business, other than capital expenditures made Parties in accordance with Section 5.01(b)(v8.8; or (xxi) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend agree or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;foregoing.
(xb) Nothing contained in this Agreement shall give L3 or ▇▇▇▇▇▇, directly or indirectly, the right to control or direct the other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinParty’s operations prior to the Effective Time. Prior to the Effective Time, each Party will exerc
Appears in 1 contract
Sources: Agreement and Plan of Merger (L3 Technologies, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as otherwise expressly contemplated by this Agreement), and except as (1i) required by applicable LawLaw or (ii) is necessary and commercially reasonable in response to a Contagion Event or Contagion Event Measures , (2a) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) business of the Company Disclosure Letter)and its Subsidiaries shall be conducted in all material respects in the ordinary and usual course in accordance with its current business practices and operation, (b) each of the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business in the ordinary course of preserve its business consistent with past practice, organizations and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization assets intact and maintain the Retained Business’ its rights, franchises, powers and privileges and its existing relations and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
, and (bc) subject to Section 5.09, the Company and its Subsidiaries shall take no action that would reasonably be expected to adversely affect or materially delay the ability of the Company to obtain any necessary approvals of any Regulatory Authorities or other Governmental Authority required for the transactions contemplated hereby, to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly required by this Agreement or as required by Law, (B) as Parent shall otherwise may approve in writing, which writing in advance (such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 5.01 of the Company Disclosure Letter)Schedule, the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement Original Date and prior to the First Effective Time Acceptance Date (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and except as (1otherwise expressly contemplated by this Agreement or as set forth in Section 6.1 of the Company Disclosure Letter) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course consistent with past practice and to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of Original Date until the Acceptance Date, except (i) as otherwise contemplated by this Agreement and prior to the First Effective Time Agreement, (unless ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) is required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or any Governmental Entity or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(iA) 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, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate;
(C) acquire assets outside of the ordinary course of business from any other Person with respect a value or purchase price in the aggregate in excess of $15 million in any transaction or series of related transactions, other than acquisitions pursuant to SpinCo and Contracts in effect as of June 7, 2007;
(D) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the SpinCo issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than in (1) the case issuance of clause Shares upon the exercise of Company Options or (A)), (A2) amend its certificate the issuance of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except securities convertible or exchangeable into or exercisable for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(except for E) make any loans, advances or capital contributions to or investments in any Person (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $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 another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to the Company any other direct or (2indirect wholly owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(G) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, acquisition of any Shares tendered by current or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units former employees or Company Performance Stock Units, directors in each case in accordance with past practice and connection with the terms exercise of the Company Stock Plans as in effect on the date Options);
(H) incur any indebtedness for borrowed money or guarantee such indebtedness of this Agreement another Person (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other than a wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesbusiness;
(ivI) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) as set forth in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted capital budgets set forth in Section 5.01 6.1(a)(I) of the Company Disclosure Letter; provided, further, that make or authorize any capital expenditure in excess of $15 million in the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, aggregate;
(J) hedging make any material changes with respect to accounting policies or procedures, except as required by changes in compliance with the hedging strategy 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 as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount excess of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and amount;
(L) purchase money indebtedness and lease financing 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;
(vM) with respect transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, in each case which are material to the Retained BusinessCompany and its Subsidiaries taken as a whole, other than with respect to acquisitions inventory, supplies and other assets in the ordinary course of businesses, which is subject to Section 5.01(b)(ix), business and other than pursuant to Contracts in effect prior to the Original Date;
(N) except as expressly contemplated by this Agreement, required pursuant to Benefit Plans in effect prior to the Original Date and listed on the Company’s Disclosure Letter, or as otherwise required by applicable Law, (1) grant or provide any severance or termination payments or benefits to any current or former director, Elected Officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not Elected Officers, in the ordinary course of business consistent with respect past practice, (2) increase the compensation, perquisites or benefits payable to film and television production and programming any current or former director, Elected Officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not Elected Officers of the Company, increases in base salary in the ordinary course of business consistent with past practice, (including sports rights3) with third parties grant any equity or video game productionequity-based awards that may be settled in Shares, preferred shares or any other securities of the Company or any of its Subsidiaries or the value of which is subject linked directly or indirectly, in whole or in part, to Section 5.01(b)(x)the price or value of any Shares, make preferred shares or commit other Company securities or Subsidiary securities, (4) accelerate the vesting or payment of any compensation payable or benefits provided or to become payable or provided to any capital expenditures current or former director, Elected Officer or employee; provided that notwithstanding the foregoing, the Company shall be permitted, at any time prior to the Effective Time, to pay any annual or quarterly bonus earned and 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 existing, or adopt any new, Benefit Plan (other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) changes made in the ordinary course of business consistent with past practice or as may be necessary to comply with applicable Laws, in either case that do not materially increase the costs of any such Benefit Plans);
(O) enter into, amend or extend any material collective bargaining agreement or other labor agreement;
(P) enter into, amend or modify any agreement of the type described in Section 5.1(r); 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) Notwithstanding anything to the contrary in the aggregate not foregoing, the parties shall work together in excess of 120% good faith to agree upon actions intended to ameliorate, to the extent reasonably practicable, any adverse tax impact imposed under Section 409A of the amounts reflected 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 capital expenditure budget for three-year operating plan, as previously provided to Parent; and in each case shall consider in good faith the reasonable recommendations of 2017, 2018 and 2019 set forth Parent in Section 5.01(b)(v) of the Company Disclosure Letter;connection therewith.
(vid) The Company will use its reasonable best efforts to conclude its internal investigation regarding the Company’s practices with respect to the Retained Businessissuance of stock options and to complete, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance ofrequired, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary restatement of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year’s financial statements, in each case to acquire any businessas promptly as reasonably practicable after the Original Date, whether by mergerand shall keep Parent informed, consolidationon a current basis, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for 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 Laws or as would jeopardize attorney-client privilege (but in such acquisition); provided that neither event, the Company nor 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 Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinSubsidiaries.
Appears in 1 contract
Sources: Merger Agreement (Biomet Inc)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries thatotherwise (i) required by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1ii) required by applicable Law, (2iii) expressly required approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or as contemplated by the Final Step Planconditioned) or (3iv) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, from the date of this Agreement until the Effective Time, the Company shallwill, and shall will cause each of its Subsidiaries to, use its and their reasonable best efforts to conduct the Retained Business their businesses in the ordinary course of business consistent with past practicepractice and, and to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use its and their commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and to maintain the Retained Business’ existing relations significant business relationships (including customers and goodwill suppliers, but excluding Parent and its Affiliates) and relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of Authorities; provided that no action by the Company and or its Subsidiaries’ present employees and agentsSubsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Without limiting the generality ofExcept as otherwise (w) required by this Agreement, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1x) required by applicable Law, (2y) expressly required approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld, delayed or conditioned) or (3z) otherwise expressly disclosed in set forth on Section 5.01(b6.1(b) of the Company Disclosure Letter)Schedule, from the date of this Agreement until the Effective Time, the Company shall not will not, and shall not permit any of will cause its Subsidiaries not to:
(i) except (A) adopt, propose or submit to shareholder approval any change in the articles of incorporation or bylaws of the Company or (B) adopt or propose any change in the comparable organizational document of any Subsidiary of the Company;
(ii) (A) merge or consolidate the Company or any of its Subsidiaries with respect any other Person, or (B) restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, individually or in the aggregate, any changes or restrictions on the assets, operations or business of the Company or any of its Subsidiaries;
(iii) (A) acquire (including by merger, consolidation or acquisition of equity interests or assets or any other business combination) (x) any corporation, partnership or other business organization or (y) any assets outside of the ordinary course of business consistent with past practice from any other Person in any transaction or series of related transactions or (B) make any loans, advances or capital contributions to SpinCo and the SpinCo Subsidiaries (any Person, other than than, in the case of clause (A)) and (B), for consideration in excess of $1 million in the aggregate, and, in the case of clause (B), other than (1) to the Company or any of its wholly owned Subsidiaries, (2) extensions of credit terms to customers outside the United States in the ordinary course of business consistent with past practice and (3) loans or advances made by the Company or any of its Subsidiaries to employees in the ordinary course of business consistent with the terms set forth in Section 6.1(b)(iii) of the Company Disclosure Schedule;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Lien against, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of such transaction among the Company that would not prevent, delay and its wholly owned Subsidiaries or impair among the Initial Merger or the other Transactions)Company’s wholly owned Subsidiaries, (B) splitany issuance, combinesale, subdivide grant or reclassify its transfer of Shares pursuant to exercise or settlement of Company Equity Awards outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary as of the Company which remains a wholly owned Subsidiary date of this Agreement or granted after consummation the date of such transaction)this Agreement not in violation with this Agreement, in each case, in accordance with their terms or (C) the grant of Company Equity Awards required to be granted by any Company Benefit Plan as in effect on the date hereof;
(v) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or other distributions paid by a direct or indirect any wholly owned Subsidiary of the Company to another direct the Company or indirect to any other wholly owned Subsidiary of the Company Company);
(vi) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any such transaction by a wholly owned Subsidiary of the Company by and (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Equity Awards), or payment of the exercise price in respect of Company Options, in each case, outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement;
(vii) create, incur, assume, guarantee, endorse, suffer to exist or otherwise be liable with respect to any Indebtedness for borrowed money or guarantees of the same or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in Indebtedness incurred outside the ordinary course of business not consistent with past practice that does not materially increase the cost of such Company Plan practice, or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant issue or provide sell any transaction debt securities or retention bonuses to any director, officer, employee warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except for (A) borrowings in the ordinary course of business consistent under the Company’s credit facilities as in effect on the date hereof or under facilities that replace or refinance such existing credit facilities (provided that such facilities (x) can be repaid on the Closing Date in connection with past practice with respect the Closing without premium or penalty, (y) do not increase the aggregate amount of the commitments thereunder relative to (1) employees below the level of Executive Vice President facilities so replaced or refinanced, and (2z) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial favorable to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednessfacilities so replaced or refinanced), (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to guarantees by the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and obligations of its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into Subsidiaries incurred in the ordinary course of business consistent with past practice, and (EC) commercial paper issued Indebtedness for borrowed money incurred for expenditures permitted by any other provision of this Section 6.1(b) and associated schedules of the Company Disclosure Schedule;
(viii) other than in accordance with the Company’s capital expenditure budget set forth on Section 6.1(b)(viii) of the Company Disclosure Schedule or as required to comply with Section 6.1(b)(xvi), incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $500,000 in the aggregate;
(ix) other than in the ordinary course of business consistent or in connection with past practice in a principal amount not any matter to exceed $250,000,000 in the aggregate at extent such matter is permitted by any time outstandingother clause of this Section 6.1(b), (FA) Indebtednessenter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (B) amend, the proceeds modify in any material respect, assign or terminate any Material Contract (other than expirations of which will be used to finance all or any portion of the Dividend (and fees and expenses such Contract in connection therewithaccordance with its terms) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at otherwise waive, release or assign any time outstanding under this clause (F) shall not exceed $9,000,000,000; providedmaterial rights, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations claims or benefits of the Company or any of its Subsidiaries thereunder;
(x) make any material changes with respect to such Indebtedness financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (and Parent and including the Financial Accounting Standards Board or any similar organization);
(xi) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings for an amount in excess of $100,000 in the aggregate per annum (after taking into account insurance coverage maintained by the Company or its Subsidiaries) or which would reasonably be expected to (A) prevent, includingmaterially delay or materially impair the consummation of the Merger or any other transactions contemplated by this Agreement, following (B) result in the DistributionCompany or any of its Subsidiaries being subject to any criminal liability, the Retained Subsidiariesequitable relief or admission of wrongdoing;
(xii) (A) make, shall not have change or revoke any obligations material Tax election, (B) file any material amended Tax Return, (C) adopt or change any accounting method or accounting period for Taxes, (D) settle or compromise any material Tax liability or any material assessment, claim, dispute, audit, examination or other proceeding in respect thereof)of Taxes, (E) surrender any claim for a material refund of Taxes, (F) request or consent to a waiver of the statute of limitations or extension of time with respect to any material Tax or Tax Return, or (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and enter into any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior closing agreement relating to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceTaxes;
(vxiii) with respect sell, lease, license, encumber (including by the grant of any option thereon), lapse, abandon or otherwise dispose of any material assets or property or Intellectual Property Rights except (A) pursuant to the Retained Businessexisting contracts or commitments, (B) other than with respect to acquisitions of businessesIntellectual Property Rights, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in no event in an amount exceeding $100,000 individually or $500,000 in the aggregate not aggregate, (C) with respect to Intellectual Property Rights, the grant of non-exclusive licenses in excess the ordinary course of 120% business consistent with past practice or (D) dispositions of surplus, obsolete or worthless assets no longer useful to the operation of the amounts reflected Company or its Subsidiaries;
(xiv) except as required by Benefit Plans as in effect on the date hereof, (A) increase the compensation or benefits (including severance) payable or provided to the Company’s directors or employees, (B) enter into any employment, change of control, severance or retention agreement with, or grant any incentive award to, any employee of the Company, (C) establish, adopt, enter into, amend or terminate any Benefit Plan or any arrangement that would have been a Benefit Plan had it been entered into prior to this Agreement, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, (E) hire any employee or engage any independent contractor (who is a natural person), or (F) enter into or amend or terminate any collective bargaining, labor union, works council or similar agreement;
(xv) make any material changes to the operation of the Specific Business other than (A) changes effected by the construction of the planned new brewing facilities at Lot 16 in Kailua-Kona (the “Kona Brewery”) or (B) actions contemplated by the capital expenditure budget for each of 2017, 2018 and 2019 set forth in on Section 5.01(b)(v6.1(b)(viii) of the Company Disclosure LetterSchedule;
(vixvi) with respect fail to use commercially reasonable efforts to complete the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose construction of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) Kona Brewery on the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among schedule set by the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect made available to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect Parent prior to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the CompanyAgreement; provided thatprovided, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of that this Section 5.01(b)(viii)6.1(b)(xvi) shall not require the Company to make expenditures that would cause any overall cost of the Kona Brewery to exceed by a material amount the aggregate anticipated costs for the Kona Brewery;
(ixxvii) fail to comply with respect any obligations under the class action settlement agreement between ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ et al. and the Company, dated May 23, 2019, or fail to use reasonable best efforts to complete all actions required by such settlement agreement prior to the Retained BusinessClosing; or
(xviii) agree, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend authorize or commit to spend in excess do any of the foregoing.
(Ac) $25,000,000 if the transaction is Parent agrees that neither it, and shall cause its Affiliates not in the ordinary course and $50,000,000 in any event or to, acquire (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether including by merger, consolidation, purchase consolidation or acquisition of property equity interests or assets, licenses assets or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor other business combination) or make any of its Retained Subsidiaries shall investment in or enter into any joint venture with any corporation, partnership or other business organization engaged in the brewing and sale of alcohol malt beverages in the United States or any interest therein if such transaction that wouldacquisition, investment or joint venture requires a filing under the HSR Act and would be reasonably be expected to, to prevent, materially delay impair or materially impair the consummation delay satisfaction of the Transactions;condition described in Section 7.1(b).
(xd) other than capital expenditures made Nothing contained in accordance this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2a) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) business of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary course and usual course, (b) each of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, shall use its commercially reasonable efforts to preserve the Retained Business’ organization its business organizations and assets intact and maintain the Retained Business’ its rights, franchises, powers and privileges and its existing relations and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
, and (bc) subject to Section 5.10, the Company and its Subsidiaries shall take no action that would reasonably be expected to adversely affect or materially delay the ability of the Company to obtain any necessary approvals of any Regulatory Authorities or other Governmental Authority required for the transactions contemplated hereby, to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) expressly required by applicable this Agreement or as required by Law, (2B) expressly required by the Transaction Documents as Parent may approve in writing (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld or delayed) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 5.01 of the Company Disclosure Letter)Schedule, the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which advance in writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and except as (1) required by applicable Law, (2) otherwise expressly required by this Agreement or applicable Laws), the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) business of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary course of business consistent with past practicepractice and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to consistent therewith, the Retained Business, subject to compliance with the specific matters set forth below, Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees Employees, sales representatives and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees Employees and agents.
(b) . Without limiting the generality ofof the foregoing, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of hereof until the Effective Time, except (A) as otherwise expressly required by this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2B) expressly required by the Transaction Documents as Parent may approve in advance in writing (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers otherwise enter into any agreements or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongarrangements imposing material changes or restrictions on its assets, operations or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) except acquire assets outside of the ordinary course of business from any other Person, other than acquisitions pursuant to Contracts in effect as expressly required of the date hereof;
(iv) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee, or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares (A) by any a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary or (B) in respect of the exercise of Company Options outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plan as in effect as of the date of this Agreement), or securities convertible or exchangeable into, exercisable for or with a value measured by reference to 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 a Permitted Lien) not incurred in the ordinary course of business consistent with past practice;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person;
(vii) incur any Indebtedness, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for Indebtedness that will constitute Funded Debt as of the Closing;
(viii) except as set forth in the capital budgets in Section 6.1(a)(viii) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure;
(ix) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(x) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles;
(xi) settle any actions, suits, claims, hearings, arbitrations, investigations or other proceedings before a Governmental Entity for an amount in excess of $100,000 or any obligation or liability of the Company in excess of such amount;
(xii) amend, modify or terminate any Material Contract, or cancel, modify or waive any material debts or claims held by it or waive any material rights;
(xiii) (A) make, change, or rescind any Tax election (other than an election made on a Tax Return filed in the ordinary course of business consistent with past practice); (B) file any amended Tax Return; (C) adopt or change any method or period of Tax accounting; (D) settle or compromise any claim, audit, assessment or dispute relating to material Taxes; (E) surrender any material claim for a refund of Taxes; (F) enter into any closing agreement relating to Taxes; (G) file any Tax Return that is inconsistent with past practice; (H) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business); or (I) take any action which is reasonably likely to result in an increase in the Tax liability of the Company or any of its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of the Parent or the Surviving Corporation;
(xiv) transfer, assign, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except for Permitted Liens or in connection with services provided in the ordinary course of business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date hereof: (A) establish; provided, adoptthat with respect to Company Intellectual Property, amend or terminate any material Company Plan or amend the terms of any outstanding equityforegoing shall be limited to granting non-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan exclusive licenses in the ordinary course of business consistent with past practice with a fair market value under the foregoing threshold;
(xv) assign, grant any material right in, cancel, abandon or allow to lapse any Company Intellectual Property necessary or useful for the manufacture, use, sale, offer for sale or export of any Medical Device or that does not materially increase otherwise enables a third party to compete with the cost Company with respect to the manufacture or sale of any product that competes with any Medical Device, in each case other than non-exclusive licenses granted to customers (solely to permit such customers’ use of the Company’s and its Subsidiaries’ products and services), or to third-party service providers (solely for the purpose of facilitating their provision of services to or on behalf of the Company Plan or benefits provided under such Company Plan based on and its Subsidiaries), in each case, in the cost on ordinary course of business consistent with past practice;
(xvi) except as required pursuant to existing written, binding agreements in effect prior to the date hereof, as set forth in Section 5.1(j)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (BA) grant or provide any transaction severance or retention bonuses termination payments or benefits to any director, officer, employees or consultants of the Company or any of its Subsidiaries, (B) increase in any manner the compensation or consulting fees, bonus, pension, welfare, fringe, severance, termination pay or other benefits of, or pay any bonus to, any current or former director, officer, employee or other service provider consultant (who is a natural person) of the Company or any of its Subsidiaries, (C) increase grant any new awards, or amend or modify the compensation, bonus or pension, welfare or other benefits terms of any directoroutstanding awards, officer or employee of the Company or under any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeBenefit Plan, (D) increase the severance become a party to, establish, adopt, commence participation in, amend or terminate any Benefit Plan or any arrangement that would have been a Benefit Plan had it been entered into prior to this Agreement, other than termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries401(k) Plan pursuant to Section 6.9(b), (E) take any action to accelerate the vesting, lapsing of restrictions or payment in respect of any award or benefit provided pursuant to any Benefit Plan, other than acceleration of vesting of Company Options and Company Restricted Shares pursuant to Section 4.3, (F) fund or in any other way secure the payment of compensation or benefits under any Company Plan (including any equity-based awards)Benefit Plan, (FG) hire any employee or engage any consultant (who is a natural person) with base compensation in excess of $75,000 annually, (H) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (GI) forgive any loans or issue any loans to any current or former directors, officers officers, employees or employees consultants (who are natural persons) of the Company or any of its Subsidiaries, or (J) terminate the employment of any employee other than for cause;
(ivxvii) incur become a party to, establish, adopt, amend or commence participation in any Indebtedness or issue any warrants collective bargaining agreement or other rights agreement with a labor union, works council or similar organization;
(xviii) take any action or omit to acquire take any Indebtedness, except action that would reasonably be expected to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xix) engage in (A) any trade loading practices or any other promotional sales or discount activity or other practice with the effect of accelerating to pre-Closing periods sales to the trade or otherwise that would otherwise be expected (in the ordinary course of business) to occur in post-Closing periods, (B) any practice which would have the effect of accelerating collections to pre-Closing periods of receivables that would otherwise be expected (in the ordinary course of business) to occur in post-Closing periods, (C) any practice which would have the effect of postponing to post-Closing payments by the Company that would otherwise be expected (in the ordinary course of business) to be made in pre-Closing periods, or (D) any promotional sales, discount activity, deferred revenue activity or inventory overstocking or understocking activity, in each case in this clause (D) in a manner outside the ordinary course of business or contrary to generally accepted industry practices;
(xx) sell, transfer or otherwise move any Inventory from the Company other than in the ordinary course of business consistent with past practice in a principal amount not or hold, or take any action to exceed $400,000,000 in the aggregate facilitate or permit its distributors to hold, more than ninety (90) days of Inventory at any time outstanding on prevailing market terms at or on terms substantially consistent with or more beneficial prior to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceClosing;
(vxxi) with respect to the Retained Businessform one or more additional Subsidiaries; or
(xxii) agree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 1 contract
Sources: Merger Agreement (CONMED Corp)
Interim Operations. (a) The Each of Parent and the Company covenants and agrees as to itself and its Subsidiaries that, from on and after the execution date of this Agreement and prior to the First Effective Time Closing (unless Parent Purchaser shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) otherwise expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by this Agreement), other than any action expressly set forth in the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) Restructuring Agreements, the businesses of the Company Disclosure Letter), the Company shall, and Group shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business be conducted in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use commercially their respective reasonable efforts to maintain the value of its business as a going concern, preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensorsvendors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Closing, except (unless Parent shall A) as otherwise expressly required by this Agreement, (B) actions expressly set forth in the Restructuring Agreements, (C) as the Purchasers may approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3D) otherwise expressly disclosed in as set forth on Section 5.01(b) 3.2 of the Company Disclosure Letter), each of Parent and the Company shall not and shall not permit any member of its Subsidiaries tothe Parent Group to directly or indirectly:
(i1) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws or other applicable governing instruments;
(2) merge or comparable governing documentsconsolidate any member of the Company Group with any other person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(3) acquire assets outside of the ordinary course of business from any other person with a value or purchase price in the aggregate in excess of $10,000,000 in any transaction or series of related transactions;
(4) 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 (i) any member of the Parent Group (other than amendments to (x) the governing documents issuance of any shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a another wholly owned subsidiary Subsidiary of the Company and (y) in the case of Parent, the issuance and sale of common stock of Parent with an aggregate value of $40 million or less after the final record date for the meeting to consider the Special Resolution and for which remains a Parent uses its reasonable best efforts to limit to existing stockholders of Parent), or (ii) 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;
(5) create or incur any Lien material to the Company or any of its Subsidiaries not incurred in the ordinary course of business consistent with past practice;
(6) make any loans, advances, guarantees or capital contributions to or investments in any person (other than, with respect to the Company, between or among the Company and any of its direct or indirect wholly owned Subsidiary after consummation Subsidiaries or, with respect to Parent, between or among Parent and any of such transaction), its direct or indirect wholly owned Subsidiaries other than the Company Group) in excess of $5,000,000 in the aggregate;
(C7) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except except, with respect to the Company, for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another the Company or to any other direct or indirect wholly owned Subsidiary or, with respect to Parent, for dividends paid by any direct or indirect wholly owned Subsidiary of Parent (other than the Company Group) to Parent or to the Company any other direct or (2indirect wholly owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(8) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock, except, with respect to the Company, for transactions that are solely among the Company Group or, with respect to Parent, for transactions that are solely among Parent and its Subsidiaries other than the Company Group;
(9) incur any indebtedness for borrowed money or guarantee or assume such indebtedness of another person (other than (1) pursuant the incurrence of indebtedness or guarantee of such indebtedness, with respect to the forfeiture ofCompany, between or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of among the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any and a wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge between or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any among wholly owned Subsidiaries of the Company that would not preventCompany, materially delay or, with respect to Parent, between or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms among Parent and a wholly owned Subsidiary of any outstanding equity-based awards Parent other than the Company Group, or between or among wholly owned Subsidiaries of Parent other than the Company Group), or issue or sell any such action taken debt securities or warrants or other rights to acquire any debt security of the Company Group, except for purposes of replacing, renewing or extending a broadly applicable material Company Plan indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except practices (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 5,000,000 in the aggregate at any time outstanding on prevailing market terms aggregate, or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) guarantees incurred in compliance with this Section 3.2 by the Company of indebtedness of wholly owned Subsidiaries of the Company;
(10) amend, modify or terminate any agreement relating to indebtedness for borrowed money, other than indebtedness permitted under this Section 3.2, except for transactions, with respect to the Bridge FacilityCompany, that are solely among the Company Group or, with respect to Parent, that are solely among the Parent Group other than the Company Group;
(11) make any material changes with respect to accounting policies or procedures, except as required by changes in replacement ofapplicable generally accepted accounting principles;
(12) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $2,000,000 in the aggregate or any obligation or liability of the Company Group in excess of such amount in the aggregate;
(13) materially amend, modify or terminate any contract, or to refinancecancel, existing Indebtedness on then prevailing market terms modify or on terms substantially consistent with waive any debts or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced claims held by it or refinanced, and waive any rights having in each case with a maturity date no more than 10 years after the date value of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters change in excess of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice5,000,000;
(v14) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Businesssell, transfer, lease, license, sellpledge, mortgage, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon abandon or allow to lapse or expire or otherwise dispose of of, or encumber any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game productionrights, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, assets or properties, real, personal or mixed, in each caseexcess of $1,000,000 individually or $3,000,000 in the aggregate, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) except sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not inventory in the ordinary course of business and dispositions of obsolete or $75,000,000 individually unnecessary assets;
(15) take any action or omit to take any action that is reasonably likely to result in any event of the conditions to Closing not being satisfied;
(16) make or change any Tax election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such action would have the effect of increasing the overall Tax liability of any member of the Company Group;
(17) take any action that could cause the acceleration of contingent payments (including earnouts or milestone payments, other than transactions among earnouts or milestone payments resulting solely from superior performance) under any license agreement, merger, acquisition or other similar agreements, make any discretionary change of control payments or enter into any agreement to transfer, settle or extinguish, or any transaction that would have the effect of transferring, settling or extinguishing, any indebtedness owed by Angiotech Investment Partnership (or any successor thereof) to Parent or any of its Subsidiaries; or
(18) agree, authorize or commit to do any of the foregoing or voluntarily take any action that would make any of the representations and warranties contained in this Agreement untrue or incorrect at Closing.
(b) Notwithstanding the foregoing, the Company and its wholly owned Retained SubsidiariesSubsidiaries may take any of the actions identified in subsections (4), (D6), (7), (8), (10), or (14) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in above (the SpinCo Business and (E“Noticed Items”) Affiliation Agreements;
(vii) with respect to the Retained Businessextent that the prohibition thereof contravenes Section 4.08 of the indentures governing the Parent Notes by constituting a consensual encumbrance or restriction on dividends or distributions, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon loans or otherwise dispose of any properties advances or assets transfers (including capital stock sales or leases) of any of its Retained Subsidiaries but not including any Intellectual Propertyassets; provided, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among that the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries provides written notice to the Company or Purchasers at least 5 business days notice prior to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any taking such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinaction.
Appears in 1 contract
Sources: Note Purchase Agreement (Angiotech Pharmaceuticals Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after After the execution of this Agreement date hereof and prior to the First Effective Time Closing (unless Parent Buyer shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and except as (1) otherwise expressly contemplated by this Agreement, and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure LetterLaws), the Company shall, and shall the Shareholders covenant and agree to cause each of the Company and its Subsidiaries to, conduct the business of the Company and its Subsidiaries in the ordinary and usual course and, to the extent consistent therewith, the Company shall and the Shareholders shall cause the Company and the Company’s Subsidiaries to (x) use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained BusinessCompany’s and its Subsidiaries’ organization business organizations intact and maintain the Retained Business’ existing relations and goodwill with all Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business associates, (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersy) and keep available the services of the Company Company’s and its Subsidiaries’ present employees and agents.
agents and (bz) Without limiting make capital expenditures substantially in compliance with the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as Company’s 2007 budget provided to itself and its Subsidiaries that, from and after Buyer prior to the date of this Agreement and prior to set forth on Schedule 6.1. Without limiting the First Effective Time generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Closing, except (unless Parent shall A) as otherwise expressly contemplated by this Agreement, (B) as Buyer may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter)for transactions set forth on Schedule 6.1, the Company shall will not and the Shareholders shall not permit any cause the Company and each of its Subsidiaries not to:
(ia) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(iib) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) acquire any entity or business (including by way of merger, stock purchase, asset purchase or otherwise) from any other Person, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and disclosed on the Schedules;
(d) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any Company Stock or any shares of capital stock of the Company or any of its Subsidiaries (other than transactions the issuance of the type contemplated shares by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a wholly-owned Subsidiary of the Company in which such Subsidiary is to the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongCompany or another wholly-owned Subsidiary), or the restructuringsecurities convertible or exchangeable into or exercisable for any shares of such capital stock, reorganization or liquidation ofany options, warrants or other rights of any wholly owned Subsidiaries kind to acquire any Company Stock or any shares of such capital stock or such convertible or exchangeable securities;
(e) create or incur any Encumbrance in excess of $5 million on any assets of the Company that would not prevent, materially delay or materially impair the Transactions)any of its Subsidiaries;
(iiif) except as expressly required by make any Company Plan as loans, advances or capital contributions to or investments in effect on the date hereof: (A) establishany Person, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable non-material Company Plan advances to vendors and employees in the ordinary course of business consistent with past practice that does not materially increase practice;
(g) enter into any agreement with respect to the cost voting of such Company Plan its capital stock or benefits provided under such Company Plan based on the cost on the date hereofdeclare, (B) grant set aside, make or provide pay any transaction non-cash dividend or retention bonuses other distribution, or purchase, redeem or otherwise acquire any of its capital stock payable other than in cash, with respect to any directorof its capital stock;
(h) reclassify, officersplit or combine, employee directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(i) incur any Debt (other than borrowings under the Company’s existing debt facilities in the ordinary course of business consistent with past practice) or guarantee Debt of another Person, or issue or sell any debt securities or warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries;
(j) enter into any Contract that would have been a Material Contract had it been entered into prior to the entering into of this Agreement;
(k) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(l) other than in the ordinary course of business consistent with past practice, amend, modify or terminate any Material Contract, or cancel, modify or waive any Debts or claims held by it or waive any rights;
(m) except as set forth on Schedule 6.1(m), make any material Tax election, take any material position on any Tax Return filed on or after the date of this Agreement or adopt any tax accounting method that is inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, or settle or resolve any material Tax controversy;
(n) other than pursuant to Contracts in effect prior to the date of this Agreement and disclosed on the Schedules, 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, leases, licenses or other dispositions of assets with a fair market value not in excess of $100,000 in the aggregate;
(o) except as set forth on Schedule 6.1(o) or otherwise required by applicable Law, (Ci) increase the compensation, bonus or pensionpension or welfare benefits of, welfare or other benefits of make any new equity — based awards to, any director, officer or employee of the Company or any of its Subsidiaries, except Subsidiaries (other than those increases in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changelevel), (Dii) increase establish, adopt, amend or terminate any Benefit Plan or amend the severance terms of any Benefit Plan or termination payments outstanding equity-based awards or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Eiii) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan Benefit Plan, to the extent not already required by any such Benefit Plan;
(including any equity-based awards)p) settle, (F) change any actuarial or other assumptions used to calculate funding obligations with respect consent to any settlement of, any actions, suits, claims or proceedings against the Company Plan or to change the manner in which contributions to such plans are made any of its Subsidiaries or the basis on which such contributions are determined any obligation or (G) forgive any loans to directors, officers or employees liability of the Company or any of its Subsidiaries;
Subsidiaries alleging any injury or damage (iv) incur any Indebtedness other than disputes with customers or issue any warrants or other rights to acquire any Indebtedness, except (A) suppliers in the ordinary course of business consistent with past practice in a principal amount and not exceeding $50,000 per claimant);
(q) take any action or omit to exceed $400,000,000 in the aggregate at take any time outstanding on prevailing market terms action that will waive, modify, compromise or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date extinguish any of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company Company’s or any of its Subsidiaries Subsidiaries’ rights with respect to such Indebtedness (and Parent and its Subsidiariesany agreements, including, following the Distribution, the Retained Subsidiaries, shall not have understandings or arrangements relating to any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceinsurance coverage;
(vr) with respect take any action or omit to take any action that is reasonably likely to result in any of the Retained Business, conditions to Closing set forth in Article VII not being satisfied (other than the taking of any action required to be taken under applicable Law or the omission of any action prohibited under applicable Law);
(s) enter into, terminate, amend or modify any Contract or transaction with respect to acquisitions of businessesany Affiliate, which is subject to Section 5.01(b)(ix), and Shareholder or other Related Party;
(t) enter into any purchase order (other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) purchase orders entered into in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value an amount less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries10 million), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;; or
(viiu) with respect to the Retained Businessagree, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 1 contract
Sources: Stock Purchase Agreement (McJunkin Red Man Holding Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and except as (1otherwise expressly contemplated by this Agreement or as set forth in Section 6.1 of the Company Disclosure Letter) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course consistent with past practice and to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless i) as otherwise contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) is required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or any Governmental Entity or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(iA) 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, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate;
(C) acquire assets outside of the ordinary course of business from any other Person with respect a value or purchase price in the aggregate in excess of $15 million in any transaction or series of related transactions, other than acquisitions pursuant to SpinCo and Contracts in effect as of the SpinCo date of this Agreement;
(D) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than in (1) the case issuance of clause Shares upon the exercise of Company Options or (A)), (A2) amend its certificate the issuance of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(except for E) make any such transaction by a wholly owned subsidiary of loans, advances or capital contributions to or investments in any Person (other than the Company which remains a or any direct or indirect wholly owned Subsidiary after consummation of such transaction), the Company) in excess of $15 million in the aggregate;
(CF) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any 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 (ii) dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of to the Company or to another any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(G) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, acquisition of any Shares tendered by current or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units former employees or Company Performance Stock Units, directors in each case in accordance with past practice and connection with the terms exercise of the Company Stock Plans as in effect on the date Options);
(H) incur any indebtedness for borrowed money or guarantee such indebtedness of this Agreement another Person (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other than a wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesbusiness;
(ivI) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) as set forth in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted capital budgets set forth in Section 5.01 6.1(a)(I) of the Company Disclosure Letter; provided, further, that make or authorize any capital expenditure in excess of $15 million in the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, aggregate;
(J) hedging make any material changes with respect to accounting policies or procedures, except as required by changes in compliance with the hedging strategy 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 as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount excess of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and amount;
(L) purchase money indebtedness and lease financing 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;
(vM) with respect transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, in each case which are material to the Retained BusinessCompany and its Subsidiaries taken as a whole, other than with respect to acquisitions inventory, supplies and other assets in the ordinary course of businesses, which is subject to Section 5.01(b)(ix), business and other than pursuant to Contracts in effect prior to the date of this Agreement;
(N) except as expressly contemplated by this Agreement, required pursuant to Benefit Plans in effect prior to the date of this Agreement and listed on the Company’s Disclosure Letter, or as otherwise required by applicable Law, (1) grant or provide any severance or termination payments or benefits to any current or former director, Elected Officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not Elected Officers, in the ordinary course of business consistent with respect past practice, (2) increase the compensation, perquisites or benefits payable to film and television production and programming any current or former director, Elected Officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not Elected Officers of the Company, increases in base salary in the ordinary course of business consistent with past practice, (including sports rights3) with third parties grant any equity or video game productionequity-based awards that may be settled in Shares, preferred shares or any other securities of the Company or any of its Subsidiaries or the value of which is subject linked directly or indirectly, in whole or in part, to Section 5.01(b)(x)the price or value of any Shares, make preferred shares or commit other Company securities or Subsidiary securities, (4) accelerate the vesting or payment of any compensation payable or benefits provided or to become payable or provided to any capital expenditures current or former director, Elected Officer or employee; provided that notwithstanding the foregoing, the Company shall be permitted, at any time prior to the Effective Time, to pay any annual or quarterly bonus earned and 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 existing, or adopt any new, Benefit Plan (other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) changes made in the ordinary course of business consistent with past practice or as may be necessary to comply with applicable Laws, in either case that do not materially increase the costs of any such Benefit Plans);
(O) enter into, amend or extend any material collective bargaining agreement or other labor agreement;
(P) except to the extent necessary to take any actions that the Company is otherwise permitted to take pursuant to Section 6.2 (and in such case only in accordance with the aggregate not in excess terms of 120% Section 6.2), take any action to render inapplicable, or to exempt any third party from, any standstill arrangements or the provisions of any Takeover Statutes;
(Q) enter into, amend or modify any agreement of the amounts reflected type described in Section 5.1(r); or
(R) except as provided in Section 6.2 and Section 8.3(a), 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 capital expenditure budget for three-year operating plan, as previously provided to Parent; and in each case shall consider in good faith the reasonable recommendations of 2017, 2018 and 2019 set forth Parent in Section 5.01(b)(v) of the Company Disclosure Letter;connection therewith.
(vid) The Company will use its reasonable best efforts to conclude its internal investigation regarding the Company’s practices with respect to the Retained Businessissuance of stock options and to complete, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance ofrequired, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary restatement of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year’s financial statements, in each case to acquire any businessas promptly as reasonably practicable after the date hereof, whether by mergerand shall keep Parent informed, consolidationon a current basis, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for 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 acquisition); provided that neither event, the Company nor 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 Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinSubsidiaries.
Appears in 1 contract
Sources: Merger Agreement (Biomet Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing in advance (which approval shall not be unreasonably withheld, conditioned delayed or delayedconditioned)), and except as (1) otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation its business and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each business of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practiceOrdinary Course and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related consistent therewith, it and its Subsidiaries shall (i) preserve their business organizations in good standing pursuant to the Retained Business, subject to compliance with the specific matters set forth below, applicable Law and (ii) use their respective commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ respective present officers, employees and agents, except as otherwise expressly required by this Agreement or as required by a Governmental Entity or applicable Law, provided that no action by the Company with respect to matters permitted by any provision of clauses (i)-(xxii) of Section 7.1(b) below shall be deemed a breach of the obligations under this sentence unless such action would constitute a breach of such other provision.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise expressly (unless Parent shall otherwise approve A) contemplated by this Agreement, (B) required by a Governmental Entity or applicable Law, (C) approved in writing, writing in advance (which approval shall not be unreasonably withheld, conditioned delayed or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1conditioned) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Parent or (3D) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except adopt or propose any change in (x) the Company’s Organizational Documents or (y) any Subsidiary’s Organizational Documents;
(ii) merge or consolidate itself or any of its Subsidiaries with respect to SpinCo and the SpinCo Subsidiaries (any other than in the case of clause (A))Person, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a transactions among its wholly owned subsidiary Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) (A) acquire (1) (by merger, consolidation or acquisition of stock or assets) any other Person or (2) to the Company which remains a wholly owned Subsidiary after consummation extent in excess of such transaction$5,000,000 in the aggregate, any material equity in any other Person therein or (B) enter into any joint venture, legal partnership or similar arrangement (other than commercial agreements with partners in the Ordinary Course that do not involve the formation of an entity with any third Person or require equity investing);
(iv) except as otherwise permitted under clause (xvii) below and except for issuances under the ESPP authorized under Section 3.5(c), (C) declareissue, set aside sell, pledge, dispose of, grant, transfer, encumber, or pay authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into or amend any dividend Contract or distribution payable in cashunderstanding with respect to the voting of, stock or property (or any combination thereof) in respect of any shares of its capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or Company Equity Awards or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities (other than the issuance of shares (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries, (B) in respect of Company Warrants and Company Equity Awards, in each case outstanding as of the date hereof and issued in accordance with their terms in effect as of the date hereof and, as applicable, the Stock Plan or (C) under the ESPP);
(v) create or incur any Encumbrance (other than a Permitted Encumbrance or as otherwise permitted by Section 7.1(b)(x));
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its wholly owned Subsidiaries) in excess of $250,000 in the aggregate;
(vii) make any loans or advances to, guarantees for the benefit of, or enter into any other material transaction with any Company Employee or Affiliates other than advances for business, travel-related, relocation or other similar expenses in accordance with currently existing Company policy;
(viii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity or voting interest (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(ix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, or (E) purchaseoffer to redeem, repurchase, redeem repurchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock, other than the withholding of shares of Company Common Stock to satisfy the exercise price or withholding Tax obligations upon the exercise, vesting or settlement of outstanding Company Equity Awards in accordance with their terms and, as applicable, the Stock Plan;
(x) unless otherwise permitted by Section 7.1(b)(xvii), incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) trade payables incurred in the Ordinary Course and intercompany loans or advances between or among the Company and/or its direct or indirect wholly-owned Subsidiaries, (B) other Indebtedness not to exceed $750,000 in the aggregate or (C) guarantees of Indebtedness of wholly owned Subsidiaries otherwise incurred in compliance with this Section 7.1;
(xi) except as set forth in the Company’s capital budget, make or authorize any capital expenditures in excess of $1,000,000 in the aggregate during any fiscal quarter (it being understood that any portion of the capital expenditures budget for any fiscal quarter and such $1,000,000 in excess thereof not expended in such fiscal quarter, beginning with the first quarter of the fiscal year ended March 31, 2021, may be carried forward and, together with any amount otherwise permissible pursuant to this paragraph (xi), expended in any future fiscal quarter; provided that any excess amount not expended in the final quarter of a fiscal year will not be carried forward into the next fiscal year);
(xii) other than in the Ordinary Course, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or amend, modify supplement, waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract, other than (1A) pursuant to expirations of any such Contract in the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Personsuch Contract, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses non-exclusive licenses, covenants not to any director▇▇▇, officerreleases, employee waivers or other service provider of rights under Intellectual Property Rights owned by the Company or any of its Subsidiaries, in each case, granted in the Ordinary Course;
(xiii) settle, release, waive or compromise any Proceedings except solely for monetary payments of no more than $750,000 individually or $1,500,000 in the aggregate, net of applicable insurance payments, recoveries or proceeds, or on a basis that would (A) prevent or materially delay consummation of the Merger or the Transactions, or (B) result in the imposition of any term or condition that would materially restrict the future activity or conduct of the Company or its Subsidiaries or a finding or admission of a criminal violation of Law;
(xiv) make any changes (other than di minimis changes) with respect to accounting policies or procedures, except as required by GAAP or applicable Law;
(xv) (A) make, change or revoke any income or other material Tax election, (B) adopt or change any Tax accounting method, (C) increase the compensationfile any amended Tax Return, bonus (D) enter into any closing agreement with respect to any Taxes, (E) settle any material Tax claim, audit, assessment or pensiondispute, welfare (F) surrender any right to claim a refund of a material amount of Taxes, (G) consent to any extension or other benefits waiver of any directorlimitation period with respect to any material Tax claim or assessment, officer (H) enter into any Tax sharing or employee similar agreement or arrangement, (I) fail to pay any material Tax that becomes due and payable or (J) incur any Taxes outside of the Company Ordinary Course;
(xvi) transfer, sell, lease, license, divest, cancel, mortgage, pledge, surrender, encumber, abandon or allow to lapse or expire or otherwise dispose of any assets (tangible or intangible), rights, properties, product lines or businesses, in whole or in part, material to it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except for (A) sales of obsolete assets in the ordinary course Ordinary Course, (B) sales, leases or other dispositions of business consistent assets (not including services) with past practice with respect a Fair Value not in excess of $5,000,000 in the aggregate other than pursuant to (1) employees below Material Contracts in effect prior to the level date of Executive Vice President this Agreement and (2C) employees at or above non-exclusive licenses entered into in the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, Ordinary Course and (D) increase Encumbrances securing Indebtedness permitted under this Section 7.1(b) and (E) Permitted Encumbrances;
(xvii) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any Company Employee or other service provider, (B) increase the compensation or benefits payable to any director, officer, employee Company Employee or other service provider of provider, except for annual merit-based increases in base salary or base wages in the Ordinary Course for Company Employees or any of its Subsidiariesother service providers who are not directors or Executive Officers and whose annual base compensation is less than $250,000 (with no such increase to exceed three (3) percent (3%)), (EC) establish, adopt, enter into, amend or terminate any material Company Benefit Plan or other material benefit or compensation plan, program, policy, agreement or arrangement that would be a Company Benefit Plan if in effect on the date hereof, (D) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan other than vesting acceleration of all Company Options and Company RSUs in the Merger as contemplated by Section 3.5(b), (including E) grant any equity-based new awards, or amend or modify the terms of any outstanding awards (including, without limitation, any Company Equity Awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (G) forgive any loans, issue any loans or advance any loans to directorsany current or former Company Employees, officers (H) hire or engage any employee or engage any independent contractor (who is a natural person) with an annual base salary or wage rate or consulting fees in excess of $275,000 or (I) terminate the employment or engagement of any Company Employee or other service provider whose annual base compensation exceeds $275,000 other than for cause;
(xviii) recognize any union, works council or other labor organization as the representative of any of the employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a wholeor enter into, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement ofmodify, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the terminate any Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereofLabor Agreement, in each case, so long except as required by applicable Law;
(xix) implement or announce any employee layoffs or location closings, that would implicate the aggregate principal amount thereof does not exceed $2,500,000,000WARN Act;
(xx) enter into any Contract which contains a change in control or similar provision that would be triggered in connection with this Agreement or the Merger;
(xxi) other than in the Ordinary Course, amend or modify in any material respect, or extent, renew or terminate any lease, sublease, license or other agreement for the use or occupancy of any real property, or enter into any new lease, sublease, license or other agreement for the use or occupancy of any real property;
(Jxxii) hedging maintain insurance at less than current levels or otherwise in compliance a manner inconsistent with the hedging strategy past practice in any material respects;
(xxiii) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company as or other Person covered by Item 404 of Regulation S-K promulgated by the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposesSEC that would be required to be disclosed pursuant to Item 404; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;or
(vxxiv) with respect to the Retained Businessagree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 1 contract
Sources: Merger Agreement (Majesco)
Interim Operations. (a) The Company covenants During the period commencing on the date hereof and agrees as to itself running until the earlier of the Closing Date and its Subsidiaries that, from and after the execution termination of this Agreement and prior to in accordance with Article VIII (the First Effective Time “Pre-Closing Period”), except (unless Parent shall otherwise approve in writingi) as expressly contemplated, which approval shall not be unreasonably withheldrequired or permitted by this Agreement (including, conditioned or delayedfor the avoidance of doubt, and except the Vested Units Exchanges), (ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), (iv) for any action taken or omitted to be taken, in order to comply with any COVID-19 Measures or which is otherwise taken or omitted to be taken reasonably and in good faith in response to COVID-19 (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (iv), to the Transaction Documents (including extent permitted under applicable Law and practicable under the circumstances, the Company shall provide prior notice to and consult in connection good faith with the Separation and the Distribution or as contemplated by the Final Step Plan) Parent prior to taking such action), or (3v) otherwise expressly disclosed in as set forth on Section 5.01(a) 6.1 of the Company Disclosure Letter)Schedule, the Company shallwill, and shall will cause each of its Subsidiaries to, use its and their commercially reasonable best efforts to (A) conduct the Retained Business their businesses in the ordinary course of business consistent with past practicepractice and (B) preserve intact in all material respects their respective assets, properties, business organizations and the Company shallrelationships with partners, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customersclients, suppliers, distributors, licensors, creditors, lessors, employees distributors and business associates and others having other Persons with which it has material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of dealings; provided that no action by the Company and or its Subsidiaries’ present employees and agentsSubsidiaries with respect to matters specifically permitted by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would otherwise constitute a breach of such provision of Section 6.1(b).
(b) Without limiting During the generality ofPre-Closing Period, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) as expressly contemplated, required or permitted by this Agreement, (2) as required by applicable Law, (23) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld, delayed or conditioned) or (34) otherwise expressly disclosed in as set forth on Section 5.01(b) 6.1 of the Company Disclosure Letter)Schedule, the Company shall not will not, and shall not permit any of will cause its Subsidiaries not to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than x) adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws of the Company or (y) adopt any change in the comparable organizational document of any of the Company’s Subsidiaries (including any amendment to the Focus LLC Agreement);
(ii) merge or comparable governing documents) (consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize, recapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreement or arrangement imposing restrictions on the assets, operations or business of the Company or any of its Subsidiaries, other than amendments to the governing documents restructuring, reorganization, recapitalization, liquidation or dissolution of any wholly owned Subsidiary of the Company that would are immaterial to the Company and its Subsidiaries, taken as a whole, and to the extent such actions are not preventexpected to be adverse to Parent (provided that this Section 6.1(b)(ii) shall not prevent the structuring of a transaction specifically permitted by Section 6.1(b)(xiii) in the form of a merger or consolidation (provided, delay further, that (x) the use of such structure is consistent with past practice and (y) neither the Company nor Focus LLC is merging or impair consolidating with any other Person);
(iii) issue, sell, pledge, encumber, dispose of or grant, or authorize the Initial Merger issuance, sale, pledge, encumbrance, disposition or grant of, any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other Transactions)rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, or (B) any grant or issuance of shares of Company Stock (1) in exchange for Focus LLC Units in accordance with the terms of the Focus LLC Agreement, (2) in respect of any exercise of Company Options or (3) in settlement of any Company RSUs;
(iv) make any loans, advances or capital contributions to or investments in any Person (other than to the Company or any of its wholly-owned Subsidiaries);
(v) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock, except for (A) dividends or other distributions paid by any wholly-owned Subsidiary of the Company to the Company or to any other wholly-owned Subsidiary of the Company and (B) distributions in accordance with Section 5.2 of the Focus LLC Agreement in amounts reasonably determined by Focus LLC to be no greater than necessary to satisfy its obligations under Section 5.2 of the Focus LLC Agreement to all of the members of Focus LLC consistent with past practice, including, to the extent consistent with past practice, making quarterly tax distributions and utilizing the numerically stated tax rate set forth in the definition of “Assumed Tax Rate” in the Focus LLC Agreement;
(vi) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock except for (other than A) any such transaction solely among any of the Company’s wholly-owned Subsidiaries, (1B) pursuant to the forfeiture ofacquisitions of shares of Company Stock or Focus LLC Units in satisfaction of withholding obligations in respect of Company Equity Awards, or withholding (C) acquisitions of Taxes Focus LLC Units in connection with respect to, Company Restricted Stock Units, Company Deferred Stock an exchange of such Focus LLC Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms for shares of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement cash in accordance with the terms of this the Focus LLC Agreement;
(vii) create, incur, assume or (2) purchases, repurchases, redemptions guarantee any Indebtedness for borrowed money or other acquisitions of issue any debt securities of any wholly owned Subsidiary or guarantees of the Company same or any other Indebtedness, except for (A) borrowings in the ordinary course of business under the Company’s Existing Credit Document (other than Indebtedness incurred in reliance on the Maximum Incremental Facilities Amount; (B) guarantees or credit support provided by the Company or any other wholly owned Subsidiary of its Subsidiaries of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary obligations of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned of its Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase to the cost of extent such Company Plan or benefits provided under such Company Plan based on the cost Indebtedness is in existence on the date hereof, of this Agreement or incurred in compliance with clause (BA) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, this Section 6.1(b)(vii) and (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness solely among the Company and its wholly wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, ;
(DA) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into other than in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement; provided, that no Contract of the type described in Section 5.1(k)(i)(B) shall be entered into without the prior written consent of Parent, (EB) commercial paper issued amend, modify or waive in any material respect in a manner adverse to the Company or any of its Subsidiaries or terminate any Material Contract (other than expirations of any such Contract in accordance with its terms), (C) amend, modify or waive in any material respect or terminate any management agreement; provided that this clause (C) shall not restrict any amendment, modification or waiver reasonably necessary to (x) add or remove principals as parties to such management agreement in the ordinary course of business or (y) adjust for economics consistent with acquired earnings and past practice in connection with acquisitions completed following the date hereof in accordance with the terms hereof, or (D) amend, modify or waive in any material respect any Contract containing a principal minimum purchase, “earnout” or other contingent or deferred payment obligation of the Company and its Subsidiaries;
(ix) make any material changes with respect to financial accounting policies or procedures, except as required by Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(x) settle any Action for an amount not to exceed in excess of $250,000,000 500,000 individually or $1 million in the aggregate at other than (A) any time outstandingsettlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered (less retention or deductible under the applicable insurance policy) by insurance coverage amounts maintained by the Company or any of its Subsidiaries, (FB) Indebtednesssettlements or compromises of any Action for an amount not materially in excess of the amount, if any, reflected or specifically reserved in the balance sheet (or the notes thereto) of the Company included in the Company Reports (with materiality measured relative to the amount so reflected or reserved, if any) filed prior to the date hereof, and (C) settlements or compromises of any Action where the Company or any of its Subsidiaries is the plaintiff and is receiving payment in connection with such settlement or compromise; provided that, in the case of each of the foregoing clause (A), (B) and (C), the proceeds settlement or compromise of which will be used to finance all such Action does not (x) impose any non-de minimis restriction on the business or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations operations of the Company or any of its Subsidiaries with respect to such Indebtedness (or Parent or any of its Subsidiaries after the Closing) and Parent and (y) include any non-de minimis non-monetary or injunctive relief, or the admission of wrongdoing, by the Company or any of its SubsidiariesSubsidiaries or any of their respective officers or directors;
(xi) assign, includingtransfer, following the Distributionsell, the Retained Subsidiarieslease, shall not have any obligations in respect thereoflicense, encumber (other than Permitted Liens), (G) Indebtedness under the Bridge Facilityabandon, refinancings permit to lapse, or replacements thereof and of commitments thereunder, and any refinancings or replacements otherwise dispose of any such refinancing material assets or replacement Indebtedness; provided that property (including any material Intellectual Property Rights) except (A) as may be required by a Governmental Authority to permit or facilitate the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 consummation of the Company Disclosure Letter; provided, further, that Mergers or any of the Company shall consult with Parent prior other transactions contemplated in this Agreement solely to incurring Indebtedness under this clause the extent required pursuant to Section 6.5 or (G), (HB) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, furtherthat, that for the Company shall consult with Parent prior to incurring Indebtedness under this clause (H)avoidance of doubt, (I) any amendment, refinancing the loss of a customer or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement client in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and shall not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practicebe covered by this Section 6.1(b)(xi);
(vxii) except for such actions required by Benefit Plans in existence as of the date hereof: (A) increase or decrease the compensation or other benefits payable or provided to any of the current or former employees or other Service Providers of the Company or any of its Subsidiaries or any of the Employer Entities (other than, solely with respect to the Retained Business, Company’s Subsidiaries other than with respect to acquisitions of businessesthe Employer Entities, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and as permitted by the relevant Subsidiary’s management agreement with the Company, as in effect on the date hereof and substantially in the aggregate not in excess form made available to Parent); (B) increase or accelerate or commit to increase or accelerate the funding, payment or vesting of 120% compensation or benefits provided under any Benefit Plan (other than under any Benefit Plan maintained by one of the amounts reflected in the Company’s capital expenditure budget for each Subsidiaries other than the Employer Entities in the ordinary course of 2017business consistent with past practice and as permitted by the relevant Subsidiary’s management agreement with the Company in effect on the date hereof and substantially in the form made available to Parent); (C) grant or promise to grant any cash or equity or equity-based incentive awards, 2018 and 2019 set forth in Section 5.01(b)(v) bonus, change of control, severance or retention award to any of its current or former employees or other Service Providers of the Company Disclosure Letter;
or any of its Subsidiaries (vi) other than, solely with respect to the Retained BusinessCompany’s Subsidiaries other than the Employer Entities, transferin the ordinary course of business consistent with past practice and as permitted by the relevant Subsidiary’s management agreement with the Company as in effect on the date hereof and substantially in the form made available to Parent); (D) hire, leaseengage, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon furlough or otherwise dispose terminate (other than for cause) the employment of any material Intellectual Property; provided that employee, officer, director, or other Service Provider of the Employer Entities, in each case with respect to this clause (viD), whose annualized compensation exceeds $400,000 (other than, solely with respect to the Company’s Subsidiaries other than the Employer Entities, in the ordinary course of business consistent with past practice and as permitted by the relevant Subsidiary’s management agreement with the Company, as in effect on the date hereof and substantially in the form made available to Parent); or (E) (i) establish, adopt, enter into, terminate or materially amend any material Benefit Plan of the Company or the Employer Entities (or any plan, program, agreement or arrangement that would be a Benefit Plan of the Company or the Employer Entities if in effect on the date hereof) or (ii) establish, adopt, enter into, terminate or materially amend any material Benefit Plan of any Subsidiaries of the Company other than the Employer Entities (or any plan, program, agreement or arrangement that would be a Benefit Plan of any such Subsidiaries if in effect on the date hereof), in each case under this clause (ii), other than in the ordinary course of business consistent with past practice and as permitted by the relevant Subsidiary’s management agreement with the Company, as in effect on the date hereof and substantially in the form made available to Parent; provided, however, that nothing in this clause (E) shall not restrict permit any actions to establish, adopt, enter into, terminate or materially amend the types of benefit plans and arrangements described in Section 5.1(i)(iv);
(xiii) acquire any business, assets or capital stock of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than (A) the acquisition of assets from vendors or suppliers of the Company or any of its Subsidiaries in the ordinary course non-exclusive licenses of business, (B) (x) the acquisition of wealth management businesses or ordinary course security interests in connection assets of such businesses (other than any Person registered or required to be registered as a “broker” or “dealer” with the production SEC under the Exchange Act) and (y) joint ventures with or financing other minority investments in wealth management businesses (other than any Person registered or required to be registered as a “broker” or “dealer” with the SEC under the Exchange Act), in the case of film this clause (B), so long as such acquisitions, joint ventures or other minority investments (x) do not exceed $10 million (including “earnouts” or other contingent payments) individually and television programming $50 million (including “earnouts” or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensesother contingent payments) in the aggregate, in each case, based on the Company’s best estimate (made in good faith) of Intellectual Property, such consideration and payments (Bincluding “earnouts” and other contingent payments) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not as set forth in the ordinary course or $75,000,000 individually in any event final investment committee memorandum (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (ECompany’s underwriting assumptions) Affiliation Agreements;
(vii) with respect to at the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock time of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if entry into the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the definitive agreement providing for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, joint venture or minority investment, (y) would reasonably be expected to, not prevent, materially delay or materially impair impede the consummation transactions contemplated hereby and (z) would not require Parent, Stone Point or their respective Affiliates to make any additional filing or notice with or disclosure to any Governmental Authority, other than those filings or notices expressly required by this Agreement or the disclosure of information that is consistent with previous press releases, public disclosures or public statements made jointly by Parent and the Transactions;
Company or to the extent that they have been reviewed and previously approved by both Parent and the Company, or (C) (x) any pending acquisition of any Person, business or assets (whether by merger, sale of stock, sale of assets or otherwise) with an executed letter of intent or purchase agreement that is set forth on Section 6.1(b)(xiii) of the Company Disclosure Schedule or (y) any other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses acquisition of film and television and production programming (includinan
Appears in 1 contract
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries thatotherwise expressly required or permitted by this Agreement or as required by Law, (b) as Parent may approve in writing or (c) as set forth in
Section 6.01 of the Suncrest Disclosure Schedule, during the period from and after the execution date of this Agreement and prior to until the First earlier of the Effective Time (unless Parent shall otherwise approve or termination of this Agreement in writingaccordance with Article 8, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company Suncrest shall, and shall cause each of its Subsidiaries to, use (i) conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business consistent with past practicepractice in all material respects, and the Company shall, and shall cause each of (ii) use its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to maintain and preserve the Retained Business’ intact its business organization intact and maintain the Retained Business’ existing relations advantageous business relationships, and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, licensors, creditors, lessors, officers and employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company Suncrest and its Subsidiaries’ present employees and agents.
, (biii) maintain in full force and effect insurance comparable in amount and scope of coverage to that now maintained by it, and (iv) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of either Suncrest or Parent to obtain any necessary approvals of any Governmental Authority required for the transactions contemplated hereby or to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First earlier of the Effective Time or termination of this Agreement in accordance with Article 8, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned expressly required or delayed, and which determination shall take into account the Company Overview Presentation, and except permitted by this Agreement or as (1) required by applicable Law, (2B) expressly required by the Transaction Documents (including as Parent may approve in connection with the Separation and the Distribution) writing or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.01 of the Company Suncrest Disclosure Letter)Schedule, the Company Suncrest shall not and shall not permit any of its Subsidiaries to:
(a) (i) except with respect Other than pursuant to SpinCo Suncrest Options and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its Suncrest Stock Awards outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) date of this Agreement, issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the Company Disclosure Letter)creation of, (D) enter into any agreement with respect to the voting additional shares of its capital stock, or (E) purchasesecurities convertible or exchangeable into, repurchaseor exercisable for, redeem or otherwise acquire any shares of its capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities or receive a cash payment based on the value of any shares of such capital stock, (ii) permit any additional shares of its capital stock, or securities convertible or exchangeable into into, or exercisable for for, any shares of its capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities or receive a cash payment based on the value of any shares of such capital stock, to become be subject to new grant, or (iii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its stock or other than securities.
(1b) pursuant to the forfeiture Make, declare, pay or set aside for payment any dividend on or in respect of, or withholding declare or make any distribution on any shares of Taxes its capital stock.
(c) Except with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan to contracts relating to loans made in the ordinary course of business consistent business, amend or modify the material terms of, waive, release or assign any rights under, terminate, renew or allow to renew automatically, make any payment not then required under, fail to comply with past practice or violate the terms of or enter into (i) any Material Contract, Lease, Regulatory Agreement, CRA Agreement, or any Contract that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost would be a Material Contract if it were in existence on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee hereof or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect binding obligation that is material to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company Suncrest and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after (ii) any restriction on the date ability of Suncrest or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any Contract governing the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, terms of Suncrest Common Stock or to refinance, existing Indebtedness on then prevailing market terms rights associated therewith or on terms substantially consistent with any other outstanding capital stock or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date any outstanding instrument of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programsindebtedness, in each case issuedwhich is not terminable at will or within sixty (60) calendar days or less notice without payment of any amount other than for products delivered or services performed through the date of termination.
(d) Sell, made transfer, mortgage, lease, guarantee, encumber, license, let lapse, cancel, abandon or entered into in the ordinary course otherwise create any Lien on or otherwise dispose of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or discontinue any of its Subsidiaries with respect assets, deposits, business or properties (other than sales pursuant to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereofSection 6.01(p), (Gwhich Section 6.01(p) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any will exclusively govern such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (Gsales), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings except for sales, transfers, mortgages, leases, guarantees, encumbrances, licenses, lapse, cancellation, abandonments or replacements thereof on then prevailing market terms other dispositions or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) discontinuances in the ordinary course of business consistent with past practice and in a transaction that, together with other such transactions, does not exceed $50,000.
(e) Acquire (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the aggregate not in excess ordinary course of 120% business) all or any portion of the amounts reflected assets, business, deposits or properties of any other entity, except in the Company’s capital expenditure budget ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and would not reasonably be expected to present a material risk that the Closing Date will be materially delayed or that any requisite regulatory approvals will not be obtained.
(f) Amend the Suncrest Articles or the Suncrest Bylaws, or similar governing documents of any of its Subsidiaries.
(g) Except as and solely when required under applicable Law or the terms of any Employee Benefit Plan in effect as of the date hereof (taking into account actions required by Section 6.14):
(i) increase in any manner the compensation, bonus or pension, welfare, severance or other benefits of any of the current or former directors, officers, employees or other service providers of Suncrest or its Subsidiaries, except for each ordinary course merit-based increases in the base salary of 2017, 2018 and 2019 employees (other than directors) (not exceeding 110% in the aggregate) consistent with past practice or as set forth in Section 5.01(b)(v6.01(g)(ii) below,
(ii) accrue, grant, pay or agree to pay any annual, quarterly, monthly or other bonus or other incentive compensation (excluding any severance, retention, retirement or termination pay, which shall be subject to clause (v) of this Section 6.01(g) below), other than:
(A) any bonuses and other incentive compensation that are payable by Suncrest on an annual basis in the ordinary course of business consistent in all material respects with past practice for the year ending December 31, 2021; provided, however, such bonuses shall not exceed, solely for each such individual whose employment terminates upon consummation of the Merger, the lesser of (i) 110% of the amount of such employee’s annual bonus for the year ended December 31, 2020 (pro rated for the portion of the calendar year prior to the closing date) and (ii) the amount accrued as of the Closing Date on the Suncrest Financial Statements with respect to such employee.
(iii) become a party to, establish, amend, alter a prior interpretation of in a manner that enhances rights or materially increases costs, commence participation in, terminate or commit itself to the adoption of any Employee Benefit Plan or plan that would be an Employee Benefit Plan if in effect as of the date hereof, other than de minimis amendments in the ordinary course of business consistent with past practice or as required pursuant to the terms of such Employee Benefit Plan,
(iv) grant (or commit to grant) any new equity award,
(v) grant, pay or increase (or commit to grant, pay or increase) any severance, retention, retirement or termination pay, other than pursuant to (i) the Employee Benefit Plans in effect as of the date hereof as listed on Section 6.01(g)(v)(i) of the Company Suncrest Disclosure Letter;Schedule; and (ii) a pool for retention payments to the Suncrest employees by Suncrest to be mutually agreed upon by the Parties in an amount not exceeding the amount set forth in Section 6.01(g)(v)(ii) of the Suncrest Disclosure Schedule, and provided further that, except for the aggregate amount specifically set forth on Section 6.01(g)(v)(ii) of the Suncrest Disclosure Schedule, no retention award or retention payment shall be made by Suncrest pursuant to such retention pool unless the terms and conditions of such retention award and payment (including (A) the selection of each participant, (B) each participant’s proposed retention payment amount, (C) the employment and other conditions that each participant must satisfy before payment is due and (D) the timing for each retention payment) have been approved by Parent,
(vi) accelerate the payment or vesting of, or lapsing of restrictions with respect to, any stock-based compensation (including the Suncrest Stock Options and Suncrest Stock Awards) other than as expressly stated in Section 3.03, long-term incentive compensation, deferred compensation or any bonus or other incentive or deferred compensation,
(vii) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Employee Benefit Plan,
(viii) terminate the employment or services of any executive officer other than for cause,
(ix) enter into any collective bargaining or other agreement with a labor organization,
(x) forgive or issue any loans to any current or former officer, employee or director of Suncrest or its Subsidiaries,
(xi) make any Suncrest contributions to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose Suncrest 401(k) Plan outside of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) the ordinary course non-exclusive licenses of business and consistent with past practice;
(xii) hire any officer, employee or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not other service provider except in the ordinary course of business consistent with past practices, including as a result of vacancies arising on or $75,000,000 individually after the date hereof.
(h) Knowingly take, or omit to take, any action that would prevent or impede, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.
(i) (i) Incur or guarantee any indebtedness for borrowed money, other than in amounts and at maturities in the ordinary course of business consistent with past practice, and provided further that the maturity period for any event such indebtedness shall not exceed a period of ninety (90) days from the date of incurrence of such indebtedness or (ii) assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person (other than transactions among the Company endorsement of checks, commercial paper, bankers acceptances and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively bank drafts in the SpinCo Business ordinary course of business consistent with past practice).
(j) Enter into any new line of business or make any material change in any basic policies and (E) Affiliation Agreementspractices with respect to pricing or risk profile of loans, deposits and services, liquidity management and cash flow planning, marketing, deposit origination, lending, budgeting, profit and tax planning, personnel practices or any other material aspect of Suncrest’s or its Subsidiaries’ business or operations, except as required by Law or requested by any Governmental Authority;
(viii) Other than in accordance with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon investment policies of Suncrest or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not in effect on the date hereof or in securities transactions as provided in (ii) below, make any investment either by contributions to capital, property transfers or purchase of any property or assets of any Person, (ii) other than purchases of direct obligations of the United States of America or obligations of United States government agencies which are entitled to the full faith and credit of the United States of America, in any case with a remaining maturity at the time of purchase of one year or less, purchase or acquire securities of any type; or (iii) materially change the composition of the Investment Securities in its securities portfolio, including any Intellectual Propertychanges in the credit quality or the duration of the Investment Securities; provided, however, that in the case of Investment Securities, Suncrest may purchase Investment Securities if, within two (2) Business Days after Suncrest requests in writing (which request shall describe in detail the investment securities to be purchased and the price thereof) that Parent consent to making of any such purchase, Parent has approved such request in writing (which consent will not be unreasonably withheld) or has not responded in writing to such request.
(l) Except as set forth in Section 6.01(l) of the Suncrest Disclosure Schedule, enter into any settlement, compromise or similar agreement with respect to, any action, suit, claim, proceeding, order or investigation to which Suncrest or any of its Subsidiaries is or become a party after the date of this Agreement, which settlement, compromise, agreement or action, suit, claim, proceeding, order or investigation that is governed by Section 5.01(b)(vi)), except settled in an amount and for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value consideration not in excess of $50,000,000 50,000 individually if or $100,000 in the transaction is aggregate and that would not (i) impose any material restriction on the business of the Surviving Corporation or (ii) create adverse precedent for claims that are reasonably likely to be material to it or its Subsidiaries taken as a whole.
(m) Other than as determined to be necessary or advisable by Suncrest in the good faith exercise of its discretion based on changes in market condition and subject in any event to clause (u) below of this Section 6.01, alter materially its interest rate or pricing fee or fee pricing policies with respect to depository accounts of any of its Subsidiaries or, other than in the ordinary course of business, waive any material fees with respect thereto.
(n) Except as required by applicable Law or $100,000,000 individually by a Governmental Authority, (i) implement or adopt any material change in any event its interest rate and other risk management policies, procedures or practices or (Bii) transactions among the Company fail to follow in all material respects, Suncrest’s or its applicable Subsidiary’s existing policies or practices with respect to managing its exposure to interest rate and the Retained Subsidiariesother risk.
(o) Grant or commit to grant any new extension of credit to any obligor (whether a new or existing relationship) (i) if such extension of credit would equal or exceed $1,000,000 if Suncrest’s aggregate relationship exposure to such obligor, including as a result of such extension, is at least $4,000,000; (ii) if such extension of credit is secured by commercial real estate and is for at least $2,000,000; (iii) if such extension is an SBA loan where Suncrest was identified through a non-bank referral or lender and is for at least $500,000 or (iv) if such extension of credit is not secured by commercial real estate and is for at least $1,000,000; in each case, consent shall be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or his designee, notice of objection is not received by Suncrest;
(viiip) except with respect Grant or commit to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, grant any renewal or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares modification of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date an existing extension of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or credit to any other wholly owned Subsidiary obligor if such extension of the Companycredit would equal or exceed $3,000,000; provided thatin each case, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing consent shall be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or his designee, notice of objection is not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)received by Suncrest;
(ixq) with respect to the Retained BusinessSell any real estate owned, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game productioncharge-off any assets, which is subject to Section 5.01(b)(x)make any compromises on debt, spend release any collateral on loans or commit to spend in excess do any of (A) the foregoing, if such sale, charge-off, compromise or release would exceed $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 100,000 in the aggregate in (consent shall be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or his designee, notice of objection is not received by Suncrest).
(r) Renew or commit to renew any year, extension of credit that would equal or exceed: (i) $250,000 if rated Substandard; or (ii) $500,000 if rated Special Mention; in each case consent shall be deemed granted if within two (2) Business Days of written notice delivered to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinCitizens’ Chief
Appears in 1 contract
Interim Operations. (a) The Company Each of the Partnership and Parent covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent or the Partnership, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement, as provided in any Contract in effect as of the date of this Agreement, or as required by applicable Law, (2the business of it and its Subsidiaries shall be conducted in the Ordinary Course provided, that this Section 7.1(a) expressly required by shall not prohibit the Transaction Documents (including in connection with the Separation Parties and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) their respective Subsidiaries from taking commercially reasonable actions outside of the Company Disclosure Letter), Ordinary Course in response to changes or developments resulting from the Company shallCOVID-19 pandemic, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise expressly: (unless a) contemplated by this Agreement; (b) required by applicable Law or the terms of any Partnership Material Contract or Parent shall otherwise approve Material Contract, as applicable; (c) as approved in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) other Party; or (3d) otherwise expressly disclosed set forth in the corresponding subsection of Section 7.1 of the Partnership Disclosure Letter, as it relates to the Partnership and its Subsidiaries, or in Section 5.01(b) 7.1 of the Company Parent Disclosure Letter), the Company as it relates to Parent and its Subsidiaries, each Party, on its own account, shall not and shall not permit any of its Subsidiaries to:
(i) except with respect make any change to SpinCo and its Organizational Documents as in effect on the SpinCo Subsidiaries (other than date of this Agreement in any manner that would reasonably be expected to prohibit, prevent or materially impede, hinder or delay the case ability of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments such Party to the governing documents of satisfy any Subsidiary of the Company that would not preventconditions to, delay or impair the Initial consummation of, the Merger or the other Transactions);
(ii) (A) merge or consolidate itself or any of its Subsidiaries with any other Person, or (B) splitadopt a plan or agreement of complete or partial liquidation, combinedissolution, subdivide restructuring, recapitalization or reclassify its outstanding shares of capital stock (other reorganization, in each case, except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends such transactions solely between or distributions paid by a direct among, or indirect solely involving, such Party and one or more of its wholly owned Subsidiaries, or a Subsidiary of the Company to another direct such Party and one or indirect more wholly owned Subsidiary Subsidiaries of the Company or to the Company or such Subsidiary, (2) normal semiannual cash dividends on as would not reasonably be expected to result in a Partnership Material Adverse Effect or Parent Material Adverse Effect, as applicable, or (3) as would not reasonably be expected to prohibit, prevent or materially impede, hinder or delay the Common Stock as described in Section 5.01(b)(i) ability of such Party to satisfy any of the Company Disclosure Letter)conditions to, or the consummation of, the Merger or the other Transactions;
(Diii) issue, sell, pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance, or enter into any agreement Contract (including, with respect to the voting of), any of its capital stockpartnership interests, or (E) purchaselimited liability company interests, repurchase, redeem or otherwise acquire any shares of its capital stock or any equity interests, as applicable (other than the issuance of partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, (A) by a wholly owned Subsidiary of such Party to such Party or one or more of such Party’s wholly owned Subsidiaries, or by a wholly owned Subsidiary of such Party’s Subsidiary to such Subsidiary or one or more other wholly owned Subsidiaries of such Subsidiary, (B) in respect of equity-based awards granted in the Ordinary Course or (C) with respect to Parent, equity securities of Parent in excess of $500,000,000 in the aggregate (based on the market price of the securities at the time of issuance)), or securities convertible or exchangeable into or exercisable for any such partnership interests, limited liability company interests, shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable forequity interests, as applicable, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any kind to acquire any partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or such convertible or exchangeable securities; provided, that, nothing in this clause (iii) shall be deemed to restrict the vesting and/or payment, or the acceleration of the vesting and/or payment, of any awards or other equity awards in accordance with the terms of any existing equity-based, bonus, incentive, performance or other compensation plan or arrangement or Employee Benefit Plan (including, without limitation, in connection with any equity award holder’s termination of service);
(iv) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or securities convertible or exchangeable into or exercisable forfor any partnership interests, limited liability company interests, shares of capital stock or any optionsequity interests, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)as applicable;
(ixv) with respect to the Retained Businesswaive, release, assign, settle or compromise any claim, action or proceeding, including any state or federal regulatory proceeding seeking damages or injunction or other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game productionequitable relief, which is subject to Section 5.01(b)(x)waiver, spend release, assignment, settlement or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or compromise would reasonably be expected toto result in a Partnership Material Adverse Effect or Parent Material Adverse Effect, prevent, materially delay or materially impair the consummation of the Transactionsas applicable;
(xvi) make any material changes with respect to accounting policies, except as required by changes in GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or Law, including pursuant to SEC rule or policy;
(vii) make or declare any dividends or distributions to the holders of Common Units or Parent Common Stock, in each case, other than capital expenditures made in accordance the Ordinary Course, subject to Section 7.11; or
(viii) agree, authorize or commit to do any of the foregoing.
(b) Notwithstanding anything to the contrary in this Agreement, a Party’s obligations under Section 7.1(a) to take an action or not to take an action, or to cause its Subsidiaries to take an action or not to take an action, shall, with Section 5.01(b)(vrespect to any Persons (and their respective Subsidiaries) controlled by such Party, or in which such Party otherwise has a voting interest, but that are not wholly owned Subsidiaries of such Party or have public equity holders, only apply (i) to the extent permitted by the organizational documents and other than purchases governance arrangements of such entity and licenses its subsidiaries, (ii) to the extent a Party is authorized and empowered to bind such entity and its subsidiaries and (iii) to the extent permitted by the Party’s or its Subsidiaries’ duties (fiduciary or otherwise) to such entity and its subsidiaries or any of film and television and production programming (includinits equity holders.
Appears in 1 contract
Sources: Merger Agreement (Tc Pipelines Lp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use from and after the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly required by this Agreement or as required by a Governmental Entity or applicable Law and any Material Contract in effect prior to the date of this Agreement), conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course Ordinary Course of business Business and, to the extent consistent with past practicetherewith, shall use and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable efforts to preserve the Retained Businessmaintain its and its Subsidiaries’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees, agents and business associates; provided that, during any period of full or partial suspension of operations in response to COVID-19 or any COVID-19 Measures, the Company or any of its Subsidiaries may, in response to COVID-19 or any COVID-19 Measures, take such actions as are reasonably necessary (x) to protect the health and safety of the Company’s or its Subsidiaries’ employees and business associates and others other individuals having material business dealings with the Retained Business Company or any of its Subsidiaries or (including material content providersy) to respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersin each case of clause (x) and keep available (y), subject to reasonable prior consultation with Parent to the services of the Company and its Subsidiaries’ present employees and agents.
(b) extent reasonably practicable. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatforegoing sentence, from and after the date of this Agreement and prior to until the First earlier of the Effective Time (unless Parent shall otherwise approve in writingand the termination of this Agreement pursuant to Article IX, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) otherwise expressly required by this Agreement, as required by a Governmental Entity or applicable Law, as approved in writing by Parent (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distributionsuch approval not to be unreasonably conditioned, withheld or delayed) or (3) otherwise expressly disclosed set forth in the corresponding subsection of Section 5.01(b7.1(a) of the Company Disclosure Letter)Schedule, the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(iii) acquire, directly or indirectly by merger, consolidation, acquisition of stock or assets or otherwise, any business, Person, properties or assets, other than acquisitions of inventory or other goods in the Ordinary Course of Business;
(iv) transfer, sell, license, lease, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses of the Company or any of its Subsidiaries, including capital stock or other equity interests of any of its Subsidiaries, except in connection with (A) sales of obsolete assets, (B) nonexclusive licenses granted by the Company or its Subsidiaries with respect to SpinCo Intellectual Property Rights in the Ordinary Course of Business and (C) sales of inventory or other goods in the SpinCo Subsidiaries Ordinary Course of Business;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or otherwise enter into any Contract or other agreement, understanding or arrangement (whether oral or written) with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than in the case of clause (A)), (A) amend its certificate proxies or voting agreements solicited by or on behalf of incorporation the Company in connection with the Company’s annual meeting of stockholders or bylaws (B) the issuance of shares of such capital stock, other equity securities or comparable governing documentsconvertible or exchangeable securities (1) (other than amendments to the governing documents of any by a Wholly Owned Subsidiary of the Company that would not preventto the Company or another Wholly Owned Subsidiary of the Company or (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, delay as applicable, the Stock Plans in effect on the Capitalization Date);
(vi) make any loans, advances, guarantees or impair capital contributions to or investments in any Person (other than to or from the Initial Merger Company and any of its Wholly Owned Subsidiaries) and for loans or advances made to directors, officers and other employees of the Company and its Subsidiaries (x) for business-related travel, other business-related expenses, in each case, in the Ordinary Course of Business or (y) pursuant to the indemnification and advancement rights of such Persons in effect as of the date of this Agreement under any agreement between or among such Person and the Company or any Subsidiary thereof, correct and complete copies of which have been made available to Parent, or the Organizational Documents of the Company or any Subsidiary thereof;
(vii) declare, set aside, make or pay any dividend or other Transactionsdistribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company and for regular quarterly dividends declared and paid at such times and in such amounts as is consistent with historical practice over the twelve-month period prior to the date of this Agreement (Bbut under no circumstances in an amount that exceeds $0.175 per Share per calendar quarter);
(viii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, other equity interests or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests (other than (1) pursuant including with respect to the forfeiture Company, for the avoidance of doubt, Shares);
(ix) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced;
(x) make or authorize any payment of, or withholding accrual or commitment for, capital expenditures in excess of Taxes with respect to$250,000 in the aggregate, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, except to the extent set forth in each case the Company’s capital budget set forth in accordance with past practice and with the terms Section 7.1(a)(x) of the Company Stock Plans as Disclosure Schedule;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers, suppliers, agents, distributors or sales representatives (including “authorized dealers”) entered into in effect on the date Ordinary Course of Business and, for the avoidance of doubt, any Contracts entered into in connection with an action expressly permitted by any of the Subsections of this Agreement Section 7.1(a), including any material amendment, modification or supplement to an existing Contract in compliance with Section 7.1(a)(xii);
(xii) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(ix), Section 7.1(a)(vi) and Section 7.12, terminate, materially amend, materially waive, or as modified after assign, convey, encumber or otherwise transfer, in whole or in part, any material rights or interest pursuant to or in, any Material Contract, other than expirations of any such Contract in the date Ordinary Course of this Agreement Business and in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company such Contract with no further action by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect for any ministerial actions, or non-exclusive licenses, covenants not to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation▇▇▇, bonus or pensionreleases, welfare waivers or other benefits prior rights under Intellectual Property Rights owned or purported to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of be owned by the Company or any of its Subsidiaries, in each case, that are granted in the Ordinary Course of Business;
(Exiii) cancel, modify or waive any debts or similar claims held by the Company or any of its Subsidiaries having in each case a value in excess of $100 thousand in the aggregate;
(xiv) amend any License contemplated by Section 5.5(d) in any material respect, or allow any such License to lapse, expire or terminate (except where the lapse, expiration or termination of any such License is with respect to a License that has become obsolete, redundant or no longer required by applicable Law or for the operation of the Company’s business);
(xv) for the avoidance of doubt, except as expressly provided for by Section 7.11, amend, modify, terminate, cancel or let lapse a material Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by the Company or one or more of its Subsidiaries or replacement policies underwritten by reputable insurance carriers are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(xvi) other than with respect to Transaction Litigation, any Proceeding in connection with, arising out of or otherwise related to a demand for appraisal under Section 262 of the DGCL or any Tax claim, audit, assessment or dispute, which shall be governed by Section 7.16, Section 4.2(f) and Section 7.1(a)(xviii), respectively, settle or compromise any Proceeding for an amount in excess of $100 thousand in the aggregate during any calendar year, or which would reasonably be expected to (A) have a materially negative impact on the operations and reputation of the Company and its Subsidiaries or (B) involve any criminal liability or any admission of material wrongdoing or any material wrongful conduct by the Company or any of its Subsidiaries;
(xvii) make any changes with respect to accounting policies or procedures, except, in each case, as required by changes in GAAP;
(xviii) make, change or revoke any material Tax election, change an annual U.S. Federal Income or other material Tax accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to material Taxes, settle or compromise any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax;
(xix) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property Rights that are owned by the Company or any of its Subsidiaries and are material to the businesses of the Company and its Subsidiaries, except, solely with respect to Intellectual Property Rights that are not material to the businesses of the Company and its Subsidiaries, in the Ordinary Course of Business;
(xx) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by applicable Law, (A) increase in any manner the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement (other than offer letters providing for an “employment at will” relationship without any right to contractual severance, entered into with new hire employees in the Ordinary Course of Business), (C) grant any new awards, or amend or modify the terms of any outstanding awards (including, in each case, Company Equity Awards), under any Company Benefit Plan, (D) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards)Benefit Plan, (FE) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (GF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or loans to any Company Employee (other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper routine travel advances issued in the ordinary course Ordinary Course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstandingBusiness and those loans, (F) Indebtednessadvances, the proceeds of which will be used to finance all guarantees or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereofcapital contributions expressly permitted by Section 7.1(a)(vi)), (G) Indebtedness under the Bridge Facility, refinancings hire any employee or replacements thereof and engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) 200,000 or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with terminate the funding employment of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceexecutive officer other than for cause;
(vxxi) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with respect to the Retained Businessa labor union, other than with respect to acquisitions of businesseslabor organization, which is subject to Section 5.01(b)(ix)works council or similar organization; or
(xxii) agree, and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected foregoing.
(b) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect or its Subsidiaries’ operations prior to the Retained BusinessEffective Time or give the Company, transferdirectly or indirectly, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon the right to control or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses direct the Parent’s or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect Merger Sub’s operations prior to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinEffective Time.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Cards Acquisition Inc.)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries thatotherwise (i) required by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1ii) required by applicable Law, (2iii) expressly required approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or as contemplated by the Final Step Planconditioned) or (3iv) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, from the date of this Agreement until the Effective Time, the Company will, and will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course of business consistent with past practice and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to conduct preserve their business organizations intact (including the Retained Business service of key employees) and to maintain existing relations with key Persons with whom the Company and its Subsidiaries have significant relationships; provided, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Except as otherwise (w) required by this Agreement, (x) required by applicable Law, (y) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth on Section 6.1(b) of the Company Disclosure Schedule, from the date of this Agreement until the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(i) (x) adopt or submit to shareholder approval any change in the articles of incorporation or bylaws of the Company or (y) adopt any change in the comparable organizational document of any Subsidiary of the Company that, in the case of this clause (y), would adversely affect or delay the consummation of the Merger or the other transactions contemplated by this Agreement;
(ii) (x) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transaction between or among any of its Subsidiaries that would not impose, individually or in the aggregate, any changes or restrictions on its assets, operations or business or on the assets, operations and business of the Company and its Subsidiaries taken as a whole that would be adverse to Parent or any of its Subsidiaries or (y) restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, individually or in the aggregate, any changes or restrictions on the assets, operations or business or on the assets, operations and business of the Company or any of its Subsidiaries that would be adverse to Parent or any of its Subsidiaries;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (A) acquisitions of inventory, supplies and similar materials in the ordinary course of business consistent with past practice, (B) pursuant to Contracts in effect on the date of this Agreement which have been disclosed in unredacted form to Parent prior to the date of this Agreement, (C) in accordance with the Company's capital expenditure budget made available to Parent prior to the date of this Agreement and set forth in the Company shallDisclosure Schedule, and shall cause each or (D) any other acquisitions for consideration that are not in excess of $5,000,000 in the aggregate;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Lien against, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company or any of its Subsidiaries toSubsidiaries, solely or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to the extent related to the Retained Businessacquire any shares of such capital stock or such convertible or exchangeable securities, subject to compliance with the specific matters set forth belowin each case, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business other than (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersA) and keep available the services of any such transaction among the Company and its wholly-owned Subsidiaries or among the Company's wholly-owned Subsidiaries that would not be adverse to Parent or any of its Subsidiaries’ present employees and agents.
, or (bB) Without limiting any issuance, sale, grant or transfer of Shares pursuant to (1) the generality of, and in furtherance of, exercise or settlement of Company Options or Company RSU Awards outstanding as of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and date of this Agreement or granted after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve not in writing, which approval shall not be unreasonably withheld, conditioned violation of this Agreement or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents grant of Company Restricted Share Awards after the date of this Agreement not in violation of this Agreement;
(including in connection with the Separation and the Distributionv) make any loans, advances or capital contributions to any Person (3other than (A) otherwise expressly disclosed in Section 5.01(b) of to the Company Disclosure Letter), the Company shall not and shall not permit or any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)wholly-owned Subsidiaries, (B) split, combine, subdivide or reclassify its outstanding shares of capital stock pursuant to any Contract described in clause (except for any such transaction by a wholly owned subsidiary F) of the Company which remains definition of a wholly owned Subsidiary after consummation of such transaction), "Material Contract," (C) extensions of credit terms to customers or vendors in the ordinary course of business and (D) customary loans or advances to employees in the ordinary course of business in amounts not to exceed $10,000,000 in the aggregate at any time);
(vi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1A) any dividends or other distributions paid by a direct or indirect wholly any wholly-owned Subsidiary of the Company to another direct the Company or indirect wholly to any other wholly-owned Subsidiary of the Company or and (B) regular quarterly dividends to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) shareholders of the Company Disclosure Letter)by the Company in an amount not to exceed $0.18 per Share, (D) enter into any agreement in each case declared and paid at such times as is consistent with respect historical practice over the most recent fiscal year ended prior to the voting date of its capital stockthis Agreement);
(vii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly such transaction by a wholly-owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not preventbe adverse to Parent or any of its Subsidiaries and (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Options, materially delay Company Restricted Share Awards or materially impair Company RSU Awards or payment of the Transactionsexercise price in respect of Company Options, in each case, outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(iiiviii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishcreate, adoptincur, amend assume, guarantee, endorse, suffer to exist or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent otherwise be liable with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses respect to any directorindebtedness for borrowed money, officer, employee issue or sell any debt securities or warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except (A) indebtedness for borrowed money in an amount not to exceed $10,000,000 in the ordinary course of business consistent with past practice with respect to aggregate that is (1) employees below on terms not materially less favorable in the level of Executive Vice President and aggregate than the Company's existing indebtedness or (2) employees prepayable at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationany time at par (plus customary floating rate breakage costs, bonus or pension, welfare or other benefits prior to such changeif applicable), (DB) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider guarantees of indebtedness of the Company or any of its wholly-owned Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness indebtedness between or among the Company and/or any of its wholly-owned Subsidiaries and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding financing of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing accounts payable in the ordinary course of business consistent with past practice;
(vix) other than in accordance with respect the Company's capital expenditure budget made available to Parent prior to the Retained Businessdate of this Agreement and set forth in the Company Disclosure Schedule, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make incur or commit to any capital expenditure or expenditures, except capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 1,000,000 individually or $200,000,000 10,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactionsaggregate;
(x) other than capital expenditures made in the ordinary course of business or in connection with any matter to the extent such matter is expressly permitted by any other clause of this Section 6.1(b), (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (B) amend or modify in any material respect or assign (other than assignments between or among the Company and/or any of its Subsidiaries that would not be adverse to Parent or any of its Subsidiaries) or terminate any Material Contract, other than expirations of any such Contract in accordance with Section 5.01(b)(vits terms; provided, however, that in no event may the Company enter into any Contract described in clause (B) and or (E) of the definition of a "Material Contract" or any Specified Contract, except, in each case, as would not be adverse to Parent or any of its Subsidiaries following the Effective Time other than purchases in any de minimis respect;
(xi) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(xii) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings (other than any audit or other proceeding in respect of Taxes), for an amount in excess of $2,000,000 individually or $25,000,000 in the aggregate or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Authority that would restrict the future activity or conduct of Parent, the Company or any of their respective Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person other than with respect to monetary settlements only, settlements or compromises of any action, suit, claim, hearing, arbitration, investigation or other proceedings to the extent reflected or reserved against in the balance sheet (or the notes thereto) of the Company included in the Company Reports filed prior to the date of this Agreement for an amount not in excess of the amount so reflected or reserved;
(A) make or change any material Tax election, other than consistent with past practice, (B) change any entity classification for federal income tax purposes of any material Subsidiary, (C) create an entity outside of the United States that is (x) a direct Subsidiary of the Company or any of its domestic Subsidiaries and licenses (y) treated as a "disregarded entity" or partnership for U.S. federal income tax purposes, or knowingly create a permanent establishment of film and television and production programming the Company or any domestic Subsidiary outside the United States, (includinD) file any material amended Tax Return, (E) adopt any material accounting method for Taxes, other than consistent with past practice or change any material accounting method for Taxes,
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees From the date hereof until the Acceptance Time, except (A) as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not may be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2B) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution prior written consent of Parent (which consent shall not unreasonably be withheld, conditioned or delayed), (C) as expressly contemplated by the Final Step Plan) this Agreement, or (3D) otherwise expressly disclosed as set forth in Section 5.01(a5.1(a) of the Company Disclosure Letter)Schedule, (x) the Company shall cause the business of the Company and its Subsidiary to be conducted in the ordinary course consistent with past practice and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct (i) preserve intact its and its Subsidiary’s present business organization and maintain the Retained Business current relationships with Governmental Entities and other Persons having business dealings with the Company and its Subsidiary, (ii) prepare and file any requisite regulatory filings with any Regulatory Authority on a timely basis and consistent with their respective past practices and (iii) obtain and maintain quantities of each finished Company Pharmaceutical Product and related raw materials and components that the Company reasonably expects to be required for use in the ongoing and anticipated phase 2 and phase 3 clinical trials of each Company Pharmaceutical Product and (y) without limiting the generality of clause (x) above and in furtherance thereof, the Company shall not and shall not permit its Subsidiary to:
(i) amend its certificate of incorporation, bylaws or comparable governing documents;
(ii) merge or consolidate the Company or its Subsidiary with any other Person, except for such transactions between the Company and its Subsidiary, or dissolve or completely or partially liquidate;
(iii) form any Subsidiary or acquire assets from any other Person with a value or purchase price in the aggregate in excess of $300,000 in any transaction or series of related transactions, other than acquisitions in the ordinary course of business consistent with past practice with a value or purchase price in the aggregate not in excess of $300,000 or pursuant to Material Contracts in effect as of the date hereof;
(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 or its Subsidiary, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than (A) issuance or sales of Shares upon exercise of the Company Options or the vesting of Company Restricted Stock or (B) as permitted under Section 5.1(a)(xviii);
(v) other than in the ordinary course of business consistent with past practice, and the create or incur any Lien on (i) any assets (other than Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(bIntellectual Property) of the Company Disclosure Letter)or its Subsidiary having a value in excess of $300,000, (ii) any material Intellectual Property of the Company shall not and shall not permit any of or its Subsidiaries to:Subsidiary, or (iii) material Intellectual Property licensed to the Company or its Subsidiary;
(ivi) except with respect make any loans, advances, guarantees or capital contributions to SpinCo and the SpinCo Subsidiaries or investments in any Person (other than the Company or its Subsidiary) in excess of $300,000 in the case of clause aggregate;
(A)), vii) (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, accrue, set aside aside, make or pay any dividend or other distribution payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by the Company’s Subsidiary to the Company), (B) repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities, except for any split, combination or reclassification of capital stock of a direct wholly owned Subsidiary of the Company, or indirect any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company to the Company or another direct or indirect wholly owned Subsidiary of the Company or to the Company Company, or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (DC) enter into any agreement with respect to the voting of its capital stock;
(viii) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise) any other Person’s indebtedness for borrowed money, or (E) purchase, repurchase, redeem issue or otherwise sell any debt securities or warrants or other rights to acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms debt security of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchasesits Subsidiary, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $300,000 in the aggregate;
(ix) except as contemplated in capital budgets furnished to Parent prior to the date of this Agreement, make any capital expenditures in excess of $300,000 in the aggregate;
(x) make any changes with respect to accounting policies or procedures other than as required by changes in GAAP;
(xi) settle any litigation for an amount in excess of $300,000;
(xii) other than as reasonably necessary to facilitate the research and/or clinical operations of the Company in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, enter into any Contract that does not materially increase would have been a Material Contract had it been entered into prior to this Agreement;
(xiii) other than as reasonably necessary to facilitate the cost research and/or clinical operations of such the Company Plan in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, amend, modify or benefits provided under such Company Plan based on the cost on terminate any Material Contract;
(xiv) other than pursuant to Contracts in effect prior to the date hereof, (B) grant transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or provide allow to lapse or expire or otherwise dispose of any transaction material assets, licenses, operations, rights or retention bonuses to any director, officer, employee or other service provider businesses of the Company or any its Subsidiary, except for (A) sales, transfers or dispositions of its Subsidiariesobsolete or worthless assets or (B) sales, (C) increase the compensationtransfers, bonus or pensionleases, welfare licenses or other benefits dispositions of any director, officer or employee assets with a fair market value not in excess of the Company or any of its Subsidiaries, except $300,000 in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesaggregate;
(ivxv) incur assign or grant an exclusive license of any Indebtedness material right in any Company Intellectual Property necessary or issue useful for the manufacture, use, sale, offer for sale or importation of any warrants Company Pharmaceutical Products or other rights that otherwise enables a third party to acquire any Indebtedness, except (A) in the ordinary course of business consistent compete with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facilitymanufacture or sale of any product that competes with any Company Pharmaceutical Product;
(xvi) waive any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product and, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (EA) commercial paper issued amend any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product or (B) enter into any Contract that would constitute an IP Contract if entered into prior to the ordinary course date of business consistent with past practice this Agreement;
(xvii) except as contemplated in operating budgets furnished to Parent prior to the date of this Agreement, commence (other than planning) or alter, in a principal amount not manner that would materially increase the expenditures to exceed $250,000,000 in be made by the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses Company in connection therewith, any new Phase I, Phase II, Phase III or Phase IV human clinical trial (including initiation of a new institutional review board) involving any Company Pharmaceutical Product;
(xviii) except as required by applicable Law or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company otherwise required pursuant to existing Contracts or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations Benefit Plans in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company effect as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition hereof and not for speculative purposes; provided that the Company shall consult with Parent prior made available to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) aboveParent, (KA) Indebtedness and replacements and refinancings thereof incurred in connection with increase the funding salaries or wages of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtednessany Employee, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing except in the ordinary course of business consistent with past practice, (B) promote any Employee except in order to fill a position vacated after the date of this Agreement, (C) pay any bonus to any Employee other than a bonus pursuant to Section 5.8(f), (D) enter into or establish any new employment agreement or change in control severance agreement with any Employee, other than with any new Employee hired to replace an Employee who is party to any such agreement, (E) make any severance payments to any Employee in excess of what they are contractually entitled to, (F) make any new equity awards to any Employee or accelerate the vesting under any equity compensation plan (except for vesting accelerated pursuant to Section 3.3 of this Agreement), (G) other than in accordance with Section 5.1(a)(xviii)(D), establish, adopt, terminate or materially amend any Benefit Plan, (H) hire any employee at the level of Vice President or above, (I) hire any employee in a sales, general or administrative capacity with an annual base salary in excess of $150,000, or (J) hire any employee (other than an employee described in clause “(I)” above) with an annual base salary in excess of $250,000;
(vxix) except as required by applicable Law, make, change or rescind any material Tax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to material Taxes, enter into any closing agreement with respect to a material Tax, surrender any right to claim a material Tax refund, or change any material method of Tax accounting;
(xx) enter into or consummate any tax planning or restructuring transaction which involves any transfer, assignment or other disposition of any Company Intellectual Property;
(xxi) (A) waive or amend (except in the course of diligently prosecuting the Company Intellectual Property) the Company’s rights in or to any Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, (B) fail to diligently prosecute or maintain any material Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, in each case in the name of Company or its Subsidiary or (C) fail to make any required payments in accordance with the terms of any IP Contract pursuant to which the Company licenses any material Intellectual Property;
(xxii) qualify any new site for manufacturing of any Company Pharmaceutical Product; or
(xxiii) enter into any Contract to do any of the foregoing.
(b) Each of Parent and Merger Sub, subject to the limitations set forth in Section 5.4(e)(ii), on the one hand, and the Company, on the other hand, agrees that, except as otherwise provided in this Agreement, it shall not knowingly take any action that would reasonably be expected to prevent or delay the consummation of the Offer, the Merger and the other Transactions in accordance with the terms of this Agreement. Without limiting the generality of the foregoing, each of Parent and Merger Sub agrees that, after the date hereof and prior to the Effective Time, it shall not consummate or agree to consummate any purchase or other acquisition of any assets, licenses, operations, rights or businesses that, individually or in the aggregate with any other such purchase or acquisition, would reasonably be expected to (i) prevent or delay the parties hereto from obtaining any consents, registrations, approvals, permits or authorizations required to be obtained from any Governmental Entity in connection with the consummation of the Offer, the Merger and the other Transactions, (ii) result in the imposition of a condition or conditions on any such consents, registrations, approvals, permits or authorizations, or (iii) otherwise prevent or delay any party hereto from performing its obligations hereunder or consummating the Offer, the Merger and the other Transactions.
(c) The Company shall promptly notify Parent and Merger Sub of any significant data relating to the Key Product, including information related to any significant adverse events with respect to the Retained BusinessKey Product.
(d) Each party hereto shall promptly advise the other parties hereto of any Proceeding or material claim threatened, other than commenced or asserted against or with respect to acquisitions any such party relating to the Transactions and promptly provide the parties hereto with copies of businessesall material complaints, which is subject pleadings and filings related thereto.
(e) From the date hereof until the Acceptance Time, the Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to Section 5.01(b)(ix)any Company Pharmaceutical Product, (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of any of the Company or its Subsidiary, and any material correspondence or other than with respect material communication proposed to film and television production and programming (including sports rights) with third parties be submitted or video game productionotherwise transmitted to the FDA or any other Governmental Entity by or on behalf of any of the Company or its Subsidiary, which is subject to Section 5.01(b)(x), make or commit in each case relating to any capital expenditures other than Company Pharmaceutical Product, (iii) keep Parent promptly informed of (A) in connection any communication (written or oral) with or from the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or FDA and any other Governmental Entity and (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(vany material communications (written or oral) of received from any Person relating to the Company Disclosure Letter;
Intellectual Property and (viiv) promptly inform Parent and provide Parent or Merger Sub with respect a reasonable opportunity (but no more than three (3) Business Days) to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensescomment, in each case, of Intellectual Propertyprior to making any material change to any study protocol, adding any new trial, making any material change to a manufacturing plan or process, making any material change to a development timeline or initiating, or making any material change to, promotional or marketing materials or activities relating to any Company Pharmaceutical Product.
(Bf) Notwithstanding the granting above, the delivery of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiariesnotice pursuant to Section 5.1(b), (D5.1(c), 5.1(d) licensesor 5.1(e) shall not limit or otherwise affect the representations, saleswarranties, letting lapsecovenants or agreements of the parties hereto, abandonment and cancellations the remedies available hereunder to the party hereto receiving such notice or the conditions to such party’s obligation to consummate the Offer, the Merger or any of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;other Transactions.
(viig) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not Nothing contained in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with shall give Parent or Merger Sub, directly or indirectly, the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries right to control the Company or to any other wholly owned its Subsidiary or direct the business or operations of the Company; provided thatCompany or its Subsidiary prior to the Effective Time. Prior to the Effective Time, for the avoidance Company shall exercise, consistent with the terms and conditions of doubtthis Agreement, granting customary profit participation complete control and supervision over its operations and the operations of its Subsidiary. Nothing in this Agreement, including any of the actions, rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing restrictions set forth herein, shall be deemed not interpreted in such a way as to be an issuanceplace the Company, sale Parent or grant Merger Sub in violation of any shares rule, regulation or policy of capital stock or any securities convertible or exchangeable into or exercisable forGovernmental Entity, or including any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinapplicable Law.
Appears in 1 contract
Sources: Merger Agreement (Pharmasset Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except (w) as otherwise expressly contemplated by this Agreement, (1x) as required by applicable Law, (2y) expressly required by for any COVID-19 Measures, subject, to the Transaction Documents extent such applicable COVID-19 Measure is inconsistent with past practice, to prior consultation with Parent (including in connection with to the Separation extent such prior consultation is legally permissible and the Distribution or as contemplated by the Final Step Planpracticable) or (3z) otherwise expressly disclosed as set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter), (i) the business of the Company and its Subsidiaries shall be conducted in all material respects in the Ordinary Course of Business and (ii) to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, Entities and customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees lessors and other business associates and others having material business dealings relationships with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers Company and advertisers) its Subsidiaries and keep available the services of the Company its and its Subsidiaries’ present employees officers and agentskey Employees; provided that no action by the Company or any of its Subsidiaries with respect to matters whose subject matter is specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this Section 6.1(a) unless such action would constitute a breach of such other provision.
(b) Without limiting the generality of, of and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatof Section 6.1(a), from and after the date of this Agreement and prior until the Effective Time, except (v) as expressly contemplated by this Agreement, (w) as required by applicable Law, (x) for any COVID-19 Measures, subject, to the First Effective Time extent such applicable COVID-19 Measure is inconsistent with past practice, to prior consultation with Parent (unless to the extent such prior consultation is legally permissible and practicable), (y) as approved in writing by Parent shall otherwise approve in writing, (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed as set forth in Section 5.01(b6.1(b) of the Company Disclosure Letter), the Company Company, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to the Company’s Organizational Documents or the Organizational Documents of any of the Company’s Subsidiaries;
(ii) except for any such transactions among its direct or indirect wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with any other Person or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets outside of the Ordinary Course of Business from any other Person (A) with a fair market value or purchase price in excess of $25 million in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation or (B) that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the Transactions, in each case, other than transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, Encumbrance of, or otherwise enter into any Contract with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case issuance of clause (A)), shares (A) amend by its certificate direct or indirect wholly owned Subsidiary to it or another of incorporation its direct or bylaws indirect wholly owned Subsidiaries, (B) in respect of equity-based awards outstanding as of the date of this Agreement or comparable governing documentsgranted in accordance with Section 6.1(b)(xviii) or (C) granted in accordance with Section 6.1(b)(xviii), in each of clauses (B) and (C), in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities (other than amendments to the governing documents grant of equity-based awards in accordance with Section 6.1(b)(xviii));
(v) create or incur any Subsidiary Encumbrance (other than any Permitted Encumbrances) over any material portion of the Company’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the Ordinary Course of Business on any of its assets or any of its Subsidiaries, except for Encumbrances (A) that are required by or automatically effected by Contracts in place as of the day hereof, (B) that do not materially detract from the value of such assets or (C) that do not materially impair the operations of the Company that would not preventor any of its Subsidiaries;
(vi) make any loans, delay advances, guarantees or impair capital contributions to or investments in any Person (other than (A) to or from the Initial Merger Company and any of its direct or the other Transactionsindirect wholly owned Subsidiaries or in accordance with Section 6.1(b)(xviii), (B) split, combine, subdivide advances to Employees or reclassify its outstanding shares consultants for travel and other business-related expenses in the Ordinary Course of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), Business or (C) extensions of trade credit in the Ordinary Course of Business) in excess of $10 million in the aggregate;
(vii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of Subsidiary) or modify in any material respect its dividend policy;
(viii) reclassify, split, combine, subdivide or redeem, purchase (through the Company Company’s share repurchase program or to the Company or (2otherwise) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant with respect to the forfeiture ofcapital stock or other equity interests of a direct or indirect wholly owned Subsidiary of the Company, (A) in order to pay Taxes in connection with the exercise or withholding vesting of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units Equity Awards outstanding as of the date hereof or Company Performance Stock Units, in each case granted in accordance with past practice and with Section 6.1(b)(xviii), pursuant to the terms of the Company Stock Plans as Plan and the applicable award agreement, in effect on the date Ordinary Course of this Agreement Business or (or as modified after B) the date acquisition by the Company of this Agreement any Company Equity Awards granted pursuant to any Company Stock Plan in accordance connection with the terms forfeiture of this Agreementsuch awards;
(ix) except as provided in the Company’s capital expenditure plan set forth in Section 6.1(b)(ix) of the Company Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (A) not in excess of $20 million in the aggregate during any consecutive twelve (12) month period (other than capital expenditures within the thresholds set forth in Section 6.1(b)(ix) of the Company Disclosure Letter), (B) expenditures not in excess of $20 million (net of insurance proceeds) in the aggregate that the Company reasonably determines are necessary to avoid a material business interruption or maintain the safety and integrity of any asset or property or (2C) purchases, repurchases, redemptions paid by any direct or other acquisitions of securities of any indirect wholly owned Subsidiary of the Company by to the Company or to any other direct or indirect wholly owned Subsidiary of the Company), in each case in response to any unanticipated and subsequently discovered events, occurrences or developments;
(iix) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions in the Ordinary Course of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongBusiness, or the restructuring, reorganization or liquidation of, enter into any wholly owned Subsidiaries of the Company Contract that would not preventhave been a Material Contract had it been entered into prior to this Agreement, amend, modify or supplement in a manner that is materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses adverse to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, waive any material rights under, or terminate any Material Contract other than (A) expirations and renewals of any such Contract in the Ordinary Course of Business in accordance with the terms of such Contract, (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other non-exclusive rights under Intellectual Property owned by the Company or its Subsidiaries granted in the Ordinary Course of Business or (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of agreement among the Company and its direct or any of its Subsidiaries, except in indirect wholly owned Subsidiaries or among the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at Company’s direct or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its indirect wholly owned Subsidiaries;
(ivxi) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than in the ordinary course Ordinary Course of business consistent Business or with past practice in a principal amount respect to amounts that are not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial material to the Company and its Subsidiaries, taken as a whole, than existing Indebtednesscancel, release or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries except debts or claims among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries;
(1) settle or compromise, or offer or propose to settle or compromise any material Proceeding, including before a Governmental Entity, except for such Proceedings that (A) involve solely monetary remedies with a maturity date no more than value not in excess of $10 years after million in the date of aggregate to be paid by the Contract evidencing such IndebtednessCompany and its Subsidiaries, (B) except do not impose any restriction on the Company’s business or the business of its Subsidiaries, (C) do not relate to any Transaction Litigation and (D) do not include an admission of liability or fault on the part of the Company or its Subsidiary or (2) commence any material litigation or other claim, suit, action or proceeding, against any third party (excluding Parent or any of its Affiliates or Representatives) other than (A) in the Ordinary Course of Business consistent with past practice or (B) commencing any counterclaim to preserve, protect or enforce any Intellectual Property or material assets of the Company (provided, that notwithstanding the preamble of this Section 6.1(b), in the case of this clause (2), the Company shall only be obligated to consult with Parent and consider in good faith Parent’s feedback thereon, including with respect to strategy, but shall not require Parent’s consent);
(xiii) fail to use commercially reasonable efforts to maintain in effect any material insurance policy, unless simultaneous with any termination, cancellation or lapse of such material insurance policy, replacement policies are in effect providing coverage substantially similar to the Bridge Facilitycoverage under the terminated, cancelled or lapsed material insurance policies;
(xiv) adopt or implement any shareholder rights plan, “poison pill,” anti-takeover plan or other similar agreement or plan;
(xv) write down any of its material assets or materially amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(xvi) (A) make, change or rescind any material election in respect of Taxes or accounting policies, (B) adopt or change an annual Tax accounting period or any material Tax accounting method, (C) enter into any closing agreement with respect to Taxes, (D) settle any material Tax claim, audit, assessment or dispute materially in excess of the amount reserved therefore, (E) surrender any right to claim a refund of a material amount of Taxes or (F) fail to file when due (taking into account any available extensions) any material Tax Return;
(xvii) transfer, sell, lease, license, grant, divest, cancel, abandon, allow to lapse or expire or otherwise dispose of, any assets (tangible or intangible), product lines or businesses that are, in replacement ofeach case, or material to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company it and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for in connection with (A) sales of or non-exclusive licenses of the foregoing provided in the Ordinary Course of Business, (B) sales of obsolete assets, (C) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiariesnot including services) with a fair market value not in excess of $50,000,000 individually if the transaction is not 15 million in the ordinary course or $100,000,000 individually aggregate other than pursuant to Material Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with this Agreement and (D) sales among the existing Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries;
(xviii) except as set forth in Section 6.1(b)(xviii) of the Company Disclosure Letter, or as required by the terms of such awards and any Benefit Plan as in effect on the date hereof, as permitted under this Agreement or as required by applicable Law, increase or change the compensation or benefits payable to any Employee other than in the Ordinary Course of Business; further, except as (x) disclosed in Section 6.1(b)(xviii) of the Company Stock PlansDisclosure Letter or (y) as required pursuant to a Benefit Plan in effect as of the date of this Agreement or (z) as required pursuant to applicable Law, the Company shall not: (A) grant any new long-term incentive or equity-based awards or amend or modify the terms of any such outstanding awards under any Benefit Plan, (B) Investment Preferred Stock (as defined in the Bridge Facility) grant any retention or transaction bonuses, (C) increase or change the compensation or benefits payable to any executive officer (other than (y) changes in health and welfare benefits that are generally applicable to all salaried Employees in the Ordinary Course of Business or (z) increases in the base salaries and benefits of any executive officer in the Ordinary Course of Business), (D) terminate, enter into, amend or renew (or communicate any intention to take such action) any material Benefit Plan, other than routine amendments to health and welfare plans (other than severance plans) that do not materially increase benefits or result in a material increase in administrative costs, or adopt any compensation or benefit arrangement that would be a material Benefit Plan if it were in existence as of the date of this Agreement, (E) accelerate the vesting of any compensation for the benefit of any Employee, (F) increase or change the severance terms applicable to any Employee, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan (other than contributions to the trust of a tax-qualified employee benefit plan in effect on the date hereof), (H) other than as required by wholly owned Subsidiaries GAAP, change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, (I) waive, release, amend or fail to enforce the restrictive covenant obligation of any Employee who is in a position at or above the level of Senior Director or (J) terminate or transfer the employment or services of any Employee who is in a position at or above the level of Senior Director (other than for cause) or hire or engage any Person to be an Employee in a position at or above the level of Senior Director (provided, the Company shall consult with Parent regarding the termination or transfer of the employment or services of any Employee who is in a position at the level of Director (other than for cause) and the hiring or engagement of any Person to be an Employee in a position at the level of Director) and, in each case, consider in good faith Parent’s feedback thereon);
(xix) except as set forth in Section 6.1(b)(xix) of the Company Disclosure Letter, recognize any Labor Organization as the representative of any of the employees of the Company or to its Subsidiaries, or become a party to, establish, adopt, modify, amend, renew, extend, commence negotiations for or terminate any collective bargaining agreement or other wholly owned Subsidiary similar written agreement with a Labor Organization, in each case, other than in the Ordinary Course of Business or as required by applicable Law;
(xx) incur any Indebtedness (including the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant issuance of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any optionsdebt securities, warrants or other rights to acquire, acquire any debt security) or guarantee any such shares Indebtedness, except for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not Indebtedness for borrowed money incurred in the ordinary course Ordinary Course of Business under the Company’s revolving credit facilities and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase other lines of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value credit existing as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinof
Appears in 1 contract
Sources: Merger Agreement (Rogers Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, that from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) business of the Company Disclosure Letter)and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their commercially reasonable efforts to preserve the Retained Business’ organization their respective business organizations intact and to maintain the Retained Business’ their existing relations and goodwill with Governmental Entities, customers, suppliers, regulators, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providersunless Parent shall otherwise approve in writing (which approval will not be unreasonably withheld or delayed)), studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersexcept as otherwise expressly contemplated by this Agreement or disclosed in Section 6.1(a) and keep available the services of the Company Disclosure Letter, except as required by applicable Law and its Subsidiaries’ present employees except that this sentence shall not prohibit actions or omissions that would be prohibited by clauses (i) through (xv) of the following sentence but are not so prohibited because they are within the applicable exceptions and agents.
(b) Without limiting the generality of, and permissions of such clauses or are approved by Parent in furtherance of, the foregoingwriting as provided therein. In addition, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing (which approval shall will not be unreasonably withheld, conditioned withheld or delayed)), and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly contemplated by this Agreement or disclosed in Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries toexcept as required by applicable Law:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), Company shall not (A) amend its certificate articles of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), bylaws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual other than regular quarterly cash dividends on the Common Stock as described Company Shares approved by the Company’s board of directors and in Section 5.01(b)(i) of the Company Disclosure Letter), an amount which is consistent with past practice; or (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire or permit any of the Company’s Subsidiaries to purchase or otherwise acquire any shares of the Company’s or any of its Subsidiaries’ capital stock or any securities convertible into or exchangeable into or exercisable for any shares of its such capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)stock;
(ii) neither the Company nor any of its Subsidiaries shall merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than except for any such transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly among wholly-owned Subsidiaries of the Company that would not prevent(or the Company and its wholly-owned Subsidiaries), materially delay or materially impair the Transactions)adopt a plan of liquidation, dissolution, restructuring, recapitalization or other reorganization;
(iii) except neither the Company nor any of its Subsidiaries shall take any action that would prevent the Merger from qualifying as expressly required by a “reorganization” within the meaning of Section 368(a) of the Code;
(iv) neither the Company nor any Company Plan as in effect on the date hereof: (A) 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 terminate otherwise modify, any material Company Plan Compensation and Benefit Plans or amend increase the terms salary, wage, bonus or other compensation of any outstanding equitydirectors, officers or key employees except (A) 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 directors, 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 the Company (w) institute a broad based change in compensation, (x) increase or institute any new employment agreement, severance, retention, or similar benefits, (y) increase or institute any transaction or deal bonus with respect to the Merger which could result in payments upon the Merger, or (z) make grants or awards of Company Options, Company Restricted Stock or Company Awards, unless such grants or awards are consistent with past practice, approved in advance by Parent (such approval not to be unreasonably withheld or delayed), made subject to the condition, in the case of grants or awards of Company Restricted Stock, that the proposed recipient provide the Company with an irrevocable Election and agreement to receive only Stock Consideration (and the right, if any, to receive cash in lieu of fractional shares pursuant to Section 4.3(h)) in the Merger, and contain a 5-based awards year vesting schedule that will not accelerate as a result of the Merger, (B) for actions necessary to satisfy existing contractual obligations under Company Compensation and Benefit Plans existing as of the date of this Agreement, or (C) to comply with Section 409A of the Code;
(v) neither the Company nor any of its Subsidiaries shall issue or sell any debt securities or warrants or other than rights to acquire any debt security of the Company or any of its Subsidiaries, or otherwise incur any Indebtedness, except for (A) Indebtedness incurred pursuant to any agreement described in Section 5.1(j)(i)(D) of the Company Disclosure Letter in the ordinary course; (B) Indebtedness for borrowed money in replacement of existing Indebtedness for borrowed money which has matured or is being refunded, so long as such action taken for purposes replacement Indebtedness is on customary commercial terms and does not increase the principal amount of replacingthe existing Indebtedness which it replaces, renewing or extending a broadly applicable material (C) Indebtedness between the Company Plan and its wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice that does not materially increase practices; or (D) guarantees by the cost Company of such Company Plan or benefits provided under such Company Plan based on the cost Indebtedness of its wholly-owned Subsidiaries existing on the date hereof, of this Agreement or incurred in accordance with the preceding clauses (A) and (B) grant or provide any transaction or retention bonuses to any director), officer, employee or other service provider provided that the Company shall not permit the aggregate Indebtedness of the Company or and its Subsidiaries, determined on a consolidated basis, at any time prior to the Effective Time to exceed $200,000,000 in the aggregate.
(vi) neither the Company nor any of its Subsidiaries, (C) increase the compensation, bonus Subsidiaries shall acquire any material assets or pension, welfare or a license therefor other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except than in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement ofpractices, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x)incur, make or commit to any capital expenditures (or any obligations or liabilities in connection therewith) other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due pursuant to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) existing Contracts or (B) in the ordinary course of business consistent with past practice and in an amount not to exceed $7,500,000 in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letterand its Subsidiaries in any period of 90 consecutive days beginning with the date of this Agreement;
(vivii) with respect to neither the Retained Business, Company nor any of its Subsidiaries shall transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties property or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if 250,000 individually, or $1,000,000 in the transaction is not aggregate, except (A) for transfers, leases, licenses, sales, mortgages, pledges, Liens, or other dispositions in the ordinary course or $100,000,000 individually in any event of business consistent with past practice or (B) transactions among the Company and the Retained Subsidiariespursuant to existing contracts or commitments;
(viii) except with respect to SpinCo and neither the SpinCo Subsidiaries, Company nor any of its Subsidiaries shall issue, deliver, pledge, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any otherwise encumber shares of its capital stock or any securities convertible or exchangeable into or exercisable forinto, or any optionsrights, warrants or other rights options to acquire, any such sharesshares except, except (A) for any Company Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units Options and Company Deferred Stock Units Awards outstanding on the date of this Agreement in accordance with the existing terms of such awards and under the Company Stock Plans, (B) Investment Preferred awards of Company Options, Company Restricted Stock (as defined or Company Awards granted hereafter under the Company Stock Plans in the Bridge Facility) or (C) by wholly owned Subsidiaries accordance with and subject to the limits of Section 6.1(a)(iv) and Company or Shares issuable pursuant to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)Company Options and Company Awards;
(ix) with respect to neither the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess Company nor any of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to its Subsidiaries shall acquire any business, corporation, partnership, limited liability company, joint venture, association or other entity or division thereof, whether by merger, consolidation, purchase of shares, property or assetsassets or otherwise;
(x) neither the Company nor any of its Subsidiaries shall make any material change with respect to accounting policies or procedures, licenses except as required by changes in GAAP or otherwise by Law;
(valuing xi) except as required by Law, neither the Company nor any of its Subsidiaries shall (A) make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any material method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods or (B) settle or resolve any material Tax controversy;
(xii) neither the Company nor any of its Subsidiaries shall enter into any line of business other than the current lines of business of the Company or any of its Subsidiaries;
(xiii) neither the Company nor any of its Subsidiaries shall (A) other than in the ordinary course of business consistent with past practice with respect to clauses (x) and (z) hereof, enter into any non-cash consideration at competition Contract or other Contract that (x) purports to limit in any material respect either the type of business in which the Company or its fair market value as Subsidiaries (or, after the Effective Time, Parent or its Affiliates) may engage or the manner or locations in which any of them may so engage in any business, (y) would reasonably be likely to require the disposition of any material assets or line of business of the Company or its Subsidiaries or, after the Effective Time, Parent or its Affiliates, or (z) would require the Company or its Subsidiaries to deal exclusively with a Person or related group of Persons, (B) enter into any Contract that would be considered a Company Material Contract hereunder if in effect on the date of this Agreement except in the agreement for ordinary course consistent with past practices or (C) terminate, amend, or modify in any material respect any such acquisition)Contract or any Company Material Contract or waive any material right thereunder; provided provided, however, that neither the Company nor any of its Retained Subsidiaries shall be deemed in breach of this Section 6.1(a) in the event that the Company or any such Subsidiary shall amend or cause to be amended any employment or similar agreement to which the Company or any of its Subsidiaries is a party as of the date hereof solely for the purpose of causing such agreement to be in compliance with Section 409A of the Code (in a manner which is designed to avoid adverse tax consequences to the employee or service provider who is party to such agreement without increasing the cost to the Company or any of its Subsidiaries);
(xiv) without limiting Section 6.17(a) hereof, neither the Company nor any of its Subsidiaries shall settle or offer to settle any Action on terms which would be reasonably likely to have a Company Material Adverse Effect; and
(xv) neither the Company nor any of its Subsidiaries shall authorize or enter into any agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that from and after the date of this Agreement and prior to the Effective Time the business of Parent and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, Parent and its Subsidiaries shall use their commercially reasonable efforts to preserve their respective business organizations intact and to maintain their existing relations and goodwill with customers, suppliers, regulators, distributors, creditors, lessors, employees and business associates (unless the Company shall otherwise approve in writing (which approval will not be unreasonably withheld or delayed)), except as otherwise expressly contemplated by this Agreement or disclosed in Section 6.1(b) of the Parent Disclosure Letter, except as required by applicable Law and except that this sentence shall not prohibit actions or omissions that would be prohibited by clauses (i) through (vii) of the following sentence but are not so prohibited because they are within the applicable exceptions and permissions of such transaction that wouldclauses or are approved by the Company in writing as provided therein. In addition, Parent covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing (which approval will not be unreasonably withheld or delayed)), except as otherwise expressly contemplated by this Agreement or disclosed in Section 6.1(b) of the Parent Disclosure Letter and except as required by applicable Law:
(i) Parent shall not (A) amend its articles of incorporation or bylaws in any manner adverse to the Company or its shareholders; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock, or pay any dividend or distribution thereon in Parent stock, unless appropriate adjustment is made to the Merger Consideration pursuant to Section 4.5; or (C) declare, set aside or pay any dividend or distribution payable in cash or property in respect of any capital stock other than regular quarterly cash dividends on the Parent Common Stock or in connection with any stock repurchase program or plan approved by Parent’s board of directors (provided that repurchases prior to the Effective Time under such programs and plans on a daily basis shall not exceed in the aggregate 25% of the average daily trading volume of Parent’s shares (such daily limitation on repurchases to be calculated in accordance with and in the manner of calculation of the daily volume limits applicable under Rule 10b-18 under the Exchange Act));
(ii) neither Parent nor any of its Subsidiaries shall merge or consolidate with any other Person except for any such transactions among wholly-owned Subsidiaries of Parent (or Parent and its wholly-owned Subsidiaries) and except for acquisition transactions consummated via subsidiary merger, and except that Parent may merge or consolidate with another Person subject to (A) compliance with Section 6.1(b)(iii) and (B) the condition that if consummation of such merger or consolidation would require the approval of the shareholders of Parent and if the record date for such approval is prior to the Effective Time, Parent shall, prior to the completion of such merger or consolidation and in addition to any other approval requirements of applicable Law, have obtained the approval of any such merger or consolidation by a vote of the majority of the votes cast for or against such merger or consolidation by shares of Parent Common Stock and Company Shares, with each Company Share having a number of votes equal to the Exchange Ratio for purposes of this vote, nor shall Parent adopt a plan of liquidation or dissolution;
(iii) neither Parent nor any of its Subsidiaries shall merge, consolidate or acquire any stock or assets or a license therefor if consummation of such merger, consolidation or acquisition would reasonably be expected to, likely to prevent, impair or materially delay or materially impair the consummation ability of Parent to consummate the TransactionsMerger by the Termination Date;
(xiv) neither Parent nor any of its Subsidiaries shall take any action that would prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;
(v) neither Parent nor any of its Subsidiaries shall incur any Indebtedness, or issue or sell any debt securities or warrants or other than capital expenditures rights to acquire any debt security of Parent or any of its Subsidiaries, except for (A) Indebtedness not in excess of $1,500,000,000 in the aggregate for Parent and its Subsidiaries; (B) Indebtedness for borrowed money in replacement of existing Indebtedness for borrowed money which has matured or is being refunded, so long as such replacement Indebtedness is on customary commercial terms and does not increase the principal amount of the existing Indebtedness which it replaces, (C) Indebtedness between the Company and its wholly owned Subsidiaries made in accordance the ordinary course of business consistent with past practices; or (D) Indebtedness incurred to fund performance of Contracts identified in Section 5.01(b)(v5.2(j)(i) and other than purchases and licenses of film and television and production programming the Parent Disclosure Letter; or (includinE) guarantees by Paren
Appears in 1 contract
Sources: Merger Agreement (Talx Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned)), and except as (1) otherwise expressly contemplated or expressly permitted by this Agreement or as required by applicable Law, the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary course of business and, to the extent consistent with the foregoing, the Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations substantially intact, maintain satisfactory relationships with Governmental Entities, customers and suppliers having significant business dealings with them and keep available the services of their key employees; provided that any action specifically permitted by clauses (2i)-(xix) expressly 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 the Transaction Documents (including in connection with the Separation and the Distribution applicable Law or as contemplated by the Final Step Plan) any Governmental Entity or (3z) otherwise expressly disclosed as set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable other applicable governing documents;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company;
(iii) 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 the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries 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 amendments to (A) in respect of Company Options, RSUs and PSUs outstanding as of the governing documents date of any this Agreement in accordance with their terms or (B) the issuance of shares by a wholly owned Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of to the Company which remains a or another wholly owned Subsidiary after consummation of such transactionthe Company);
(v) make any loans, advances or capital contributions to or investments in any Person (Cother than the Company or any direct or indirect wholly owned United States Subsidiary of the Company;
(vi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1A) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another the Company or to any other direct or indirect wholly owned Subsidiary of the Company 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 to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(vii) except for transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant the retention or acquisition of any Shares tendered by current or former employees or directors in order to pay the forfeiture of, exercise price of any Company Options or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and connection with the terms exercise or vesting of the Company Stock Plans as in effect on the date Options, RSUs or PSUs);
(viii) incur any indebtedness for borrowed money or guarantee such indebtedness of this Agreement another Person (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other than a wholly owned Subsidiary of the Company), 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;
(iiix) merge make any material changes with respect to financial accounting policies or consolidate 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) 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 insurance or indemnification or (B) with respect to any non-monetary terms and conditions therein, imposes or requires actions that would have a material effect on the continuing operations of the Company or its Subsidiaries;
(xi) (A) make or change any material Tax election; (B) settle, consent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund; (C) consent to any extension or waiver of any limitation period with respect 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;
(xii) 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 or its Subsidiaries, including capital stock of any of its Subsidiaries, other Personthan Permitted Liens or (A) transactions solely among the Company and/or its wholly owned Subsidiaries that would not result in a material increase in the Tax liability of the Company and its Subsidiaries, (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 restructure, reorganize or completely or partially liquidate other dispositions of assets (other than transactions pursuant to clause (B)) with a fair market value not in excess of $1,000,000 individually or $5,000,000 in the aggregate or (D) pursuant to Contracts in effect as of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations date of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)Agreement;
(iiixiii) except (A) other than as expressly required by pursuant to the terms of any Company Benefit Plan as in effect on the date hereof: (A) establish, adopt, amend as required by applicable Law or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider for employees of 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 of its Subsidiariesagreement providing compensation or benefits to any Service Provider, except for amendments that do not materially increase compensation or benefits, (C2) enter into, adopt, amend, modify or terminate any compensation or benefit plans (other 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 compensation, 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 pension, welfare or other benefits of any director, officer or employee of job change (to the Company or any of its Subsidiaries, except extent that such increases are in the ordinary course of business and consistent with past practice with respect practice) 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) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to discretionarily accelerate the vesting or payment of compensation any cash or benefits 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 Company Plan Benefit Plan; (including any equity-based awards), (F4) change any actuarial or other assumptions used to calculate funding or contribution obligations with 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 Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directorsService Provider, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than routine advances for business expenses in the ordinary course of business consistent 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);
(xiv) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated with past practice 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 a principal amount respect of the Shares, RSUs and PSUs pursuant to Section 6.1(a)(vi) by the Company or its Subsidiaries;
(xvi) except as required by applicable Law or GAAP, (A) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (B) make any material change in any of its accounting principles or practices;
(xvii) (A) incur or commit to incur any capital expenditures other than (1) capital expenditures not to exceed $400,000,000 35,000,000 in the aggregate at during any time outstanding on prevailing market terms six month period from July 1, 2015 to Closing; or on terms substantially consistent with or more beneficial (2) pursuant to obligations imposed by Material Contracts, in the case of this clause (2), to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing extent that such Indebtedness, capital expenditures do not exceed $5,000,000 individually; (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, enter into, modify, amend or terminate any Material Contract; (C) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (D) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (E) commercial paper issued effectuate a “plant closing,” “mass layoff” (each as defined in WARN) or other employee layoff event affecting in whole or in part any site of employment, facility, operating unit or 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 ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all business; or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings waive or replacements thereof and of commitments thereunder, and release any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, material claim other than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practicebusiness;
(vxviii) with respect to the Retained Businesspropose or adopt a plan of complete or partial liquidation, other than with respect to acquisitions of businessesdissolution, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property restructuring, recapitalization or assetsother reorganization; or
(xix) agree, licenses authorize or otherwise (valuing commit to do any non-cash consideration at its fair market value as of the date 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 the agreement for such acquisition); provided that neither Parent and the Company nor any shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinits Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation its business and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each business of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practiceOrdinary Course and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations substantially intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ respective present officers, employees and agents, except as otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law, provided that no action by the Company with respect to matters permitted by any provision of clauses (i)-(xxii) of Section 7.1(b) below shall be deemed a breach of the obligations under this sentence unless such action would constitute a breach of such other provision.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise expressly (unless Parent shall otherwise approve A) contemplated by this Agreement, (B) required by a Governmental Entity or applicable Law, (C) approved in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Parent or (3D) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except adopt or propose any change in (x) the Company’s Organizational Documents or (y) any Subsidiary’s Organizational Documents;
(ii) merge or consolidate itself or any of its Subsidiaries with respect to SpinCo and the SpinCo Subsidiaries (any other than in the case of clause (A))Person, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a transactions among its wholly owned subsidiary Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets from any other Person with a fair market value or purchase price in excess of $12.5 million in the aggregate, other than acquisitions pursuant to Material Contracts in effect as of the Company which remains a date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or of any of its Subsidiaries (other the issuance of shares (A) by its wholly owned Subsidiary after consummation to it or another of its wholly owned Subsidiaries or (B) in respect of outstanding Company Equity Awards in accordance with their terms and, as applicable, the Stock Plans), any Company Equity Award, or securities convertible or exchangeable into or exercisable for any shares of such transaction)capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(Cv) create or incur any Encumbrance (other than a Permitted Encumbrance) that is material to the Company on any of its or its Subsidiaries’ assets, rights or properties;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its wholly owned Subsidiaries) in excess of $5 million in the aggregate;
(vii) make any loans or advances to, guarantees for the benefit of, or entered into any other material transaction with any Company Employee or Affiliates other than advances for business, travel-related, relocation or other similar expenses in accordance with currently existing Company policy;
(viii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(ix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, or (E) purchaseoffer to redeem, repurchase, redeem repurchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toshares of Company Common Stock to satisfy withholding Tax obligations upon the exercise, vesting or settlement of outstanding Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case Equity Awards in accordance with past practice and their terms and, as applicable, the Stock Plans, or in connection with “net exercise” of outstanding Company Options in accordance with their terms and, as applicable, the terms Stock Plans;
(x) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) Indebtedness for borrowed money incurred for working capital purposes or otherwise incurred in the Ordinary Course under the Company’s revolving credit facility, (B) Indebtedness for borrowed money not to exceed $10 million in the aggregate, (C) guarantees of Indebtedness of its wholly owned Subsidiaries otherwise incurred in compliance with this Section 7.1; or (D) Indebtedness under the Company’s revolving credit facility or any other credit facility of the Company Stock Plans or any of its Subsidiaries as in effect on as of the date of this Agreement (or as modified after to the date extent incurred to fund any other action expressly permitted under the other paragraphs of this Section 7.1(b);
(xi) except as set forth in the Company’s capital budget set forth in Section 7.1(b)(xi) of the Company Disclosure Letter, make or authorize any capital expenditures in excess of $5 million in the aggregate during any fiscal quarter (it being understood that any portion of the capital expenditures budget for any fiscal quarter and such $5 million in excess thereof not expended in such fiscal quarter, beginning with the first quarter of the 2018 fiscal year, may be carried forward and, together with any amount otherwise permissible pursuant to this paragraph (x), expended in any future fiscal quarter);
(xii) other than in the Ordinary Course, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or amend, modify, supplement, waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract, other than (A) expirations of any such Contract in the Ordinary Course in accordance with the terms of this Agreement) such Contract, or (2B) purchasesnon-exclusive licenses, repurchasescovenants not to ▇▇▇, redemptions releases, waivers or other acquisitions of securities of any wholly rights under Intellectual Property Rights owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of its Subsidiaries, in each case, granted in the Company)Ordinary Course;
(iixiii) merge settle or consolidate with compromise any other PersonProceedings for an amount in excess of $3 million individually or $6 million in the aggregate, net of applicable insurance payments, recoveries or proceeds, or restructure, reorganize on a basis that would (A) prevent or completely or partially liquidate (other than transactions materially delay consummation of the type contemplated by Section 5.01(b)(viiMerger or the Transactions, or (B) result in the imposition of any term or Section 5.01(b)(ix) which are not restricted thereby and other than mergers condition that would materially restrict the future activity or consolidations of a Subsidiary conduct of the Company or its Subsidiaries or a finding or admission of a criminal violation of Law;
(xiv) make any changes with respect to accounting policies or procedures, except as required by GAAP;
(xv) except in which such Subsidiary is the surviving entity Ordinary Course, (A) make, change or revoke any material Tax election, (B) adopt or change any material Tax accounting method, (C) file any amended Tax return with respect to any material Tax, (D) enter into any closing agreement with respect to any material Taxes, (E) settle any material Tax claim, audit, assessment or dispute, (F) surrender any right to claim a refund of a material amount of Taxes or (G) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment;
(xvi) transfer, sell, lease, license, divest, cancel, mortgage, pledge, surrender, encumber, abandon or allow to lapse or expire or otherwise dispose of any assets (tangible or intangible), rights, properties, product lines or businesses, in connection whole or in part, material to it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except for (A) sales of obsolete assets, (B) sales, leases or other dispositions of assets (not including services) with an acquisition a Fair Value not otherwise prohibited by in excess of $15 million in the aggregate other than pursuant to Material Contracts in effect prior to the date of this Agreement and other than mergers among, or (C) non-exclusive licenses entered into in the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)Ordinary Course;
(iiixvii) except as expressly required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any Company Plan as Employee, except, in effect the case of Company Employees who are not Executive Officers, in the Ordinary Course, (B) increase the compensation or benefits payable to any Company Employee, except for (1) in the case of Company Employees who are not Executive Officers and whose annual base compensation is less than $225,000, increases in the Ordinary Course and (2) the payment of bonuses in the Ordinary Course for completed periods based on the date hereof: actual performance, (AC) establish, adopt, amend or terminate any material Company Benefit Plan or amend the terms of any outstanding equity-based awards other than any such action taken except for purposes of replacing, renewing or extending a broadly applicable material amendments to Company Plan Benefit Plans made in the ordinary course of business consistent with past practice Ordinary Course that does do not materially increase the cost expense of maintaining such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeplan, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan Benefit Plan, other than to the extent not required by such Company Benefit Plan, (including E) grant any equity-based new awards, or amend or modify the terms of any outstanding awards (including, without limitation, any Company Equity Awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (G) forgive any loans or issue any loans to directors, officers or employees of the Company or any of its Subsidiaries;
Subsidiaries (iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, for loans made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% $100,000 individually or $500,000 in the aggregate), (H) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of $200,000 (other than employees hired to fill open positions existing as of the amounts reflected date of this Agreement or to replace employees whose employment has terminated following the date of this Agreement (provided that if at the time of hiring the overall net increase in employee headcount from the Company’s capital expenditure budget date hereof does not exceed 50, no consent of Parent shall be required to hire employees to fill open positions existing as of the date of this Agreement or to replace employees whose employment has terminated following the date of this Agreement) or (I) terminate the employment of any Executive Officer other than for each cause or permanent disability;
(xviii) recognize any union, works council or other labor organization as the representative of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) any of the employees of the Company Disclosure Letter;
(vi) with respect to or any of the Retained BusinessSubsidiaries, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of enter into any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensesCompany Labor Agreement, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreementsexcept as required by applicable Law;
(viixix) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon implement or otherwise dispose of announce any properties employee layoffs or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any yearlocation closings, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise other than in the Ordinary Course;
(valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall xx) enter into any such transaction Contract which contains a change in control or similar provision that would, or would reasonably be expected to, prevent, materially delay or materially impair triggered in connection with the consummation of the TransactionsMerger;
(xxxi) other than capital expenditures made in accordance the Ordinary Course, amend or modify in any material respect, or extent, renew or terminate any lease, sublease, license or other agreement for the use or occupancy of any real property, or enter into any new lease, sublease, license or other agreement for the use or occupancy of any real property; or
(xxii) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time. Prior to the Effective Time, each of the Company and Parent shall exercise, consistent with Section 5.01(b)(v) the other terms and other than purchases conditions of this Agreement, complete control and licenses of film and television and production programming (includinsupervision over their respective businesses.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Law or as contemplated expressly provided by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoingthis Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time Acceptance Time, the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary and usual course and it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the material components of their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, clients, suppliers, licensees, licensors, partners, creditors and lessors, key employees and independent contractors, material service providers, agents and business associates and other Persons with which it or any of its Subsidiaries has significant business relations and keep available the services of its and its Subsidiaries’ present officers and key employees and independent contractors; provided, however, that the Company and its Subsidiaries shall be under no obligation to and shall not, without Parent’s prior written consent, put in place any new retention programs or include additional personnel in any existing retention programs. Without limiting the generality of the immediately preceding sentence, from the date of this Agreement until the Acceptance Time, except (unless A) as otherwise expressly required by this Agreement, (B) with the prior written consent of Parent shall otherwise approve in writing, (which approval consent shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed in as set forth on Section 5.01(b6.1(a) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect adopt or propose any change or amendment (whether by merger, consolidation or otherwise) to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws or other similar governing documents of the Company and its Subsidiaries;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among wholly owned Subsidiaries of the Company not in violation of any instrument binding on the Company or any of its Subsidiaries and that would not reasonably be expected to result in a material increase in the net Tax liability of the Company and its Subsidiaries, taken as a whole;
(iii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any (A) shares of capital stock of the Company or any of its Subsidiaries (other than amendments to (1) the governing documents issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of any shares by a wholly owned Subsidiary of the Company that would not preventto the Company or another wholly owned Subsidiary or (2) the issuance or transfer of Shares pursuant to awards outstanding as of the date of this Agreement under, delay or impair and as required by the Initial Merger or terms of the other TransactionsStock Plans as in effect as of the date of this Agreement), (B) splitsecurities convertible into or exercisable, combine, subdivide exchangeable or reclassify its outstanding redeemable for any shares of such capital stock, any options, warrants or other rights of any kind to acquire any shares of such capital stock (except for any or such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)convertible, exercisable, exchangeable or redeemable securities, or (C) any Voting Debt;
(iv) declare, authorize, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by any Subsidiary of the Company to the Company or to a direct or indirect wholly owned Subsidiary of the Company to another direct Company) or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement Contract with respect to the voting of its capital stock;
(v) adjust, reclassify, split, combine or (E) purchasesubdivide, repurchaseredeem, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(vi) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), except for the capital expenditures contemplated by (ix) below, in each case, other than (A) acquisitions of supplies, equipment, inventory, third party Software and capital in the ordinary course of business consistent with past practice (it being understood and agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business consistent with past practice), or (B) acquisitions with a value or purchase price (including the value of assumed liabilities) not in excess of $100,000 in any transaction or related series of transactions or $400,000 in the aggregate;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other direct or indirect wholly owned Subsidiary of the Company) except for such advances incurred in the ordinary course of business consistent with past practice not to exceed $500,000 in the aggregate;
(viii) incur, alter, amend or modify any indebtedness or guarantee indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for the incurrence of indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $25,000 in the aggregate;
(ix) make or authorize any capital expenditures;
(x) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable GAAP;
(xi) subject to Section 6.10, release, assign, compromise, discharge, waive, settle or satisfy any Action (including any Action relating to this Agreement, the Offer or the Merger) or other rights, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) other than releases, assignments, compromises, discharges, waivers, settlements or satisfactions where the payments not covered by insurance do not exceed $850,000 in the aggregate or providing for any relief other than monetary relief (except for confidentiality, non-disparagement, releases, agreements not to ▇▇▇ and other similar provisions in a settlement agreement);
(iixii) merge (A) amend or consolidate with modify, in any other Personmaterial respect, or restructureterminate any Material Contract, reorganize material lease for Leased Real Property or completely material Company Permit, (B) waive, release or partially liquidate assign any material rights or material claims under any Material Contract or (C) except in the ordinary course of business consistent with past practice enter into any Contract that would have been a Material Contract had it been entered into prior to the execution of this Agreement;
(xiii) make any Tax election, materially amend any Tax Return, settle or finally resolve any controversy or change any method of Tax accounting;
(xiv) (A) grant to any third Person any license, sublicense, covenant not to ▇▇▇, immunity, authorization, release or other right with respect to any material Intellectual Property; (B) assign or transfer to any third Person any material Intellectual Property; or (C) abandon any material Company Registered Intellectual Property Rights, in each case except as in the ordinary course of business consistent with past practice;
(xv) terminate any executive officers or hire any new employees unless such hiring is in the ordinary course of business consistent with past practice;
(xvi) adopt, enter into, amend, terminate or extend any Collective Bargaining Agreement;
(xvii) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any director, officer or, other than transactions in the ordinary course of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which business consistent with past practice, employees (who are not restricted thereby and other than mergers or consolidations of a Subsidiary officers) of the Company in which such Subsidiary is or any of its Subsidiaries, (B) increase the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and compensation, bonus or pension, welfare, severance, change-in-control or other benefits of, pay any bonus to, any director, officer or, other than mergers amongin the ordinary course of business consistent with past practice, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries non-officer employee of the Company that would or any of its Subsidiaries other than, in the case of non-officer employees, base salary increases or bonuses awarded in the ordinary course of business consistent with past practice (which bonuses shall not preventexceed $10,000 in the aggregate), materially delay (C) make any new equity-based awards to any director, officer or materially impair non-officer employee of the Transactions);
Company or any of its Subsidiaries, (iii) except as expressly required by any Company Plan as in effect on the date hereof: (AD) establish, adopt, enter into amend or terminate any material Company Benefit Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiariesawards, (E) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Company Benefit Plan, (F) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP, or (G) forgive any loans to directors, officers or key employees of the Company or any of its Subsidiaries;
(ivxviii) incur reclassify any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken independent contractor as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations an employee of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of unless the Company Disclosure Letter; providedreasonably believes that such a change is advisable in order to comply with applicable law;
(xix) fail to use commercially reasonable efforts to renew or maintain the Insurance Policies or comparable replacement policies, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(vxx) with respect to the Retained Business, other than with respect to acquisitions enter into any new line of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letterbusiness;
(vixxi) with respect to the Retained Businessadopt, transferenter into or effect any plan of complete or partial liquidation, leasedissolution, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon reorganization or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreementsrestructuring;
(viixxii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of take any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction action that would, or would be reasonably be expected likely to, individually or in the aggregate, prevent, materially delay or materially impair impede the consummation of the Transactions;Offer, the Merger or the other transactions contemplated by this Agreement; or
(xxxiii) other than capital expenditures made agree, authorize, propose, commit or announce an intention to do any of the foregoing.
(b) Nothing contained in accordance Section 6.1(a) shall give to Parent or Acquisition Sub, directly or indirectly, rights to control or direct the Company’s operations prior to the Acceptance Time in violation of applicable Law. Prior to the Acceptance Time, the Company shall exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions hereof, complete control and licenses supervision of film its operations and television and production programming (includinshall not be required to obtain consent of Parent if it reasonably believes that doing so would violate applicable Law.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after After the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingTime, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1w) required by applicable LawLaw or by a Governmental Entity, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3x) otherwise expressly disclosed contemplated by this Agreement, (y) otherwise set forth in Section 5.01(a6.1(a) of the Company Disclosure LetterLetter or (z) Parent shall approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct cause the Retained Business business of it and its Subsidiaries to be conducted in the ordinary course of and, to the extent consistent therewith, it shall use reasonable best efforts to preserve its business consistent with past practice, organization and the Company shall, and shall cause each that of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve in writingTime, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1A) required by applicable LawLaw or by a Governmental Entity, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3B) otherwise expressly disclosed contemplated by this Agreement, (C) as set forth in Section 5.01(b6.1(a) of the Company Disclosure LetterLetter or (D) Parent shall approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), the Company shall will not and shall not permit any of will cause its Subsidiaries not to:
(i) except adopt any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate with respect to SpinCo and any other Person or restructure, reorganize or completely or partially liquidate the SpinCo Subsidiaries Company or any of its Subsidiaries;
(iii) acquire (including by merger, consolidation or acquisition of equity interests or assets or any other than business combination) (A) any corporation, partnership, other business organization or division thereof or (B) any assets outside of the ordinary course of business from any other Person in any transaction or series of related transactions (in the case of clause (A)B), for consideration in excess of $5 million in the aggregate);
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, (x) any shares of capital stock or other equity interests of the Company or any its Subsidiaries (other than (A) amend its certificate the issuance of incorporation Shares upon the exercise of Company Options outstanding on the date hereof or bylaws the vesting of Company Restricted Stock (and dividend equivalents thereon, if applicable) outstanding on the date hereof, or comparable governing documents(B) (other than amendments to the governing documents issuance of any shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (By) split, combine, subdivide securities convertible or reclassify its outstanding shares of capital stock (except exchangeable into or exercisable for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its such capital stock or other equity interests, or (except for (1z) any dividends options, warrants or distributions paid by a other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) make any loans, advances or capital contributions to or investments in any Person (other than among the Company and any direct or indirect wholly owned Subsidiary of the Company Company) in excess of $1,000,000 in the aggregate;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to any other direct or indirect wholly owned Subsidiary and except for quarterly dividends paid by the Company to holders of Shares consistent with past practice and not in excess of $0.05 per Share) or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(vii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant the acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the forfeiture of, exercise of Company Options or withholding the vesting of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms Stock);
(viii) add an employer stock investment option to any Benefit Plan intended to be qualified under Section 401(a) of the Company Stock Plans as Code or permit any participant in effect on any such Benefit Plan to direct the date investment of this Agreement his or her plan account in employer securities within the meaning of Section 407(d) of ERISA;
(ix) incur, assume or as modified after the date otherwise become liable for any Indebtedness for borrowed money or guarantee such Indebtedness of this Agreement in accordance with the terms another Person (other than of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except for Indebtedness pursuant to the Second Amended and Restated Credit Agreement, dated August 4, 2011 borrowed in the ordinary course of business consistent with past practice and in a net amount not to exceed $40 million (including letters of credit pursuant thereto);
(x) make any capital expenditures in excess of $1,000,000 in the aggregate, except as included as a line item in the Company’s 2013 capital budget, with respect to the 2013 fiscal year, or in the 2014 capital budget, with respect to the 2014 fiscal year (1true and correct copies of which have been made available to Parent) employees below and except for expenditures related to operational emergencies solely to the level extent necessary to restore and resume ordinary course operations and functions disrupted as a result of Executive Vice President and such operational emergency;
(2xi) employees at make any material changes with respect to accounting policies or above procedures, except as required by changes in GAAP, or the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationinterpretation thereof, bonus or pensionby a Governmental Entity;
(xii) settle, welfare release, waive or other benefits prior to such changecompromise any claim or obligation (whether absolute, (Daccrued, contingent or otherwise) increase the severance or termination payments any pending or benefits payable to any director, officer, employee threatened Action by or other service provider of before a Governmental Entity against the Company or any of its Subsidiaries, except for any such claim, obligation or Action that would not result in liability for the Company or any of its Subsidiaries in an amount in excess of $500,000 individually or $1 million in the aggregate (E) take any action to accelerate the vesting or in each case, net of applicable insurance proceeds after payment of compensation deductibles) and that does not otherwise impose any material obligations or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial restrictions on the business or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees operations of the Company or any of its Subsidiaries;
(ivxiii) incur other than to the extent required by Law, make or change any Indebtedness material Tax election;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or issue allow to lapse or expire or otherwise dispose of any warrants material amount of assets, product lines or businesses of the Company, including capital stock of any of its Subsidiaries, other rights than inventory, supplies and other assets (including with respect to acquire Intellectual Property, which shall be governed solely under Section 6.1(a)(xvii)) in the ordinary course of business or pursuant to Contracts in effect prior to the date of this Agreement (true and correct copies of which, subject to redactions, have been provided to Parent);
(xv) except as required pursuant to the terms of any IndebtednessBenefit Plan set forth on Section 5.1(h)(i) of the Company Disclosure Letter, except (A) grant or provide any severance or termination payments or benefits to any employee, director or other individual service provider, (B) grant any new equity-based awards (including any phantom stock award) to any employee or accelerate the vesting of any award under the Stock Plan, (C) materially increase the compensation of any employee, director or other individual service provider, other than routine salary increases for non-officer employees in the ordinary course of business consistent with past practice (with respect to both timing and amount), (D) establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or except to the extent that such amendment would not result in more than a principal amount not de minimis increase to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial cost to the Company and its Subsidiariesunder such arrangement or plan) or (E) hire any employee, taken as a whole, than existing Indebtednessdirector or other individual service provider with an annual base salary in excess of $175,000, and with a maturity date no more than 10 years after the date of the on terms that do not provide for any payments or benefits upon termination;
(xvi) (A) terminate or materially amend or modify any Material Contract evidencing such Indebtednessor any Lease (other than, (B) except with respect to Leases, extensions at the Bridge Facilityend of a term or on overall terms no less favorable than the terms of the existing Material Contract and for a term no longer than the existing term of such Material Contract and in no event longer than one year) or enter into a Contract that, if in replacement effect on the date of this Agreement, would have been a Material Contract or (B) enter into any Contract that contains a change of control or similar provision that would require a payment to any Person counterparty thereto in connection with the consummation of the Offer, the Merger and/or the other transactions contemplated in this Agreement that would not otherwise be due;
(xvii) sell, transfer, assign, abandon or otherwise dispose of, or to refinancegrant any license or sublicense with respect to, existing Indebtedness on then prevailing market terms any Company Intellectual Property (other than any license granted or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into abandonment in the ordinary course of business consistent with past practice, );
(Exviii) commercial paper issued implement any facility closings or reductions in force not in compliance with the WARN Act;
(xix) fail to maintain in full force and effect any Insurance Policy material to the operations of the business of the Company and its Subsidiaries taken as a whole;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable or participate in any activity that would reasonably be expected to result in a temporary increase in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in demand for the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of products offered by the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement other than in the ordinary course of business consistent with past practice business); or
(xxi) agree, authorize or in connection with a Sky Acquisition and not for speculative purposes; provided that commit to do any of the foregoing.
(b) Neither Parent, Merger Sub nor the Company shall consult with Parent prior take or permit any of their Affiliates to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at take any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which action that is not covered by insurance is less than $100,000,000) reasonably likely to prevent or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;Offer, the Merger or the other transactions contemplated by this Agreement.
(xc) other than capital expenditures made Nothing contained in accordance this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and 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 Section 5.01(b)(v) the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use from and after the execution and delivery of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (such approval not to be unreasonably conditioned, withheld or delayed)), and except as otherwise contemplated by this Agreement or as is required by a Governmental Entity or applicable Law, comply in all material respects with all applicable Laws and the requirements of all Material Contracts, conduct its reasonable best efforts to conduct the Retained Business business in all material respects in the ordinary course Ordinary Course of business consistent with past practiceBusiness and, in connection therewith, shall use and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable efforts to preserve the Retained Businessits and its Subsidiaries’ organization intact business organizations substantially intact, maintain its and maintain the Retained Businessits Subsidiaries’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorsconsultants, licensors, licensees, creditors, lessors, employees and business associates and others having material significant business dealings with the Retained Business (including material content providersthem, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of its and its Subsidiaries’ key present employees and agents, preserve and maintain the assets utilized in connection with the business of the Company and its Subsidiaries’ present employees , maintain in effect all Governmental Authorizations and agents.
keep in full force and effect all material Insurance Policies maintained by the Company and its Subsidiaries; provided, however, that no action taken or failed to be taken by the Company or any of its Subsidiaries with respect to the matters specifically addressed by clauses (bi) through (xxix) of this Section 7.1(a) shall be deemed a breach of this Section 7.1(a) unless such action would constitute a breach of such clauses (i) through (xxix). Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatforegoing sentence, from the execution and after the date delivery of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve in writingTime, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) otherwise contemplated by this Agreement, required by a Governmental Entity or applicable Law, approved in writing by Parent (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distributionsuch approval not to be unreasonably conditioned, withheld or delayed) or (3) otherwise expressly disclosed set forth in Section 5.01(b7.1(a) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate the Company 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 or file a petition in bankruptcy under any provisions of federal or state bankruptcy Law on behalf of the Company or any of its Subsidiaries (or consent to any such filing);
(iii) acquire any Person or any assets constituting a business unit or division, whether directly or indirectly and by any manner, from any other Person, or otherwise make any capital expenditure or expenditures (other than capital expenditures contemplated by the most recent annual budget of the Company and its Subsidiaries, a copy of which has been made available as of the date hereof), in each case with a fair market value (reasonably determined by the Company) or purchase price in excess of $7.5 million in any individual transaction or series of related transactions or $15 million in the aggregate, and except as covered by the foregoing acquire any other assets outside the Ordinary Course of Business;
(iv) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of capital stock, Company RSUs or other equity interests of the Company (including, for the avoidance of doubt, Shares) or of any of its Subsidiaries (other than in the case of clause (A)), (A) amend its certificate the Voting Agreement or (B) the issuance of incorporation or bylaws such shares of capital stock (or comparable governing documents1) (other than amendments to the governing documents of any by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company RSUs outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the terms of the Stock Plans in effect on the date of this Agreement or (3) in respect of Company RSUs granted in August 2018 on terms and conditions as set forth on Section 7.1(a)(iv)) of the Company Disclosure Letter, 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;
(v) create or incur any Encumbrance (other than Permitted Encumbrances) material to the Company and its Subsidiaries (taken as a whole) on any of the assets of the Company or any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to, or investments in, any Person, except (i) to or from the Company and any of its Wholly Owned Subsidiaries and (ii) for loans or advances made to directors, officers and other employees of the Company and its Subsidiaries for purposes other than business-related travel and other business-related expenses in excess of $2 million in the aggregate, in each case, in the Ordinary Course of Business; and provided that would not preventin no event shall the payment terms of any Contract involving a customer of the Company or its Subsidiaries constitute a loan or advance for purposes of this Section 7.1(a)(vi);
(vii) declare, delay set aside, establish a record date for, accrue, make or impair pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (including with respect to the Initial Merger or Company, for the other Transactionsavoidance of doubt, Shares), except for dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company;
(Bviii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire (or offer to do any shares of the foregoing), directly or indirectly, any of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares) or otherwise change the capital structure of the Company or any of its Subsidiaries, other than (1) pursuant to withholding Tax obligations upon the forfeiture ofexercise, vesting or withholding settlement of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case RSUs outstanding as of the date of this Agreement in accordance with past practice and with their terms and, as applicable, the terms of the Company Stock Plans as in effect on the date of this Agreement;
(ix) incur or assume any Indebtedness for borrowed money or otherwise, guarantee any Indebtedness or enter into a “keep well” or similar agreement (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) Indebtedness for borrowed money incurred in the Ordinary Course of Business not to exceed $7.5 million individually or $15 million in the aggregate or expressly permitted by Section 7.1(a)(v) or to fund expenditures expressly permitted by Section 7.1(a)(iii), or (B) Indebtedness of up to $1 million incurred under the Company’s current revolving credit facility or (C) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced; provided, that any Indebtedness that is extinguished in full prior to the Closing (for the avoidance of doubt, not including the Credit Agreement Payoff Amount) shall not be deemed to be a breach of this provision;
(x) enter into any Contract that would have been a Company Material Contract had it been entered into prior to this Agreement, other than Contracts with customers or suppliers entered into in the Ordinary Course of Business and, for the avoidance of doubt, any Contracts entered into in connection with an action expressly permitted by any of the Subsections of this Section 7.1(a), including any amendment, modification or supplement to an existing Contract, which are governed by Section 7.1(a)(xi);
(xi) other than with respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(ix) and Section 7.12, terminate or materially amend, modify, supplement or waive in a manner that is materially adverse to the Company and its Subsidiaries (taken as a whole), any Company Material Contract, other than expirations of any such Contract in the Ordinary Course of Business or in accordance with the terms of such Contract, except for any ministerial actions, releases or waivers, in each case, granted in the Ordinary Course of Business;
(xii) other than with respect to Transaction Litigation, which shall be governed by Section 7.15, pay, discharge, satisfy, settle or compromise any Proceeding (or agree to do any of the foregoing) for an amount in excess of $5 million individually or $10 million in the aggregate other than any payments in accordance with the terms of any liabilities, claims or obligations reflected or reserved against in the most recent consolidated financial statements of the Company included in the Company Reports; provided, that any such payment, discharge, satisfaction, settlement or compromise of any such Proceeding does not include any material obligation (other than the payment of money or confidentiality obligations) to be performed by the Company or any of its Subsidiaries;
(xiii) make any material changes with respect to accounting policies or procedures, except as modified required by changes in Law or GAAP;
(xiv) make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, surrender any right to claim a refund of a material amount of Taxes, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Taxes or settle any material Tax claim;
(xv) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Encumbrance (other than Permitted Encumbrances) upon, including pursuant to a sale-leaseback transaction or an asset securitization transaction, any tangible properties or tangible assets (not including any Intellectual Property Rights), including capital stock of any of its Subsidiaries, except in connection with services provided in the Ordinary Course of Business;
(xvi) sell, transfer, cancel, abandon, allow to lapse or otherwise dispose of any Company Owned Intellectual Property Rights that are material to the respective businesses of the Company and its Subsidiaries as currently conducted, except (A) in the Ordinary Course of Business, (B) lapse of Intellectual Property Rights that have reached their natural expiration time and can no longer be extended or renewed, or (C) transfers of Intellectual Property Rights developed after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned of its Subsidiaries (that are not material for the Company or such Subsidiary to retain) as part of the Company)their respective businesses on behalf of any customer;
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iiixvii) except as expressly required pursuant to a Company Benefit Plan or as otherwise required by any Company Plan as in effect on the date hereof: applicable Law (A) establishgrant, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction severance, retention, change in control or retention bonuses termination payments or benefits to any director, officer, employee or other service provider independent contractors of the Company or any of its Subsidiaries, (CB) increase the compensationcompensation or benefits of, pay any bonus to, or, except as permitted under Section 7.1(a)(iv), make any new equity or pensionequity-based awards to, welfare or other benefits of any director, officer officer, employee or employee independent contractor of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) other than annual salary or base pay increases for employees below the level of Executive Vice President Director in the Ordinary Course of Business, of not more than three percent (3%) of such salary or base pay (and (2) employees at or above the level of Executive Vice President corresponding increases in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pensionincentive payments to the extent determined by reference to salary or base pay), welfare (C) establish, adopt, amend or other terminate any Company Benefit Plan or any arrangement that would be a Company Benefit Plan if in effect as of the date hereof or amend the terms of any outstanding equity or equity-based awards, except in the Ordinary Course of Business, consistent with past practice and as would not increase benefits prior or costs with respect to such changeCompany Benefit Plans or arrangements by more than a de minimis amount, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Company Benefit Plan, (FE) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (GF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries or (G) pay or vest any performance based amount or award in excess of the level earned based on actual performance;
(xviii) 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;
(xix) form any Subsidiary of the Company or any of its Subsidiaries;
(ivxx) incur take any Indebtedness action to exempt any Person from, or issue make any warrants acquisition of securities of the Company by any Person not subject to, any state takeover statute or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms similar statute or on terms substantially consistent with or more beneficial regulation that applies to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except company with respect to the Bridge Facilityan Acquisition Proposal or otherwise, in replacement ofexcept for Parent, Merger Sub or to refinance, existing Indebtedness on then prevailing market terms any of their respective Subsidiaries or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinancedAffiliates, and in each case with a maturity date no more than 10 years after except for the date transactions contemplated by this Agreement;
(xxi) amend the term of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, any security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following for the Distributionavoidance of doubt, the Retained Subsidiaries, shall not have any obligations in respect thereofShares), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as whether by merger, consolidation or otherwise;
(xxii) enter into a new line of business or abandon or discontinue any existing line of business;
(xxiii) enter into any material transaction or Contract with any Person that would be required to be reported by the aggregate principal amount thereof does not exceed $2,500,000,000Company pursuant to Item 404 of Regulation S-K under the Securities Act;
(xxiv) except in the Ordinary Course of Business, (J) hedging in compliance with enter into or extend the hedging strategy term or scope of any Contract that purports to restrict or limit the Company or any existing or future Subsidiary or Affiliate of the Company from engaging in any line of business or in any geographic area;
(xxv) amend or modify the engagement letter in effect as of the date of this Agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. LLC;
(xxvi) take any action to increase the vote required for the Requisite Company Vote;
(xxvii) receive, collect, compile, use, store, process, share, safeguard, secure (technical, physical and administrative), dispose of, destroy, disclose, or transfer (including cross-border) Personal Information (or fail to do any of the foregoing, as applicable) in violation of any (i) applicable Privacy Laws, (ii) privacy policies or notices of the ordinary course Company or its Subsidiaries, or (iii) the Company’s or its Subsidiaries’ contractual obligations with respect to Personal Information;
(xxviii) take any action or fail to take any action that is reasonably expected to result in any of business consistent with past practice the conditions to the Merger set forth in ARTICLE VIII not being satisfied; or
(xxix) agree, authorize or in connection with a Sky Acquisition commit to do any of the foregoing.
(b) Parent and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) not knowingly take or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of permit any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned their respective Subsidiaries to the Company or to take any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction action that would, individually or would in the aggregate, reasonably be expected to, to prevent, materially delay or materially impair the consummation of the Transactions;transactions contemplated by this Agreement.
(xc) other than capital expenditures made Nothing set forth in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinthis 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 the Parent’s or its Subsidiaries’ operations prior
Appears in 1 contract
Sources: Merger Agreement (Syntel Inc)
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause each of its Subsidiaries thatto, from until the earlier of the Effective Time and after the execution termination of this Agreement and prior pursuant to the First Effective Time Article IX (unless (I) Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1II) expressly contemplated or required by this Agreement, applicable Law, (2III) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a7.1(a) of the Company Disclosure LetterSchedule or (IV) with respect to actions taken or omitted by, or at the specific direction of, any Specified Person taken at the direction of BK or with BK’s consent (the exceptions set forth in the foregoing clauses (I) – (IV), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below“Interim Covenant Exceptions”), use commercially reasonable efforts to preserve conduct its business in the Retained BusinessOrdinary Course of Business and, to the extent consistent therewith, shall use and cause each of its Subsidiaries to use their respective commercially reasonable efforts to (x) maintain, in all material respects, its and its Subsidiaries’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees employees, consultants, agents and business associates and others having (y) keep available, in all material business dealings with the Retained Business (including material content providersrespects, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the employees and consultants of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of and in furtherance ofof the foregoing sentence, at all times during the foregoing, period commencing with the Company covenants execution and agrees as to itself and its Subsidiaries that, from and after the date delivery of this Agreement and prior to continuing until the First earlier of the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) termination of the Company Disclosure Letter)this Agreement pursuant to Article IX, except pursuant to any Interim Covenant Exception, the Company shall not (and shall not permit any of cause its Subsidiaries not to:):
(i) except with respect to SpinCo and the SpinCo Subsidiaries (adopt any change in its Organizational Documents, other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than immaterial amendments to the governing applicable organizational documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)’s Wholly Owned Subsidiaries;
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than liquidate, in each case except for any such transactions solely among Wholly Owned Subsidiaries of the type contemplated Company;
(iii) acquire, directly or indirectly by Section 5.01(b)(viimerger, consolidation, acquisition of stock or assets or otherwise, any business, Person, properties (including real properties) or Section 5.01(b)(ix) which are not restricted thereby and assets from any other than mergers Person with a fair market value or consolidations purchase price in excess of a Subsidiary of $5 million in the Company aggregate, in which such Subsidiary is the surviving entity each case, including any amounts or value reasonably expected to be paid in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amonga future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not reasonably be expected to prevent, materially delay or materially impair the Transactions)ability of the Company or any of its Subsidiaries to consummate the transactions contemplated by this Agreement by the Outside Date, other than acquisitions of inventory or assets, goods or properties in the Ordinary Course of Business;
(iiiiv) except as expressly required by transfer, sell, convey, lease, sublease, license, pledge, mortgage, assign, divest, grant any Company Plan as in effect on option in, cancel or otherwise abandon or dispose of, or incur, permit or suffer to exist the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms creation of any outstanding equity-based awards Encumbrance (other than Permitted Encumbrances) upon, any such action taken for purposes of replacingproperties (including any Real Property) or assets (tangible or intangible, renewing but other than Intellectual Property which is addressed in Section 7.1(a)(xx)), product lines or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider businesses of the Company or any of its Subsidiaries, including capital stock or other equity interests of any of its Subsidiaries, except in connection with (A) sales of obsolete assets in the Ordinary Course of Business, (B) sales or other dispositions of franchises or dealer locations in the Ordinary Course of Business, (C) sales, leases, or other dispositions of assets (not including services) with a fair market value not in excess of $5 million in the aggregate in the Ordinary Course of Business and (D) sales of receivables in securitization or factoring transactions;
(v) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the Voting Agreement or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect on the Capitalization Time;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries) in excess of $2 million individually or $5 million in the aggregate, except for extensions of credit to customers in the Ordinary Course of Business;
(vii) declare, set aside, establish a record date for, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for dividends (A) paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company and (B) dividends payable to the holders of Series A Preferred Shares, payable in cash in an amount not to exceed $1.875 per Series A Preferred Share annually, in accordance with the terms of the Certificate of Designation;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to do any of the foregoing, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares);
(ix) incur, assume, repurchase or prepay or guarantee or endorse or otherwise become responsible for any Indebtedness for borrowed money (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) trade payables incurred in the Ordinary Course of Business, (B) pursuant to Existing Indebtedness (including borrowings under the ABL Credit Agreement), (C) any refinancing, extension, renewal or replacement of any outstanding Indebtedness of the Company, in the case of this clause (C), that does not increase the compensationprincipal amount of Indebtedness outstanding, bonus (D) the incurrence of Indebtedness for borrowed money in the Ordinary Course of Business not to exceed $5 million in the aggregate in the case of this subclause (D), or pension(E) the renewal and refinancing of any Insurance Policies;
(x) make or authorize any payment of, welfare or accrual or commitment for, capital expenditures, except to the extent set forth in the line items of the Company’s capital budget set forth in Section 7.1(a)(x) of the Company Disclosure Schedule;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than any Material Contract permitted by Section 7.1(a)(ix)(C) and in the Ordinary Course of Business;
(xii) terminate, fail to renew or amend or otherwise modify or waive or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in, any Material Contract, other than expirations or non-renewals of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company, any of its Subsidiaries or other benefits party to such Contract;
(xiii) cancel, modify or waive any debts or claims held by or owed to the Company or any of its Subsidiaries except as canceled, modified, or waived in the Ordinary Course of Business not to exceed $1 million individually or $2 million in the aggregate;
(xiv) amend any material License contemplated by Section 5.5(b)(i) in any material respect, or allow any such material License to lapse, expire or terminate (except where the lapse, expiration or termination of any directorsuch License is with respect to a License that has become obsolete, officer redundant or employee no longer required by applicable Law);
(xv) amend, modify, terminate, cancel or let lapse any Insurance Policy or fail to file any claims thereunder in a timely manner as required under such Insurance Policies;
(xvi) sell inventory outside of the Ordinary Course of Business or fail to order, maintain and manage levels of inventory consistent with the levels ordered, maintained and managed by the Company in the Ordinary Course of Business;
(xvii) settle, pay, discharge or compromise any Proceeding for an amount in excess of $2 million individually or $4 million in the aggregate during any calendar year or on a basis that would result in the imposition of any Order that would restrict the future activity or conduct of the Company or any of its SubsidiariesSubsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person, or which would reasonably be expected to prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement by the Outside Date;
(xviii) make any material changes with respect to financial accounting policies or procedures, except as required by changes in GAAP (as confirmed in writing by the Company’s independent registered public accounting advisor);
(xix) other than in the Ordinary Course of Business, (A) make, change or revoke any material Tax election or change any material Tax accounting method, (B) file any material amended Tax Return, (C) enter into, cancel or modify any closing agreement with respect to a material amount of Taxes, (D) settle or otherwise compromise any Tax claim, audit, assessment or dispute with respect to a material amount of Taxes, in the case of clause (C), (D) or (E), for an amount materially in excess of the amount reserved for Taxes on the financial statements of the Company, (E) surrender any right to claim a refund with respect to a material amount of Taxes, (F) request any material ruling with respect to Taxes, (G) agree to an extension or waiver of the statute of limitations with respect to any material Taxes (in each case, other than in connection with extensions of time to file Tax Returns that are automatic or automatically granted or otherwise constitute ordinary course extensions), or (H) enter into any material Tax indemnification, sharing, allocation or similar agreement or arrangement (other than customary provisions under any commercial, leasing, financing, employment or other agreement entered into in the ordinary course of business consistent with past practice with respect no principal purpose of which relates to Taxes);
(xx) transfer, sell, lease, license or otherwise dispose of, grant a covenant not to sue or other right under, abandon, cancel or allow to lapse or expire any Company Intellectual Property, other than (A) non-exclusive licenses granted in the Ordinary Course of Business, or (B) abandonments, cancellation, lapses or expiry of Company Intellectual Property that is not material to the Company’s or its Subsidiaries’ respective businesses.
(xxi) except as required by applicable Law or pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement, (A) materially increase in any manner the cash compensation or consulting fees, bonus opportunity, severance or termination pay of any current or former Company Employee, except for (1) employees below in respect of those Company Employees who are not officers, increases in annual salary, wage rate or consulting fees in the level Ordinary Course of Executive Vice President Business that do not exceed four percent (4%) in the aggregate, and any consequent increases in severance or termination pay, and (2) employees at or above the level of Executive Vice President in respect of increases all Company Employees, the payment of less than 7.5% annual bonuses for completed periods based on actual performance, if applicable, in the Ordinary Course of compensation relative to their compensationBusiness, bonus (B) become a party to, establish, adopt, amend, commence participation in or pensionterminate any material Company Benefit Plan, welfare except for renewals in the Ordinary Course of Business, (C) grant any new equity-based awards, or other benefits prior to such changeamend or modify the terms of any outstanding equity-based awards, under any Stock Plan, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards)Stock Plan, except as contemplated under the terms of this Agreement, (FE) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (GF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants loans to any current or former Company Employee (other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company than routine travel and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper other expense advances issued in the ordinary course Ordinary Course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereofBusiness), (G) Indebtedness under hire any Company Employee above the Bridge Facility, refinancings or replacements thereof and level of commitments thereunder, and any refinancings or replacements of any Vice President (as such refinancing or replacement Indebtednessterm is used to reflect corporate Vice Presidents); provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with terminate without cause the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose employment of any material Intellectual Property; provided that this clause Company Employee above the level of Vice President (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under as such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that term is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viiireflect corporate Vice Presidents);
(ixxxii) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other similar agreement with respect to a labor union, labor organization, works council or similar organization, except for renewals in the Retained Ordinary Course of Business; or
(xxiii) agree, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend authorize or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;foregoing.
(xb) other than capital expenditures made Nothing set forth in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinthis 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 the Parent’s or its Subsidiaries’ operations prior to the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries thatexpressly contemplated or required by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or conditioned), (iv) as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure LetterSchedule or (v) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (v), to the extent permitted under applicable Law and practicable under the circumstances, the Company shallshall provide prior notice to and consult in good faith with Parent prior to taking such action), from the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will, and shall will cause each of its Subsidiaries to, use its and their reasonable best efforts to (A) conduct their businesses in the Retained Business ordinary course of business and (B) preserve intact their business organizations and relationships with customers, suppliers, distributors and other Persons with which it has material business dealings and to remain in material compliance with all of its obligations under, and to not allow an event of default to occur under, the Loan Agreement; provided that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Except (u) as expressly contemplated or required by this Agreement, (v) as required by applicable Law, (w) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), (x) as set forth on Section 6.1(b) of the Company Disclosure Schedule, or (y) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (y), to the extent permitted under applicable Law and practicable under the circumstances, the Company shall provide prior notice to and consult in good faith with Parent prior to taking such action), from the date of this Agreement until earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(i) (x) adopt any change in the certificate of incorporation or bylaws of the Company or (y) adopt any change in the comparable organizational document of any of the Company’s Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize, recapitalize or completely or partially liquidate or dissolve the Company or any of its Subsidiaries;
(iii) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction solely among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, (B) any issuance of Shares pursuant to exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms or issuance of Company Equity Awards upon the recommendation of the Compensation and Talent Committee, (C) incurrence of any Permitted Liens or (D) accrual of dividends on the Series B Shares pursuant to the terms thereof;
(iv) make any loans, advances or capital contributions to or investments in any Person (other than (A) to the Company or any of its wholly owned Subsidiaries, (B) operating leases and extensions of credit terms to customers in each case in the ordinary course of business consistent with past practice, practice and the Company shall, and shall cause each (C) advances of its Subsidiaries to, solely reimbursable expenses to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services any director or officer of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and or its Subsidiaries that, from and after in connection with advancement obligations in effect on the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure LetterAgreement), the Company shall not and shall not permit any of its Subsidiaries to:;
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cv) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise with respect to any combination thereof) in respect of any shares of its capital stock (stock, except for (1A) any dividends or other distributions paid by a direct or indirect any wholly owned Subsidiary of the Company to another direct the Company or indirect to any other wholly owned Subsidiary of the Company or to the Company or and (2B) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect Series B Shares pursuant to the voting of its capital stockterms thereof;
(vi) reclassify, split, combine, subdivide or (E) redeem, purchase, repurchase, redeem repurchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any such transaction by a wholly owned Subsidiary of the Company which remains wholly owned thereafter, (B) acquisitions of Shares upon the vesting or sale thereof in satisfaction of withholding obligations in respect of Company Equity Awards to the extent expressly required by the terms of such Company Equity Awards, or any other wholly owned Subsidiary (C) payment of the Companyexercise price in respect of Company Stock Options, in the case of clauses (B) and (C), outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(iivii) merge create, incur, assume or consolidate with guarantee any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions Indebtedness of the type contemplated by Section 5.01(b)(viidescribed in clauses (a) or Section 5.01(b)(ixand (b) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongdefinition of “Indebtedness”, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: for (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowings in the ordinary course of business consistent with past practice under the Loan Agreement that does do not materially increase exceed $1 million individually or in the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofaggregate, (B) grant guarantees or provide credit support provided by the Company or any transaction or retention bonuses to any director, officer, employee or other service provider of its Subsidiaries of the obligations of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except Subsidiaries in the ordinary course of business consistent to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except clause (A) in of this Section 6.1(b)(vii) and does not violate any other Contract of the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in Company, including the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing IndebtednessLoan Agreement, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany any Indebtedness solely among the Company and its wholly wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(viii) incur or commit to any capital expenditure or expenditures, except capital expenditures (Dw) reflected in the 2023 operating budget of the Company or (1x) to of less than $1 million individually or $5 million in the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and aggregate;
(2ix) overdraft facilities or cash management programs, in each case issued, made or entered into other than in the ordinary course of business consistent with past practice, (EA) commercial paper issued enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, or (B) amend, modify or waive in the ordinary course of business consistent with past practice any material respect or terminate any Material Contract (or any material rights thereunder) in a principal manner adverse to the Company (other than expirations or termination for cause of any such Contract in accordance with its terms);
(x) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) settle, pay, satisfy, discharge, release, waive or compromise any Action for an amount not to exceed in excess of $250,000,000 5 million individually or $10 million in the aggregate at other than (A) any time outstandingsettlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered by insurance coverage or retention amounts maintained by the Company or any of its Subsidiaries and (B) settlements or compromises of any Action for an amount not materially in excess of the amount, if any, reflected or specifically reserved in the balance sheet (For the notes thereto) Indebtednessof the Company included in the Company Reports (with materiality measured relative to the amount so reflected or reserved, if any); provided that, in the case of each of the foregoing clauses (A) and (B), the proceeds settlement or compromise of which will be used to finance all such Action does not (x) impose any non-de minimis restriction on the business or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations operations of the Company or any of its Subsidiaries with respect to such Indebtedness (or Parent or any of its Subsidiaries after the Closing) and Parent and its Subsidiaries(y) include any non-de minimis non-monetary or injunctive relief, includingor the admission of wrongdoing, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of by the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms any of its Subsidiaries or on terms substantially consistent with any of their respective officers or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practicedirectors;
(vxii) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Businessassign, transfer, sell, lease, license, sellexchange, assignswap, let lapseencumber or subject to any Lien (other than Permitted Liens), abandon, cancelpermit to lapse, mortgage, pledge, place a Lien upon or otherwise dispose of any material assets or property (including any capital stock of any Subsidiaries of the Company and any material Owned Intellectual Property; provided that this clause (vi) shall not restrict except (A) ordinary course non-exclusive licenses pursuant to existing contracts or ordinary course security interests commitments in connection with effect prior to the production execution of this Agreement (or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Propertyrefinancings thereof), (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions solely among the Company and its wholly owned Retained Subsidiaries or among the Company’s wholly owned Subsidiaries, or (C) in the ordinary course of business;
(xiii) except for such actions required by the terms of Company Plans, in each case, as in effect on the date hereof: (A) increase the compensation or other benefits payable or provided to the Company’s or its Subsidiaries’ current or former employees, officers, directors, independent contractors or other individual service providers, except in the ordinary course of business; (B) increase or accelerate or commit to accelerate the funding, payment or vesting of compensation or benefits provided under any Company Plan, (C) grant or announce any cash- or equity or equity-based incentive awards, bonus, change of control, severance or retention award to any employee or other service provider of the Company or its Subsidiaries; (D) establish, adopt, enter into, modify, terminate or amend any labor agreement or Company Plan (or any plan, program, agreement or arrangement that would be a Company Plan if in effect on the date hereof); (E) recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative of any employees of the Company or its Subsidiaries or (F) hire or terminate (other than for cause) the employment of any employee of the Company or any of its Subsidiaries whose total annual base compensation exceeds (or would exceed) $200,000;
(xiv) acquire, or agree to acquire, any business, assets that constitute a business or capital stock of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than the acquisition of assets from vendors or suppliers of the Company or any of its Subsidiaries in the ordinary course of business, or enter into any material joint venture, partnership or similar arrangement with any Person;
(xv) implement or announce any permanent plant closings or permanent facility shutdown that would implicate the Worker Adjustment and Retraining Notification Act of 1988;
(xvi) (A) make, change or revoke any Tax election; (B) change any annual Tax accounting period or method of Tax accounting, (C) file any amended Tax Return, (D) licensessettle or compromise any material claim related to Taxes, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
enter into any material closing agreement, (viiF) with respect surrender any right to claim a material Tax refund, offset or other reduction in liability, (G) request or consent to any extension or waiver of the Retained Businesslimitation period applicable to any Tax claim or assessment, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of (H) fail to pay any properties or assets material Tax the becomes due and payable (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)estimated tax payments), except (I) incur any material liability for Taxes (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not than in the ordinary course or $100,000,000 individually in any event of business) or (BJ) transactions among request any ruling or similar guidance from any Taxing Authority in respect of Taxes;
(xvii) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business; or
(xviii) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Sub or any of their Affiliates, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Retained Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, including the restrictions set forth above, complete control and supervision over its and its Subsidiaries;’ respective operations.
(viiid) except with respect Subject to SpinCo and the SpinCo Subsidiariesterms of this Agreement, issueincluding Section 6.5, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on from the date of this Agreement in accordance with until the existing terms of such awards Effective Time, Parent and the Company Stock PlansMerger Sub shall not, and shall cause their respective Affiliates not to (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided thatincluding, for the avoidance of doubt, granting customary profit participation through the Equity Financing and use of negative control rights where available), directly or indirectly, invest in or acquire, or agree to invest in or acquire, including by merging or consolidating with, or by purchasing the assets of or equity in, any Person (a “Specified Acquisition”), if the entering into customary film of a definitive agreement relating to or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant the consummation of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or a Specified Acquisition would reasonably be expected to, to (A) prevent, materially delay or materially impair the obtaining of, or adversely affect in any material respect the ability of Parent or its Affiliates to obtain, any authorizations, consents, orders, declarations or approvals of any Governmental Authority or the expiration or termination of any applicable waiting period necessary to consummate the transactions contemplated by this Agreement, including the Merger, or (B) materially increase the risk of any Governmental Authority entering an order, ruling, judgment or injunction prohibiting the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includintransactions contemplated by this Agreement, including the Merger.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior Prior to the First Effective Time (Time, unless Parent shall has otherwise approve consented in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)writing thereto, the Company Company:
(i) shall, and shall cause each of its Subsidiaries and each of the Investment Companies to, conduct its operations according to their usual, regular and ordinary course in substantially the same manner as heretofore conducted;
(ii) shall use its reasonable best efforts efforts, and shall cause each of its Material Subsidiaries and each of the Investment Companies to conduct use its reasonable best efforts, to preserve intact their business organizations and goodwill, keep available the Retained Business services of their respective officers and employees and maintain satisfactory relationships with those persons having business relationships with them;
(iii) shall not, and shall cause its Material Subsidiaries not to, amend their respective Certificates of Incorporation or Bylaws or comparable governing instruments;
(iv) shall, and shall cause each of the Investment Companies to, promptly notify Parent of (x) any Company Material Adverse Effect, (y) any litigation matter relating to an amount in excess of $500,000, governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or (z) any material breach of any representation or warranty contained herein;
(v) shall, upon receiving any written notice from any Taxing authority proposing any adjustment to any Tax relating to the Company or any of its Subsidiaries, give prompt written notice thereof to Parent, which notice shall describe in detail each proposed adjustment;
(vi) shall promptly deliver to Parent true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement;
(vii) shall not, and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to authorize or propose, or enter into an agreement with respect to, any merger, consolidation or business combination (other than the Merger), any acquisition of assets or securities other than in the ordinary course of business, any disposition of assets or securities other than in the ordinary course of business or any release or relinquishment of any material contract rights other than in the ordinary course of business;
(viii) shall not, and shall not permit any of its Subsidiaries to, issue any shares of its capital stock or securities convertible into or exchangeable or exercisable for shares of its capital stock, except upon exercise of options outstanding on the date of this Agreement under the Company Stock Option Plans or granted pursuant to the terms of the Stock Option Agreement to purchase shares of Company Common Stock, or effect any stock split, reverse stock split, stock dividend, subdivision, reclassification, combination, exchange, or other similar transaction with respect to any shares of its capital stock or other ownership interests, or otherwise change its capitalization;
(ix) shall not, and shall not permit any of its Subsidiaries to, grant, confer or award any options, warrants, conversion rights or other rights, not existing on the date hereof, to acquire any shares of its capital stock or other securities of the Company or its Subsidiaries;
(x) shall not, and shall not permit any of its Subsidiaries to, take or fail to take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as a reorganization with the meaning of Section 368(a) of the Code;
(xi) except pursuant to (i) applicable law, (ii) the terms of pre-existing contractual arrangements or policies or (iii) the ordinary course of business consistent with past practice, and the Company shallshall not, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except , amend the terms of any Company Plan, including, without limitation, any employment, severance or similar agreements or arrangements in existence on the date hereof, or adopt any new employee compensation or benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements, or change in any respect any vesting schedule with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A))any Company Plan or grant or award thereunder, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments grant any salary increases to the governing documents of any Subsidiary employee of the Company that would or any Subsidiary;
(xii) except in the ordinary course consistent with past practice, shall not, and shall not prevent, delay or impair the Initial Merger or the other Transactions)permit any of its Subsidiaries to, (Bx) splitincur, combinecreate, subdivide assume or reclassify its outstanding shares otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)other individual, 32 37 corporation or other entity, (Cy) make any loans or advances to any other person or (z) subject any of its property or assets, or permit any of its property or assets to be subjected, to any lien, claim or encumbrance of any kind;
(xiii) shall not, and shall not permit any of its Subsidiaries to, (x) change any practice with respect to Taxes, (y) make, revoke or change any election with respect to Taxes or (z) settle or compromise any Tax liability;
(xiv) shall not (y) declare, set aside or pay any dividend or make any other distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement payment with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, regular quarterly cash dividends payable on Company Restricted Common Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith0.06 per share) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) other ownership interests or (Hz) aboveredeem, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable forstock, or make any options, warrants or other rights to acquire, commitment for any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)action;
(ixxv) with respect to the Retained Businessshall not, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is shall not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor permit any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, preventagree, materially delay in writing or materially impair the consummation otherwise, to take any of the Transactions;
(x) other than capital expenditures made foregoing actions or take any action which would make any representation or warranty in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinArticle 3 hereof untrue or incorrect.
Appears in 1 contract
Sources: Merger Agreement (Mony Group Inc)