CONDUCT OF BUSINESS OF ACQUIROR. Acquiror hereby covenants and agrees that, from the date of this Merger Agreement until the Effective Time, Acquiror, except for obligations under Agreements in existence on the date of this Merger Agreement with respect to Mobile Satellite Ventures LLC and except for the Proposed Satellite Restructuring, unless otherwise expressly contemplated by this Merger Agreement or consented to in writing by the Company, which consent shall not be unreasonably withheld, will, and will cause the Acquiror Subsidiaries to, carry on its and their respective businesses only in the Ordinary Course of Business, use their respective reasonable best efforts to preserve intact their business organizations and Assets, maintain their rights and franchises, retain the services of their officers and key employees and maintain their relationships with customers, suppliers, licensors, licensees and others having business dealings with them, and use their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained. Without limiting the generality of the foregoing, but subject to the exception for matters relating to Mobile Satellite Ventures LLC set forth in the immediately preceding sentence and except for the Proposed Satellite Restructuring, except as otherwise expressly contemplated by this Merger Agreement or as consented to in writing by the Company, which consent shall not be unreasonably withheld, from the date of this Merger Agreement until the Effective Time Acquiror shall not, and shall not permit any Acquiror Subsidiary to: (a) (i) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or employee, except for increases or bonuses in the Ordinary Course of Business to employees who are not directors or officers; (ii) grant any severance or termination pay to, or enter into any severance Agreement with, any director, officer or employee (other than pursuant to the normal severance practices or existing Agreements of Acquiror or any Acquiror Subsidiary in effect on the date of this Merger Agreement), or enter into any employment Agreement, change of control Agreements or other similar Agreements or understanding with any director, officer or employee; (iii) establish, adopt, enter into or amend any Plan or Other Arrangement, except as may be required to comply with applicable Law; (iv) pay any material benefits not provided for under any Plan or Other Arrangement; (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Plan or Other Arrangement (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder) to any director, officer or employee, except as required under the Agreements set forth in Schedule 5.02(a)(v) of the Acquiror Disclosure Schedule to employees who are not officers or directors, or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Schedule 5.02(a)(vi) of the Acquiror Disclosure Schedule; provided, that, with the prior consent of Company (which consent shall not be unreasonably withheld), Acquiror may (x) agree to pay retention bonuses and (y) issue restricted shares of Acquiror Common Stock and/or Acquiror Stock Options to purchase Acquiror Common Stock for purposes of retaining employees; provided, further, that notwithstanding any other provision contained in this Section 5.02, Acquiror may issue after the date hereof stock options to purchase Acquiror Common Stock in the Ordinary Course of Business not in excess of an aggregate of 100,000 shares of Acquiror Common Stock underlying such options without the consent of the Company; (b) declare, set aside or pay any dividend on, or make any other distribution in respect of, outstanding shares of capital stock other than dividends or other distributions declared, set aside, paid or made by any Acquiror Subsidiary to Acquiror or any wholly owned Acquiror Subsidiary; (i) redeem, purchase or otherwise acquire any shares of capital stock of Acquiror or any Acquiror Subsidiary or any securities or obligations convertible into or exchangeable for any shares of capital stock of Acquiror or any Acquiror Subsidiary, or any options, warrants or conversion or other rights to acquire any shares of capital stock of Acquiror or any Acquiror Subsidiary or any such securities or obligations, or any other securities thereof; (ii) effect any reorganization or recapitalization; or (iii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; (d) except (i) upon the exercise of Acquiror Stock Options or Acquiror Pre-Merger Warrants in accordance with their terms, and (ii) the issuance of options to purchase Acquiror Common Stock to the extent permitted under clause (a) above, issue, deliver, award, grant or sell, or authorize the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) of, any shares of any class of its capital stock (including shares held in treasury), any securities convertible into or exercisable or exchangeable for any such shares, or any rights, warrants or options to acquire any such shares, or amend or otherwise modify the terms of any such rights, warrants or options the effect of which shall be to make such terms more favorable to the holders thereof; (e) except as contemplated by Agreements set forth in Schedule 5.02(e) of the Acquiror Disclosure Schedule, acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the Assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any Assets of any other Person (other than the purchase of assets from suppliers or vendors in the Ordinary Course of Business); (i) sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets or any shares of its capital stock or any Acquiror XM Stock or any security or other right that represents the right to acquire or receive, directly or indirectly, any capital stock of Acquiror or XM, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any capital stock of Acquiror or XM, whether any such transaction described in (i) or (ii) above is to be settled by delivery of capital stock or such other securities or other rights, in cash or otherwise, and in the case of (i) and (ii), except for (x) Dispositions of immaterial assets not in excess of $500,000 in the aggregate and (y) sales of items of a nature reflected on the Acquiror Balance Sheet as cash equivalents or short term investments for fair market value (as determined in Acquiror's good faith judgment) in exchange for cash, cash equivalents or other short term investments; provided, that, notwithstanding any other provision contained in this Section 5.02, without the consent of the Company, Acquiror shall be permitted to sell (i) up to one (1) million shares of Acquiror XM Stock, or (ii) if the Second Closing (as defined in the Bridge Note Agreement) shall not have occurred for any reason, up to an additional two (2) million shares of Acquiror XM Stock; provided that Acquiror shall not be permitted to sell any of the additional two (2) million shares of Acquiror XM Stock contemplated in clause (ii) above until after July 1, 2001 and if all of the conditions set forth in Section 6.10 hereof and Section 3.02(f) of the Bridge Note Agreement are able to be satisfied; provided, further, that Acquiror shall use its reasonable best efforts to cause the conditions set forth in Section 6.10 and Section 3.02(f) of the Bridge Note Agreement to be satisfied; provided, further, that prior to the sale of any of the additional two (2) million shares of Acquiror XM Stock as contemplated by (ii) above, Acquiror shall deliver to the Company a certificate of its chief financial officer stating that the proceeds to be received by Acquiror upon the sale of such shares, after giving effect to Acquiror's then existing liquidity, are reasonably necessary for the business purposes of Acquiror promptly following receipt of such proceeds and containing a schedule setting forth in reasonable detail such intended uses; (g) adopt any amendments to its articles or certificate of incorporation, bylaws or other comparable charter or organizational documents (other than the Restated Charter); (h) make or rescind any material election relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or elect to change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of the federal income tax returns for the taxable year ended December 31, 2000, except in either case as may be required by Law, the IRS or GAAP; (i) make or agree to make any new capital expenditure or expenditures which are not included in Acquiror's 2001 capital budget, a copy of which was furnished to the Company, and which expenditures are, individually, in excess of $50,000 or, in the aggregate, in excess of $500,000; (i) incur any Indebtedness for borrowed money (except for the transactions contemplated by the Bridge Note Documents) or guarantee any such Indebtedness of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), issue or sell any debt securities or warrants or other rights to acquire any debt securities of Acquiror or any Acquiror Subsidiary (other than indebtedness, securities or warrants or rights issued to Acquiror or a wholly owned Acquiror Subsidiary), guarantee any debt securities of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), enter into any "keep well" or other Agreement to maintain any financial statement condition of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary) or enter into any Agreement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the Ordinary Course of Business, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person other than intragroup loans, advances, capital contributions or investments between or among Acquiror and any of its wholly owned Acquiror Subsidiaries and other than (x) the extension of credit to customers of Acquiror or any Acquiror Subsidiary in the Ordinary Course of Business, (y) intragroup loans, advances, capital contributions or investments between or among Acquiror and any wholly owned Acquiror Subsidiary and (z) loans to employees in the Ordinary Course of Business; (k) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute or contingent, matured or unmatured, known or unknown), other than the payment, discharge or satisfaction, in the Ordinary Course of Business or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent financial statement or incurred in the Ordinary Course of Business, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar Agreements to which Acquiror or any Acquiror Subsidiary is a party, or take any action that would adversely affect Acquiror's ability to repay or redeem the Discrepancy Notes; (l) other than in the Ordinary Course of Business, pay, discharge, settle or satisfy any dispute with a customer or agree to reduce the amount owed by a customer or accept something in lieu of full payment owed by a customer, in each case involving an amount in dispute of more than $250,000 or more than $250,000 in payments, commitments or liabilities being reduced; provided, that, for purposes of this paragraph (l) only, Ordinary Course of Business shall not include any transactions, settlements or other arrangements (A) between Acquiror or any Acquiror Subsidiary and their respective affiliates with respect to payments for services rendered and (B) in which Acquiror or any Acquiror Subsidiary accepts equity securities of the customer in lieu of any payments, commitments or liabilities; (m) forgive any loans owed to Acquiror or any Acquiror Subsidiary; (n) except in the Ordinary Course of Business, waive, release or assign any rights or claims, or modify, amend or terminate any Agreement to which Acquiror or any Acquiror Subsidiary is a party; (o) amend, alter, repeal or otherwise modify, or waive any right or obligation under, any consents, releases, waivers or other instrument obtained from banks and/or guarantors under the Term Credit Agreement or Revolving Credit Agreement which would materially adversely affect Acquiror's ability to consummate the transaction contemplated by this Merger Agreement, would reasonably be expected to have an Acquiror Material Adverse Effect or would require a repayment of Indebtedness or would adversely affect the economics of the transactions contemplated herein for the Company, the Preferred Stockholders, the New Lenders or the New Guarantors (including, without limitation, through adversely affecting the rights, interest or remedies with respect any documents, instruments, agreements or other arrangements to be entered into by the Preferred Stockholders, the New Lenders or the New Guarantors with Acquiror, any Acquiror Subsidiary or Hughes after giving effect to the Merger); (▇) ▇▇ter into any Agreement which involves payments by Acquiror or any Acquiror Subsidiary in excess of $500,000 in any twelve (12) month period; (q) make any change in any method of accounting or accounting practice or policy other than those required by GAAP or a Governmental Entity; (r) vote in favor of, or otherwise consent to, the amendment, alteration, repeal or other modification of, or waive any right or obligation under, any provision of (i) the Amended and Restated Asset Sale Agreement dated January 8, 2001 between Motient Services Inc. and Mobile Satellite Ventures LLC (the "MSV Asset Sale Agreement") if such amendment, alteration, repeal or other modification would be reasonably expected to reduce the combined value of the Acquiror's interests in Mobile Satellite Ventures LLC and Motient Services Inc. or (ii) the Amended and Restated Shareholders Agreement, dated as of August 8, 2000, by and among XM, Acquiror and other parties named therein; (s) except as permitted by Section 5.05 hereof, take any action to exempt or make any Person or action (other than the Company) not subject to the provisions of Section 203 of Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation; or (t) authorize, or commit or agree to do any of the foregoing.
Appears in 1 contract
CONDUCT OF BUSINESS OF ACQUIROR. Acquiror hereby covenants and agrees that, from the date of this Merger Agreement until the Effective Time, Acquiror, except for obligations under Agreements in existence on the date of this Merger Agreement with respect to Mobile Satellite Ventures LLC and except for the Proposed Satellite Restructuring, unless otherwise expressly contemplated by this Merger Agreement or consented to in writing by the Company, which consent shall not be unreasonably withheld, will, and will cause the Acquiror Subsidiaries to, carry on its and their respective businesses only in the Ordinary Course of Business, use their respective reasonable best efforts to preserve intact their business organizations and Assets, maintain their rights and franchises, retain the services of their officers and key employees and maintain their relationships with customers, suppliers, licensors, licensees and others having business dealings with them, and use their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained. Without limiting the generality of the foregoing, but subject to the exception for matters relating to Mobile Satellite Ventures LLC set forth in the immediately preceding sentence and except for the Proposed Satellite Restructuring, except as otherwise expressly contemplated by this Merger Agreement or as consented to in writing by the Company, which consent shall not be unreasonably withheld, from the date of this Merger Agreement until the Effective Time Acquiror shall not, and shall not permit any Acquiror Subsidiary to:
(a) (i) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or employee, except for increases or bonuses in the Ordinary Course of Business to employees who are not directors or officers; (ii) grant any severance or termination pay to, or enter into any severance Agreement with, any director, officer or employee (other than pursuant to the normal severance practices or existing Agreements of Acquiror or any Acquiror Subsidiary in effect on the date of this Merger Agreement), or enter into any employment Agreement, change of control Agreements or other similar Agreements or understanding with any director, officer or employee; (iii) establish, adopt, enter into or amend any Plan or Other Arrangement, except as may be required to comply with applicable Law; (iv) pay any material benefits not provided for under any Plan or Other Arrangement; (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Plan or Other Arrangement (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder) to any director, officer or employee, except as required under the Agreements set forth in Schedule 5.02(a)(v) of the Acquiror Disclosure Schedule to employees who are not officers or directors, or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Schedule 5.02(a)(vi) of the Acquiror Disclosure Schedule; provided, that, with the prior consent of Company (which consent shall not be unreasonably withheld), Acquiror may (x) agree to pay retention bonuses and (y) issue restricted shares of Acquiror Common Stock and/or Acquiror Stock Options to purchase Acquiror Common Stock for purposes of retaining employees; provided, further, that notwithstanding any other provision contained in this Section 5.02, Acquiror may issue after the date hereof stock options to purchase Acquiror Common Stock in the Ordinary Course of Business not in excess of an aggregate of 100,000 shares of Acquiror Common Stock underlying such options without the consent of the Company;
(b) declare, set aside or pay any dividend on, or make any other distribution in respect of, outstanding shares of capital stock other than dividends or other distributions declared, set aside, paid or made by any Acquiror Subsidiary to Acquiror or any wholly owned Acquiror Subsidiary;
(i) redeem, purchase or otherwise acquire any shares of capital stock of Acquiror or any Acquiror Subsidiary or any securities or obligations convertible into or exchangeable for any shares of capital stock of Acquiror or any Acquiror Subsidiary, or any options, warrants or conversion or other rights to acquire any shares of capital stock of Acquiror or any Acquiror Subsidiary or any such securities or obligations, or any other securities thereof; (ii) effect any reorganization or recapitalization; or (iii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock;
(d) except (i) upon the exercise of Acquiror Stock Options or Acquiror Pre-Merger Warrants in accordance with their terms, and (ii) the issuance of options to purchase Acquiror Common Stock to the extent permitted under clause (a) above, issue, deliver, award, grant or sell, or authorize the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) of, any shares of any class of its capital stock (including shares held in treasury), any securities convertible into or exercisable or exchangeable for any such shares, or any rights, warrants or options to acquire any such shares, or amend or otherwise modify the terms of any such rights, warrants or options the effect of which shall be to make such terms more favorable to the holders thereof;
(e) except as contemplated by Agreements set forth in Schedule 5.02(e) of the Acquiror Disclosure Schedule, acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the Assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any Assets of any other Person (other than the purchase of assets from suppliers or vendors in the Ordinary Course of Business);
(i) sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets or any shares of its capital stock or any Acquiror XM Stock or any security or other right that represents the right to acquire or receive, directly or indirectly, any capital stock of Acquiror or XM, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any capital stock of Acquiror or XM, whether any such transaction described in (i) or (ii) above is to be settled by delivery of capital stock or such other securities or other rights, in cash or otherwise, and in the case of (i) and (ii), except for (x) Dispositions of immaterial assets not in excess of $500,000 in the aggregate and (y) sales of items of a nature reflected on the Acquiror Balance Sheet as cash equivalents or short term investments for fair market value (as determined in Acquiror's good faith judgment) in exchange for cash, cash equivalents or other short term investments; provided, that, notwithstanding any other provision contained in this Section 5.02, without the consent of the Company, Acquiror shall be permitted to sell (i) up to one (1) million shares of Acquiror XM Stock, or (ii) if the Second Closing (as defined in the Bridge Note Agreement) shall not have occurred for any reason, up to an additional two (2) million shares of Acquiror XM Stock; provided that Acquiror shall not be permitted to sell any of the additional two (2) million shares of Acquiror XM Stock contemplated in clause (ii) above until after July 1, 2001 and if all of the conditions set forth in Section 6.10 hereof and Section 3.02(f) of the Bridge Note Agreement are able to be satisfied; provided, further, that Acquiror shall use its reasonable best efforts to cause the conditions set forth in Section 6.10 and Section 3.02(f) of the Bridge Note Agreement to be satisfied; provided, further, that prior to the sale of any of the additional two (2) million shares of Acquiror XM Stock as contemplated by (ii) above, Acquiror shall deliver to the Company a certificate of its chief financial officer stating that the proceeds to be received by Acquiror upon the sale of such shares, after giving effect to Acquiror's then existing liquidity, are reasonably necessary for the business purposes of Acquiror promptly following receipt of such proceeds and containing a schedule setting forth in reasonable detail such intended uses;
(g) adopt any amendments to its articles or certificate of incorporation, bylaws or other comparable charter or organizational documents (other than the Restated Charter);
(h) make or rescind any material election relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or elect to change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of the federal income tax returns for the taxable year ended December 31, 2000, except in either case as may be required by Law, the IRS or GAAP;
(i) make or agree to make any new capital expenditure or expenditures which are not included in Acquiror's 2001 capital budget, a copy of which was furnished to the Company, and which expenditures are, individually, in excess of $50,000 or, in the aggregate, in excess of $500,000;
(i) incur any Indebtedness for borrowed money (except for the transactions contemplated by the Bridge Note Documents) or guarantee any such Indebtedness of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), issue or sell any debt securities or warrants or other rights to acquire any debt securities of Acquiror or any Acquiror Subsidiary (other than indebtedness, securities or warrants or rights issued to Acquiror or a wholly owned Acquiror Subsidiary), guarantee any debt securities of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), enter into any "keep well" or other Agreement to maintain any financial statement condition of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary) or enter into any Agreement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the Ordinary Course of Business, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person other than intragroup loans, advances, capital contributions or investments between or among Acquiror and any of its wholly owned Acquiror Subsidiaries and other than (x) the extension of credit to customers of Acquiror or any Acquiror Subsidiary in the Ordinary Course of Business, (y) intragroup loans, advances, capital contributions or investments between or among Acquiror and any wholly owned Acquiror Subsidiary and (z) loans to employees in the Ordinary Course of Business;
(k) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute or contingent, matured or unmatured, known or unknown), other than the payment, discharge or satisfaction, in the Ordinary Course of Business or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent financial statement or incurred in the Ordinary Course of Business, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar Agreements to which Acquiror or any Acquiror Subsidiary is a party, or take any action that would adversely affect Acquiror's ability to repay or redeem the Discrepancy Notes;
(l) other than in the Ordinary Course of Business, pay, discharge, settle or satisfy any dispute with a customer or agree to reduce the amount owed by a customer or accept something in lieu of full payment owed by a customer, in each case involving an amount in dispute of more than $250,000 or more than $250,000 in payments, commitments or liabilities being reduced; provided, that, for purposes of this paragraph (l) only, Ordinary Course of Business shall not include any transactions, settlements or other arrangements (A) between Acquiror or any Acquiror Subsidiary and their respective affiliates with respect to payments for services rendered and (B) in which Acquiror or any Acquiror Subsidiary accepts equity securities of the customer in lieu of any payments, commitments or liabilities;
(m) forgive any loans owed to Acquiror or any Acquiror Subsidiary;
(n) except in the Ordinary Course of Business, waive, release or assign any rights or claims, or modify, amend or terminate any Agreement to which Acquiror or any Acquiror Subsidiary is a party;
(o) amend, alter, repeal or otherwise modify, or waive any right or obligation under, any consents, releases, waivers or other instrument obtained from banks and/or guarantors under the Term Credit Agreement or Revolving Credit Agreement which would materially adversely affect Acquiror's ability to consummate the transaction contemplated by this Merger Agreement, would reasonably be expected to have an Acquiror Material Adverse Effect or would require a repayment of Indebtedness or would adversely affect the economics of the transactions contemplated herein for the Company, the Preferred Stockholders, the New Lenders or the New Guarantors (including, without limitation, through adversely affecting the rights, interest or remedies with respect any documents, instruments, agreements or other arrangements to be entered into by the Preferred Stockholders, the New Lenders or the New Guarantors with Acquiror, any Acquiror Subsidiary or Hughes after giving effect to the Merger);
(▇p) enter into any A▇▇ter into any Agreement ▇▇▇▇nt which involves payments by Acquiror or any Acquiror Subsidiary in excess of $500,000 in any twelve (12) month period;
(q) make any change in any method of accounting or accounting practice or policy other than those required by GAAP or a Governmental Entity;
(r) vote in favor of, or otherwise consent to, the amendment, alteration, repeal or other modification of, or waive any right or obligation under, any provision of (i) the Amended and Restated Asset Sale Agreement dated January 8, 2001 between Motient Services Inc. and Mobile Satellite Ventures LLC (the "MSV Asset Sale Agreement") if such amendment, alteration, repeal or other modification would be reasonably expected to reduce the combined value of the Acquiror's interests in Mobile Satellite Ventures LLC and Motient Services Inc. or (ii) the Amended and Restated Shareholders Agreement, dated as of August 8, 2000, by and among XM, Acquiror and other parties named therein;
(s) except as permitted by Section 5.05 hereof, take any action to exempt or make any Person or action (other than the Company) not subject to the provisions of Section 203 of Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation; or
(t) authorize, or commit or agree to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Motient Corp)
CONDUCT OF BUSINESS OF ACQUIROR. Except as set forth in Section 6.2 of --------------------------------- the Acquiror hereby covenants and agrees thatDisclosure Letter, from the date of this Merger Agreement until hereof to the Effective Time, Acquiror, except for obligations under Agreements in existence on the date of this Merger Agreement with respect to Mobile Satellite Ventures LLC and except for the Proposed Satellite Restructuring, unless otherwise expressly contemplated by this Merger Agreement or consented to in writing by the Company, which consent Acquiror shall not be unreasonably withheld, will, and will cause the Acquiror Subsidiaries to, carry on its and their respective businesses only in the Ordinary Course of Business, use their respective reasonable best efforts to preserve intact their business organizations and Assets, maintain their rights and franchises, retain the services of their officers and key employees and maintain their relationships with customers, suppliers, licensors, licensees and others having business dealings with them, and use their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained. Without limiting the generality of the foregoing, but subject to the exception for matters relating to Mobile Satellite Ventures LLC set forth in the immediately preceding sentence and except for the Proposed Satellite Restructuring, except as otherwise expressly contemplated by this Merger Agreement or as consented to in writing by the Company, which consent shall not be unreasonably withheld, from the date of this Merger Agreement until the Effective Time Acquiror shall not, (and shall cause its Subsidiaries not permit any Acquiror Subsidiary to:):
(a1) (i) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or employee, except for increases or bonuses in the Ordinary Course issue shares of Business to employees who are not directors or officers; (ii) grant any severance or termination pay to, or enter into any severance Agreement with, any director, officer or employee (other than pursuant to the normal severance practices or existing Agreements of Acquiror Media Stock or any Acquiror Subsidiary in effect on the date of this Merger Agreement)option, warrant or enter into any employment Agreement, change of control Agreements or other similar Agreements or understanding with any director, officer or employee; (iii) establish, adopt, enter into or amend any Plan or Other Arrangement, except as may be required to comply with applicable Law; (iv) pay any material benefits not provided for under any Plan or Other Arrangement; (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Plan or Other Arrangement (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder) to any director, officer or employee, except as required under the Agreements set forth in Schedule 5.02(a)(v) of the Acquiror Disclosure Schedule to employees who are not officers or directors, or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Schedule 5.02(a)(vi) of the Acquiror Disclosure Schedule; provided, that, with the prior consent of Company (which consent shall not be unreasonably withheld), Acquiror may (x) agree to pay retention bonuses and (y) issue restricted shares of Acquiror Common Stock and/or Acquiror Stock Options to purchase Acquiror Common Stock for purposes of retaining employees; provided, further, that notwithstanding any other provision contained in this Section 5.02, Acquiror may issue after the date hereof stock options to purchase Acquiror Common Stock in the Ordinary Course of Business not in excess of an aggregate of 100,000 shares of Acquiror Common Stock underlying such options without the consent of the Company;
(b) declare, set aside or pay any dividend on, or make any other distribution in respect of, outstanding shares of capital stock other than dividends or other distributions declared, set aside, paid or made by any Acquiror Subsidiary to Acquiror or any wholly owned Acquiror Subsidiary;
(i) redeem, purchase or otherwise acquire any shares of capital stock of Acquiror or any Acquiror Subsidiary right relating thereto or any securities or obligations convertible into or exchangeable for any shares of capital stock Media Stock at less than fair market value as determined by the Board of Directors of Acquiror (other than pursuant to the terms of existing options or any Acquiror Subsidiarybenefit plans), or split, combine, redeem, convert or reclassify the Media Stock or issue any options, warrants securities in exchange or conversion or other rights to acquire any in substitution for shares of capital stock Media Stock;
(2) amend its Certificate of Acquiror Incorporation or any Acquiror Subsidiary or any such securities or obligations, or any Bylaws (other securities thereof; (ii) effect any reorganization or recapitalization; or (iii) split, combine or reclassify any than the filing of its capital stock or issue or authorize or propose a Certificate of Designations for the issuance of any other securities series of Preferred Stock of Acquiror) in respect of, in lieu any manner adverse to the holders of or in substitution for, shares of its capital stockMedia Stock;
(d3) except (i) upon the exercise declare, set aside or make any dividends or distributions in cash, securities or property to holders of Acquiror Stock Options or Acquiror Pre-Merger Warrants in accordance with their terms, and (ii) the issuance of options to purchase Acquiror Common Stock to the extent permitted under clause (a) above, issue, deliver, award, grant or sell, or authorize the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) of, any shares of any class of its capital stock (including shares held in treasury), any securities convertible into or exercisable or exchangeable for any such shares, or any rights, warrants or options to acquire any such shares, or amend or otherwise modify the terms of any such rights, warrants or options the effect of which shall be to make such terms more favorable to the holders thereofMedia Stock;
(e4) except as contemplated by Agreements set forth conduct its business in Schedule 5.02(e) of the Acquiror Disclosure Schedule, acquire a manner or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the Assets oftake, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any Assets of any other Person (other than the purchase of assets from suppliers or vendors in the Ordinary Course of Business);
(i) sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets or any shares of its capital stock or any Acquiror XM Stock or any security or other right that represents the right to acquire or receive, directly or indirectly, any capital stock of Acquiror or XM, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any capital stock of Acquiror or XM, whether any such transaction described in (i) or (ii) above is cause to be settled by delivery of capital stock or such other securities or other rights, in cash or otherwise, and in the case of (i) and (ii), except for (x) Dispositions of immaterial assets not in excess of $500,000 in the aggregate and (y) sales of items of a nature reflected on the Acquiror Balance Sheet as cash equivalents or short term investments for fair market value (as determined in Acquiror's good faith judgment) in exchange for cash, cash equivalents or other short term investments; provided, that, notwithstanding any other provision contained in this Section 5.02, without the consent of the Company, Acquiror shall be permitted to sell (i) up to one (1) million shares of Acquiror XM Stock, or (ii) if the Second Closing (as defined in the Bridge Note Agreement) shall not have occurred for any reason, up to an additional two (2) million shares of Acquiror XM Stock; provided that Acquiror shall not be permitted to sell any of the additional two (2) million shares of Acquiror XM Stock contemplated in clause (ii) above until after July 1, 2001 and if all of the conditions set forth in Section 6.10 hereof and Section 3.02(f) of the Bridge Note Agreement are able to be satisfied; provided, further, that Acquiror shall use its reasonable best efforts to cause the conditions set forth in Section 6.10 and Section 3.02(f) of the Bridge Note Agreement to be satisfied; provided, further, that prior to the sale of any of the additional two (2) million shares of Acquiror XM Stock as contemplated by (ii) above, Acquiror shall deliver to the Company a certificate of its chief financial officer stating that the proceeds to be received by Acquiror upon the sale of such shares, after giving effect to Acquiror's then existing liquidity, are reasonably necessary for the business purposes of Acquiror promptly following receipt of such proceeds and containing a schedule setting forth in reasonable detail such intended uses;
(g) adopt any amendments to its articles or certificate of incorporation, bylaws or other comparable charter or organizational documents (other than the Restated Charter);
(h) make or rescind any material election relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or elect to change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of the federal income tax returns for the taxable year ended December 31, 2000, except in either case as may be required by Law, the IRS or GAAP;
(i) make or agree to make any new capital expenditure or expenditures which are not included in Acquiror's 2001 capital budget, a copy of which was furnished to the Company, and which expenditures are, individually, in excess of $50,000 or, in the aggregate, in excess of $500,000;
(i) incur any Indebtedness for borrowed money (except for the transactions contemplated by the Bridge Note Documents) or guarantee any such Indebtedness of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), issue or sell any debt securities or warrants or other rights to acquire any debt securities of Acquiror or any Acquiror Subsidiary (other than indebtedness, securities or warrants or rights issued to Acquiror or a wholly owned Acquiror Subsidiary), guarantee any debt securities of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), enter into any "keep well" or other Agreement to maintain any financial statement condition of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary) or enter into any Agreement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the Ordinary Course of Business, or (ii) make any loans, advances or capital contributions to, or investments intaken, any other Person other than intragroup loans, advances, capital contributions or investments between or among Acquiror and any of its wholly owned Acquiror Subsidiaries and other than (x) the extension of credit to customers of Acquiror or any Acquiror Subsidiary in the Ordinary Course of Business, (y) intragroup loans, advances, capital contributions or investments between or among Acquiror and any wholly owned Acquiror Subsidiary and (z) loans to employees in the Ordinary Course of Business;
(k) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute or contingent, matured or unmatured, known or unknown), other than the payment, discharge or satisfaction, in the Ordinary Course of Business or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent financial statement or incurred in the Ordinary Course of Business, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar Agreements to which Acquiror or any Acquiror Subsidiary is a party, or take any action that would adversely affect Acquiror's ability to repay or redeem the Discrepancy Notes;
(l) other than in the Ordinary Course of Business, pay, discharge, settle or satisfy any dispute with a customer or agree to reduce the amount owed by a customer or accept something in lieu of full payment owed by a customer, in each case involving an amount in dispute of more than $250,000 or more than $250,000 in payments, commitments or liabilities being reduced; provided, that, for purposes of this paragraph (l) only, Ordinary Course of Business shall not include any transactions, settlements or other arrangements (A) between Acquiror or any Acquiror Subsidiary and their respective affiliates with respect to payments for services rendered and (B) in which Acquiror or any Acquiror Subsidiary accepts equity securities of the customer in lieu of any payments, commitments or liabilities;
(m) forgive any loans owed to Acquiror or any Acquiror Subsidiary;
(n) except in the Ordinary Course of Business, waive, release or assign any rights or claims, or modify, amend or terminate any Agreement to which Acquiror or any Acquiror Subsidiary is a party;
(o) amend, alter, repeal or otherwise modify, or waive any right or obligation under, any consents, releases, waivers or other instrument obtained from banks and/or guarantors under the Term Credit Agreement or Revolving Credit Agreement which would materially adversely affect Acquiror's ability to consummate the transaction contemplated by this Merger Agreement, would reasonably be expected to have an Acquiror Material Adverse Effect or would require a repayment of Indebtedness or would adversely affect the economics of the transactions contemplated herein for the Company, the Preferred Stockholders, the New Lenders or the New Guarantors (including, without limitation, through adversely affecting effecting or agreeing to effect or announcing an intention or proposal to effect, any acquisition, business combination, merger, consolidation, restructuring or similar transaction) that would or might reasonably be expected to prevent Acquiror or the rightsCompany from consummating the transactions contemplated hereby in accordance with the terms of this Agreement (regardless of whether such action would otherwise be permitted or not prohibited hereunder), interest including, without limitation, any action which may limit the ability of Acquiror or remedies with respect any documents, instruments, agreements the Company to consummate the transactions contemplated hereby as a result of antitrust or other arrangements regulatory concerns;
(5) take any action that would, or that is reasonably likely to, result in any of the representations and warranties of Acquiror set forth in Article V being untrue in any material respect as of the date made or any of the conditions to be entered into by the Preferred StockholdersMerger set forth herein not being satisfied;
(6) purchase, sell (other than through primary issuances) or trade (or announce any intention or proposal to purchase, sell or trade) any shares of Media Stock, or take any other action a principal purpose of which is to affect the New Lenders calculation of the Determination Price, other then pursuant to benefit plans in the ordinary course of business;
(7) sell all or substantially all of the New Guarantors with properties and assets of the Media Group (within the meaning of Section 2.4.1(B) of Article V of the Restated Certificate of Incorporation of Acquiror); or
(8) acquire, or agree to acquire, any Acquiror Subsidiary or Hughes shares of Company Capital Stock so long as, after giving effect to the Merger);
(▇) ▇▇ter into any Agreement which involves payments by Acquiror or any Acquiror Subsidiary in excess of $500,000 in any twelve (12) month period;
(q) make any change in any method of accounting or accounting practice or policy other than those required by GAAP or a Governmental Entity;
(r) vote in favor of, or otherwise consent to, the amendment, alteration, repeal or other modification of, or waive any right or obligation under, any provision of (i) the Amended and Restated Asset Sale Agreement dated January 8, 2001 between Motient Services Inc. and Mobile Satellite Ventures LLC (the "MSV Asset Sale Agreement") if such amendment, alteration, repeal or other modification would be reasonably expected to reduce the combined value purchase of the Acquiror's interests in Mobile Satellite Ventures LLC and Motient Services Inc. or (ii) the Amended and Restated Shareholders Agreement, dated as of August 8, 2000, by and among XMPut Shares pursuant to Section 9.4, Acquiror and other parties named therein;
(s) except as permitted by Section 5.05 hereof, take any action to exempt or make any Person or action (other would beneficially own less than the Company) not subject to the provisions of Section 203 of Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation; or
(t) authorize, or commit or agree to do any 10% of the foregoingCompany Capital Stock.
Appears in 1 contract
CONDUCT OF BUSINESS OF ACQUIROR. Acquiror hereby covenants From and agrees that, from after the date of this Merger Agreement until the Effective Time, Acquiror, except for obligations under Agreements in existence on earlier of the date Closing or the termination of this Merger Agreement in accordance with respect its terms, Acquiror shall, and shall cause its Subsidiaries to, as applicable, (x) keep current and timely file all of its public filings with the SEC and otherwise comply in all material respects with applicable securities Laws and shall use its commercially reasonable efforts to Mobile Satellite Ventures LLC maintain the listing of the Acquiror Common Shares and the Acquiror Warrants on Nasdaq and (y) except for the Proposed Satellite Restructuring, unless otherwise as expressly contemplated by this Merger Agreement or consented to in writing any Ancillary Document, as required by the Companyapplicable Law, which consent shall not be unreasonably withheld, will, and will cause as set forth on Section 5.14 of the Acquiror Subsidiaries toSchedules, carry on its and their respective businesses only in the Ordinary Course of Businesspursuant to any PIPE Financing and/or Alternative PIPE Financing, use their respective reasonable best efforts to preserve intact their business organizations and Assets, maintain their rights and franchises, retain the services of their officers and key employees and maintain their relationships with customers, suppliers, licensors, licensees and others having business dealings with them, and use their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained. Without limiting the generality of the foregoing, but subject to the exception for matters relating to Mobile Satellite Ventures LLC set forth in the immediately preceding sentence and except for the Proposed Satellite Restructuring, except as otherwise expressly contemplated by this Merger Agreement or as consented to in writing by the CompanyCompany (such consent, which consent shall other than in the case of (a), (b), (c), (d), or (g), not to be unreasonably withheld, from conditioned or delayed), not do any of the date of this Merger Agreement until the Effective Time Acquiror shall not, and shall not permit any Acquiror Subsidiary tofollowing:
(a) (i) increase in adopt any manner the compensation amendments, supplements, restatements or fringe benefits of, or pay any bonus to, any director, officer or employee, except for increases or bonuses in the Ordinary Course of Business to employees who are not directors or officers; (ii) grant any severance or termination pay to, or enter into any severance Agreement with, any director, officer or employee (other than pursuant modifications to the normal severance practices or existing Agreements of Acquiror or any Acquiror Subsidiary in effect on the date of this Merger Agreement), or enter into any employment Agreement, change of control Agreements or other similar Agreements or understanding with any director, officer or employee; (iii) establish, adopt, enter into or amend any Plan or Other Arrangement, except as may be required to comply with applicable Law; (iv) pay any material benefits not provided for under any Plan or Other Arrangement; (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Plan or Other Arrangement (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, Trust Agreement or the removal Governing Documents of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder) to any director, officer or employee, except as required under the Agreements set forth in Schedule 5.02(a)(v) of the Acquiror Disclosure Schedule to employees who are not officers or directors, or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Schedule 5.02(a)(vi) of the Acquiror Disclosure Schedule; provided, that, with the prior consent of Company (which consent shall not be unreasonably withheld), Acquiror may (x) agree to pay retention bonuses and (y) issue restricted shares of Acquiror Common Stock and/or Acquiror Stock Options to purchase Acquiror Common Stock for purposes of retaining employees; provided, further, that notwithstanding any other provision contained in this Section 5.02, Acquiror may issue after the date hereof stock options to purchase Acquiror Common Stock in the Ordinary Course of Business not in excess of an aggregate of 100,000 shares of Acquiror Common Stock underlying such options without the consent of the CompanyAcquiror;
(b) declare, set aside aside, make or pay any a dividend on, or make any other distribution or payment in respect of, any Equity Securities of Acquiror, or repurchase, redeem, or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any outstanding shares Equity Securities of capital stock Acquiror, other than dividends or other distributions declaredthan, set asidefor the avoidance of doubt, paid or made by any for the Acquiror Subsidiary to Acquiror or any wholly owned Acquiror SubsidiaryShareholder Redemption;
(ic) redeemincur, purchase create or otherwise acquire assume any shares of capital stock of Acquiror or any Acquiror Subsidiary or any securities or obligations convertible into or exchangeable Indebtedness for any shares of capital stock of Acquiror or any Acquiror Subsidiary, or any options, warrants or conversion or other rights to acquire any shares of capital stock of Acquiror or any Acquiror Subsidiary or any such securities or obligations, or any other securities thereof; (ii) effect any reorganization or recapitalization; or (iii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stockborrowed money;
(d) except (i) upon the exercise of Acquiror Stock Options make any loans or Acquiror Pre-Merger Warrants in accordance with their terms, and (ii) the issuance of options to purchase Acquiror Common Stock to the extent permitted under clause (a) above, issue, deliver, award, grant or selladvances to, or authorize the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) ofcapital contributions in, any shares of other Person, other than to, or in, Acquiror or any class of its capital stock (including shares held in treasury), any securities convertible into or exercisable or exchangeable for any such shares, or any rights, warrants or options to acquire any such shares, or amend or otherwise modify the terms of any such rights, warrants or options the effect of which shall be to make such terms more favorable to the holders thereofSubsidiaries;
(e) except as contemplated by Agreements set forth in Schedule 5.02(e) issue any Equity Securities of Acquiror or any of its Subsidiaries or grant any additional options, warrants or stock appreciation rights with respect to Equity Securities of the forgoing of any of Acquiror Disclosure Schedule, acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the Assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any Assets of any other Person (other than the purchase of assets from suppliers or vendors in the Ordinary Course of Business)its wholly-owned Subsidiaries;
(if) sellenter into, leaserenew, exchange, mortgage, pledge, transfer modify or otherwise subject to revise any Encumbrance or dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets Acquiror Related Party Transaction (or any shares of its capital stock Contract or any Acquiror XM Stock or any security or other right agreement that represents the right to acquire or receive, directly or indirectly, any capital stock of Acquiror or XM, or (ii) enter if entered into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any capital stock of Acquiror or XM, whether any such transaction described in (i) or (ii) above is to be settled by delivery of capital stock or such other securities or other rights, in cash or otherwise, and in the case of (i) and (ii), except for (x) Dispositions of immaterial assets not in excess of $500,000 in the aggregate and (y) sales of items of a nature reflected on the Acquiror Balance Sheet as cash equivalents or short term investments for fair market value (as determined in Acquiror's good faith judgment) in exchange for cash, cash equivalents or other short term investments; provided, that, notwithstanding any other provision contained in this Section 5.02, without the consent of the Company, Acquiror shall be permitted to sell (i) up to one (1) million shares of Acquiror XM Stock, or (ii) if the Second Closing (as defined in the Bridge Note Agreement) shall not have occurred for any reason, up to an additional two (2) million shares of Acquiror XM Stock; provided that Acquiror shall not be permitted to sell any of the additional two (2) million shares of Acquiror XM Stock contemplated in clause (ii) above until after July 1, 2001 and if all of the conditions set forth in Section 6.10 hereof and Section 3.02(f) of the Bridge Note Agreement are able to be satisfied; provided, further, that Acquiror shall use its reasonable best efforts to cause the conditions set forth in Section 6.10 and Section 3.02(f) of the Bridge Note Agreement to be satisfied; provided, further, that prior to the sale execution and delivery of any of the additional two (2) million shares of this Agreement would be an Acquiror XM Stock as contemplated by (ii) above, Acquiror shall deliver to the Company a certificate of its chief financial officer stating that the proceeds to be received by Acquiror upon the sale of such shares, after giving effect to Acquiror's then existing liquidity, are reasonably necessary for the business purposes of Acquiror promptly following receipt of such proceeds and containing a schedule setting forth in reasonable detail such intended usesRelated Party Transaction);
(g) authorize, recommend, propose or announce an intention to adopt any amendments to its articles a plan of complete or certificate of incorporation, bylaws partial liquidation or other comparable charter or organizational documents (other than the Restated Charter)dissolution;
(h) make amend or rescind any material election relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or elect to change any of its methods of reporting income or deductions for federal income tax purposes from those employed in modify the preparation of the federal income tax returns for the taxable year ended December 31, 2000, except in either case as may be required by Law, the IRS or GAAP;Trust Agreement; or
(i) make or agree to make any new capital expenditure or expenditures which are not included in Acquiror's 2001 capital budget, a copy of which was furnished to the Company, and which expenditures are, individually, in excess of $50,000 or, in the aggregate, in excess of $500,000;
(i) incur any Indebtedness for borrowed money (except for the transactions contemplated by the Bridge Note Documents) or guarantee any such Indebtedness of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), issue or sell any debt securities or warrants or other rights to acquire any debt securities of Acquiror or any Acquiror Subsidiary (other than indebtedness, securities or warrants or rights issued to Acquiror or a wholly owned Acquiror Subsidiary), guarantee any debt securities of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), enter into any "keep well" Contract to take, or other Agreement cause to maintain any financial statement condition of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary) or enter into any Agreement having the economic effect of be taken, any of the foregoing, except for short-term borrowings incurred actions set forth in the Ordinary Course of Business, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person other than intragroup loans, advances, capital contributions or investments between or among Acquiror and any of its wholly owned Acquiror Subsidiaries and other than (x) the extension of credit to customers of Acquiror or any Acquiror Subsidiary in the Ordinary Course of Business, (y) intragroup loans, advances, capital contributions or investments between or among Acquiror and any wholly owned Acquiror Subsidiary and (z) loans to employees in the Ordinary Course of Business;
(k) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute or contingent, matured or unmatured, known or unknown), other than the payment, discharge or satisfaction, in the Ordinary Course of Business or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent financial statement or incurred in the Ordinary Course of Business, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar Agreements to which Acquiror or any Acquiror Subsidiary is a party, or take any action that would adversely affect Acquiror's ability to repay or redeem the Discrepancy Notes;
(l) other than in the Ordinary Course of Business, pay, discharge, settle or satisfy any dispute with a customer or agree to reduce the amount owed by a customer or accept something in lieu of full payment owed by a customer, in each case involving an amount in dispute of more than $250,000 or more than $250,000 in payments, commitments or liabilities being reduced; provided, that, for purposes of this paragraph (l) only, Ordinary Course of Business shall not include any transactions, settlements or other arrangements (A) between Acquiror or any Acquiror Subsidiary and their respective affiliates with respect to payments for services rendered and (B) in which Acquiror or any Acquiror Subsidiary accepts equity securities of the customer in lieu of any payments, commitments or liabilities;
(m) forgive any loans owed to Acquiror or any Acquiror Subsidiary;
(n) except in the Ordinary Course of Business, waive, release or assign any rights or claims, or modify, amend or terminate any Agreement to which Acquiror or any Acquiror Subsidiary is a party;
(o) amend, alter, repeal or otherwise modify, or waive any right or obligation under, any consents, releases, waivers or other instrument obtained from banks and/or guarantors under the Term Credit Agreement or Revolving Credit Agreement which would materially adversely affect Acquiror's ability to consummate the transaction contemplated by this Merger Agreement, would reasonably be expected to have an Acquiror Material Adverse Effect or would require a repayment of Indebtedness or would adversely affect the economics of the transactions contemplated herein for the Company, the Preferred Stockholders, the New Lenders or the New Guarantors (including, without limitation, through adversely affecting the rights, interest or remedies with respect any documents, instruments, agreements or other arrangements to be entered into by the Preferred Stockholders, the New Lenders or the New Guarantors with Acquiror, any Acquiror Subsidiary or Hughes after giving effect to the Merger);
(▇) ▇▇ter into any Agreement which involves payments by Acquiror or any Acquiror Subsidiary in excess of $500,000 in any twelve (12) month period;
(q) make any change in any method of accounting or accounting practice or policy other than those required by GAAP or a Governmental Entity;
(r) vote in favor of, or otherwise consent to, the amendment, alteration, repeal or other modification of, or waive any right or obligation under, any provision of (i) the Amended and Restated Asset Sale Agreement dated January 8, 2001 between Motient Services Inc. and Mobile Satellite Ventures LLC (the "MSV Asset Sale Agreement") if such amendment, alteration, repeal or other modification would be reasonably expected to reduce the combined value of the Acquiror's interests in Mobile Satellite Ventures LLC and Motient Services Inc. or (ii) the Amended and Restated Shareholders Agreement, dated as of August 8, 2000, by and among XM, Acquiror and other parties named therein;
(s) except as permitted by Section 5.05 hereof, take any action to exempt or make any Person or action (other than the Company) not subject to the provisions of Section 203 of Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation; or
(t) authorize, or commit or agree to do any of the foregoingSection 5.14.
Appears in 1 contract
CONDUCT OF BUSINESS OF ACQUIROR. Except as may be necessary in the reasonable judgment of the Acquiror hereby covenants and agrees thatto carry out the Spin-Off, during the period from the date of this Merger Agreement until to the Effective TimeSecond Closing Date, Acquiror, except for obligations under Agreements in existence on the date of this Merger Agreement with respect to Mobile Satellite Ventures LLC and except for the Proposed Satellite Restructuring, unless otherwise expressly contemplated by this Merger Agreement or consented to in writing by the Company, which consent shall not be unreasonably withheld, will, and will cause the Acquiror and each of its U.S. Subsidiaries to, carry on its shall conduct their Domestic Businesses only according to their ordinary and their respective businesses only in the Ordinary Course usual course of Business, business consistent with past practice and use their respective commercially reasonable best efforts to preserve intact their business organizations and AssetsDomestic Business organizations, maintain their rights and franchises, retain keep available the services of their officers and key employees and maintain their satisfactory relationships and goodwill with customerslicensors, suppliers, licensorsdistributors, licensees customers, landlords, employees, agents and others having business dealings relationships with them, and use them in respect of their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintainedDomestic Businesses. Without limiting the generality of the foregoing, but subject to the exception for matters relating to Mobile Satellite Ventures LLC set forth in Notwithstanding the immediately preceding sentence sentence, prior to and except for including the Proposed Satellite RestructuringSecond Closing Date, except as otherwise expressly contemplated by this Merger Agreement or as consented to may be first approved in writing by the CompanyShareholders' Representative or as is otherwise permitted or required by this Agreement and except as may be necessary in the reasonable judgment of the Acquiror to carry out the Spin-Off, which consent the Acquiror and each U.S. Subsidiary shall not be unreasonably withheld, (a) refrain from amending or modifying the Acquiror's and each of its U.S. Subsidiaries Articles of Incorporation and/or By-Laws (or equivalent governing documents) from their respective forms on the date of this Merger Agreement until Agreement, (b) maintain at all times a sufficient amount of authorized but unissued common stock to consummate the Effective Time Acquiror shall nottransactions contemplated hereby, and shall not permit (c) refrain from issuing or selling any Acquiror Subsidiary to:
(a) (i) increase in any manner shares of the compensation or fringe benefits ofAcquiror's Preferred Stock, par value $1.00 per share, or pay issuing any bonus tosecurities convertible into, any directoror option, officer warrants or employee, except for increases rights to purchase or bonuses in the Ordinary Course of Business to employees who are not directors or officers; (ii) grant any severance or termination pay subscribe to, or enter entering into any severance Agreement witharrangement or contract with respect to the issue and sale of, any directorshares of the Acquiror's Preferred Stock, officer or employee (other than pursuant to d) refrain from increasing beyond the normal severance practices or existing Agreements of Acquiror or any Acquiror Subsidiary levels in effect on the date of this Merger Agreement)Agreement the compensation payable or to become payable by the Acquiror or any of its U.S. Subsidiaries to any officer, employee or enter into any employment Agreement, change agent of control Agreements the Domestic Businesses being paid or other similar Agreements who would be paid $60,000 per year or understanding with any director, officer or employee; (iii) establish, adopt, enter into or amend any Plan or Other Arrangementmore on the Domestic Businesses Balance Sheet Date, except as may for increases which are determined by the Acquiror or its U.S. Subsidiaries at year-end to be required to comply with applicable Law; (iv) pay any material benefits not provided for under any Plan or Other Arrangement; (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Plan or Other Arrangement (including in the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder) to any director, officer or employee, except as required under the Agreements set forth in Schedule 5.02(a)(v) best interests of the Acquiror Disclosure Schedule to employees who and are not officers or directors, or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Schedule 5.02(a)(vi) of the Acquiror Disclosure Schedule; provided, that, with the prior consent of Company (which consent shall not be unreasonably withheld), Acquiror may (x) agree to pay retention bonuses and (y) issue restricted shares of Acquiror Common Stock and/or Acquiror Stock Options to purchase Acquiror Common Stock for purposes of retaining employees; provided, further, that notwithstanding any other provision contained in this Section 5.02, Acquiror may issue after the date hereof stock options to purchase Acquiror Common Stock made in the Ordinary Course ordinary course of Business not business and are consistent with past practice, (e) refrain from entering into any contract or commitment, including charters in respect of COURIER, PATRIOT or ROVER in excess of an aggregate three months, charters out in excess three months of 100,000 shares of Acquiror Common Stock underlying such options without the consent of the Company;
(b) declare, set aside or pay any dividend on, or make any other distribution in respect of, outstanding shares of capital stock other than dividends or other distributions declared, set aside, paid or made by any Acquiror Subsidiary to Acquiror or any wholly owned Acquiror Subsidiary;
(i) redeem, purchase or otherwise acquire any shares of capital stock of Acquiror or any Acquiror Subsidiary or any securities or obligations convertible into or exchangeable for any shares of capital stock of Acquiror or any Acquiror Subsidiary, or any options, warrants or conversion or other rights to acquire any shares of capital stock of Acquiror or any Acquiror Subsidiary or any such securities or obligations, or any other securities thereof; (ii) effect any reorganization or recapitalization; or (iii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance OMI Petrolink Corp.'s vessels and charters in of any other securities additional vessels by OMI Petrolink Corp. in respect ofexcess of three months, in lieu of or in substitution for, shares of its capital stock;
(d) except (i) upon the exercise of Acquiror Stock Options or Acquiror Pre-Merger Warrants in accordance with their terms, and (ii) the issuance of options to purchase Acquiror Common Stock to the extent permitted under clause (a) above, issue, deliver, award, grant or sell, or authorize the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) of, any shares of any class of its capital stock (including shares held in treasury), any securities convertible into or exercisable or exchangeable for any such shares, or any rights, warrants or options to acquire any such shares, or amend or otherwise modify the terms of any such rights, warrants or options the effect of which shall be to make such terms more favorable to the holders thereof;
(e) except as contemplated by Agreements set forth in Schedule 5.02(e) of the Acquiror Disclosure Schedule, acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the Assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any Assets of any other Person (other than the purchase of assets from suppliers or vendors contracts in the Ordinary Course ordinary course of Business);
business consistent with past practice, (if) sell, lease, exchange, mortgage, pledge, transfer or otherwise subject cause the Domestic Businesses to any Encumbrance or dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets or any shares of its capital stock or any Acquiror XM Stock or any security or other right that represents the right to acquire or receive, directly or indirectly, any capital stock of Acquiror or XM, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, refrain from taking any of the economic consequences actions of ownership of any capital stock of Acquiror or XM, whether any such transaction described the type referred to in Section 5.24 (i) or (ii) above is to be settled by delivery of capital stock or such other securities or other rights, in cash or otherwise, and in the case of (i) and (iiexcept as expressly permitted thereby), except for (x) Dispositions of immaterial assets not in excess of $500,000 in the aggregate and (y) sales of items of a nature reflected on the Acquiror Balance Sheet as cash equivalents or short term investments for fair market value (as determined in Acquiror's good faith judgment) in exchange for cash, cash equivalents or other short term investments; provided, that, notwithstanding any other provision contained in this Section 5.02, without the consent of the Company, Acquiror shall be permitted to sell (i) up to one (1) million shares of Acquiror XM Stock, or (ii) if the Second Closing (as defined in the Bridge Note Agreement) shall not have occurred for any reason, up to an additional two (2) million shares of Acquiror XM Stock; provided that Acquiror shall not be permitted to sell any of the additional two (2) million shares of Acquiror XM Stock contemplated in clause (ii) above until after July 1, 2001 and if all of the conditions set forth in Section 6.10 hereof and Section 3.02(f) of the Bridge Note Agreement are able to be satisfied; provided, further, that Acquiror shall use its reasonable best efforts to cause the conditions set forth in Section 6.10 and Section 3.02(f) of the Bridge Note Agreement to be satisfied; provided, further, that prior to the sale of any of the additional two (2) million shares of Acquiror XM Stock as contemplated by (ii) above, Acquiror shall deliver to the Company a certificate of its chief financial officer stating that the proceeds to be received by Acquiror upon the sale of such shares, after giving effect to Acquiror's then existing liquidity, are reasonably necessary for the business purposes of Acquiror promptly following receipt of such proceeds and containing a schedule setting forth in reasonable detail such intended uses;
(g) adopt any amendments to its articles or certificate of incorporation, bylaws or other comparable charter or organizational documents (other than the Restated Charter);
(h) make or rescind any material election relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or elect to change any of its methods of reporting income or deductions for federal income tax purposes refrain from those employed agreeing in the preparation of the federal income tax returns for the taxable year ended December 31, 2000, except in either case as may be required by Law, the IRS or GAAP;
(i) make or agree to make any new capital expenditure or expenditures which are not included in Acquiror's 2001 capital budget, a copy of which was furnished to the Company, and which expenditures are, individually, in excess of $50,000 or, in the aggregate, in excess of $500,000;
(i) incur any Indebtedness for borrowed money (except for the transactions contemplated by the Bridge Note Documents) or guarantee any such Indebtedness of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), issue or sell any debt securities or warrants or other rights to acquire any debt securities of Acquiror or any Acquiror Subsidiary (other than indebtedness, securities or warrants or rights issued to Acquiror or a wholly owned Acquiror Subsidiary), guarantee any debt securities of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), enter into any "keep well" or other Agreement to maintain any financial statement condition of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary) or enter into any Agreement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the Ordinary Course of Business, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person other than intragroup loans, advances, capital contributions or investments between or among Acquiror and any of its wholly owned Acquiror Subsidiaries and other than (x) the extension of credit to customers of Acquiror or any Acquiror Subsidiary in the Ordinary Course of Business, (y) intragroup loans, advances, capital contributions or investments between or among Acquiror and any wholly owned Acquiror Subsidiary and (z) loans to employees in the Ordinary Course of Business;
(k) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute or contingent, matured or unmatured, known or unknown), other than the payment, discharge or satisfaction, in the Ordinary Course of Business or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent financial statement or incurred in the Ordinary Course of Business, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar Agreements to which Acquiror or any Acquiror Subsidiary is a party, or take any action that would adversely affect Acquiror's ability to repay or redeem the Discrepancy Notes;
(l) other than in the Ordinary Course of Business, pay, discharge, settle or satisfy any dispute with a customer or agree to reduce the amount owed by a customer or accept something in lieu of full payment owed by a customer, in each case involving an amount in dispute of more than $250,000 or more than $250,000 in payments, commitments or liabilities being reduced; provided, that, for purposes of this paragraph (l) only, Ordinary Course of Business shall not include any transactions, settlements or other arrangements (A) between Acquiror or any Acquiror Subsidiary and their respective affiliates with respect to payments for services rendered and (B) in which Acquiror or any Acquiror Subsidiary accepts equity securities of the customer in lieu of any payments, commitments or liabilities;
(m) forgive any loans owed to Acquiror or any Acquiror Subsidiary;
(n) except in the Ordinary Course of Business, waive, release or assign any rights or claims, or modify, amend or terminate any Agreement to which Acquiror or any Acquiror Subsidiary is a party;
(o) amend, alter, repeal or otherwise modify, or waive any right or obligation under, any consents, releases, waivers or other instrument obtained from banks and/or guarantors under the Term Credit Agreement or Revolving Credit Agreement which would materially adversely affect Acquiror's ability to consummate the transaction contemplated by this Merger Agreement, would reasonably be expected to have an Acquiror Material Adverse Effect or would require a repayment of Indebtedness or would adversely affect the economics of the transactions contemplated herein for the Company, the Preferred Stockholders, the New Lenders or the New Guarantors (including, without limitation, through adversely affecting the rights, interest or remedies with respect any documents, instruments, agreements or other arrangements to be entered into by the Preferred Stockholders, the New Lenders or the New Guarantors with Acquiror, any Acquiror Subsidiary or Hughes after giving effect to the Merger);
(▇) ▇▇ter into any Agreement which involves payments by Acquiror or any Acquiror Subsidiary in excess of $500,000 in any twelve (12) month period;
(q) make any change in any method of accounting or accounting practice or policy other than those required by GAAP or a Governmental Entity;
(r) vote in favor of, or otherwise consent to, the amendment, alteration, repeal or other modification of, or waive any right or obligation under, any provision of (i) the Amended and Restated Asset Sale Agreement dated January 8, 2001 between Motient Services Inc. and Mobile Satellite Ventures LLC (the "MSV Asset Sale Agreement") if such amendment, alteration, repeal or other modification would be reasonably expected to reduce the combined value of the Acquiror's interests in Mobile Satellite Ventures LLC and Motient Services Inc. or (ii) the Amended and Restated Shareholders Agreement, dated as of August 8, 2000, by and among XM, Acquiror and other parties named therein;
(s) except as permitted by Section 5.05 hereof, take any action to exempt or make any Person or action (other than the Company) not subject to the provisions of Section 203 of Delaware Law or any other potentially applicable anti-takeover or similar statute or regulation; or
(t) authorize, or commit or agree writing to do any of the foregoing. During the period from the date of this Agreement to the Second Closing Date, Acquiror shall confer on a regular and frequent basis with the Company to report operational matters in respect of its domestic operations and to report the general status of ongoing domestic operations. The Acquiror shall notify the Company of any unexpected emergency or other change in the normal course of the business of the Domestic Businesses or in the operation of their properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), adjudicatory proceedings, budget meetings or submissions involving any material property of the Domestic Businesses, and keep the Company fully informed of such events and permit its representatives prompt access to all materials prepared in connection therewith. Acquiror shall also provide the Company with advance written notice of any proposed changes to the Distribution Agreement, Corporate Restructuring Transactions (as defined in the Distribution Agreement) or Ancillary Agreements (as defined in the Distribution Agreement) whether or not such proposed changes require the consent of the Shareholders' Representative.
Appears in 1 contract
Sources: Acquisition Agreement (Omi Corp)
CONDUCT OF BUSINESS OF ACQUIROR. Acquiror hereby covenants covenant and agrees that, from the date of this Merger Agreement agree that until the Effective Time, Acquirorearlier of the Termination Date and the Closing Date:
(a) Acquiror will carry on its business in the ordinary course and consistent with past practice, except for obligations under Agreements as otherwise contemplated in existence this Agreement, and Acquiror shall use its commercially reasonable efforts to maintain and preserve its business, assets and business relationships;
(b) Acquiror will at all times comply with Policy 2.4 – Capital Pool Companies of the TSXV’s corporate finance manual while the Acquiror Shares are listed on the date TSXV;
(c) Acquiror will cause Merger Sub to be formed in a timely manner in order to facilitate the Transaction and enter into such other agreements as may be necessary to effect the Transaction in reliance upon Section 2.11 Business combination and reorganization and/or Section 2.16 Take- over bid and issuer bid of National Instrument 45-106 Prospectus Exemptions;
(d) Acquiror shall maintain its Books and Records in the usual, regular and ordinary manner, on a basis consistent with prior practices and will comply with all laws, rules and regulations applicable to it and to the conduct of its business and will not do any act, or omit to do any act which will cause a breach of any material commitments of obligations;
(e) Acquiror shall do all such acts and things necessary to ensure that all of the representations and warranties of Acquiror contained in this Merger Agreement with respect to Mobile Satellite Ventures LLC remain true and except for the Proposed Satellite Restructuring, correct and not do any such act or thing that would render any representation or warranty of Acquiror untrue or incorrect; and
(f) Acquiror shall not (unless otherwise expressly contemplated by in this Merger Agreement or consented with the prior written consent of the Target, such consent not to in writing by the Company, which consent shall not be unreasonably withheld):
(i) merge into or with, willor amalgamate or consolidate with, and will cause or enter into any other corporate reorganization with, any other corporation or person or perform any act or enter into any transaction or negotiation which interferes or is inconsistent with the Acquiror Subsidiaries tocompletion of the transactions contemplated hereby, carry on its and their respective businesses only other than as contemplated in the Ordinary Course of Businessthis Agreement and, use their respective reasonable best efforts to preserve intact their business organizations and Assets, maintain their rights and franchises, retain the services of their officers and key employees and maintain their relationships with customers, suppliers, licensors, licensees and others having business dealings with them, and use their respective reasonable best efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained. Without without limiting the generality of the foregoing, but subject Acquiror will not:
(A) except pursuant to the exception for matters relating to Mobile Satellite Ventures LLC set forth exercise of the Agent’s Warrants or the Acquiror Options or in furtherance of the immediately preceding sentence and except for the Proposed Satellite Restructuring, except as otherwise expressly transactions contemplated by this Merger Agreement Agreement, allot, reserve, set aside issue, sell, pledge, hypothecate, lease, dispose of or encumber any shares of any class or other securities or any right, option, call, or warrant with respect thereto or enter into any agreements for the future issuance of securities; or
(B) split, combine, reclassify any of its securities or declare or make any Distribution;
(ii) alter or amend its Constating Documents as consented to in writing by the Company, which consent shall not be unreasonably withheld, from same exist at the date of this Merger Agreement until Agreement, other than to effect a change of the Effective Time Acquiror shall not, and shall not permit any Acquiror Subsidiary to:Acquiror’s name as requested by the Target;
(aiii) (i) increase engage in any manner business, enterprise or other activity different from that carried on by it at the compensation or fringe benefits of, or pay any bonus to, any director, officer or employee, except for increases or bonuses in the Ordinary Course date of Business to employees who are not directors or officers; (ii) grant any severance or termination pay to, this Agreement or enter into any severance Agreement withtransaction or incur (except in respect of obligations or liabilities to which it is already legally subject) any obligation, any director, officer expenditure or employee (liability other than pursuant obligations, expenditures and liabilities relating to the normal severance practices or existing Agreements maintenance of its corporate existence, delisting of the Acquiror or any Shares from the TSXV, application for listing of the Acquiror Subsidiary in effect Shares on the date of this Merger Agreement), CSE or enter into any employment Agreement, change of control Agreements or other similar Agreements or understanding reasonable costs incurred in connection with any director, officer or employee; the Transaction;
(iiiiv) establish, adopt, enter into or amend any Plan employment or Other Arrangementconsulting agreements or service contracts with any director, except as may be required officer, employee or consultant or create or amend any employee benefit plan, or otherwise make any changes in compensation, bonuses, fees or benefits to comply with applicable Law; (iv) pay any material benefits not provided for under any Plan such directors, officers, employees or Other Arrangement; consultants;
(v) grant make any awards under any bonuscapital expenditures, incentive, performance additions or other compensation plan improvements or arrangement commitments for the same which individually or Plan or Other Arrangement in the aggregate exceed ten thousand dollars (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any Plan or Other Arrangement or Agreement or awards made thereunder) to any director, officer or employee, except as required under the Agreements set forth in Schedule 5.02(a)(v) of the Acquiror Disclosure Schedule to employees who are not officers or directors, or $10,000);
(vi) take make any action loan or advance to fund any Person or in any other way secure guarantee the payment of compensation or benefits under any Agreement, except as required under the Agreements set forth in Schedule 5.02(a)(vi) indebtedness of the Acquiror Disclosure Schedule; provided, that, with the prior consent of Company (which consent shall not be unreasonably withheld), Acquiror may (x) agree to pay retention bonuses and (y) issue restricted shares of Acquiror Common Stock and/or Acquiror Stock Options to purchase Acquiror Common Stock for purposes of retaining employees; provided, further, that notwithstanding any other provision contained in this Section 5.02, Acquiror may issue after the date hereof stock options to purchase Acquiror Common Stock in the Ordinary Course of Business not in excess of an aggregate of 100,000 shares of Acquiror Common Stock underlying such options without the consent of the Companyanother Person;
(bvii) declare, set aside or pay any dividend on, or make any other distribution in respect of, outstanding shares of capital stock other than dividends or other distributions declared, set aside, paid or made by any Acquiror Subsidiary pursuant to Acquiror or any wholly owned Acquiror Subsidiary;
(i) redeem, purchase or otherwise acquire any shares of capital stock of Acquiror or any Acquiror Subsidiary or any securities or obligations convertible into or exchangeable for any shares of capital stock of Acquiror or any Acquiror Subsidiary, or any options, warrants or conversion or other rights to acquire any shares of capital stock of Acquiror or any Acquiror Subsidiary or any such securities or obligations, or any other securities thereof; (ii) effect any reorganization or recapitalization; or (iii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock;
(d) except (i) upon the exercise of Acquiror Stock Options or Acquiror Pre-Merger Warrants in accordance with their terms, and (ii) the issuance of options to purchase Acquiror Common Stock to the extent permitted under clause (a) above, issue, deliver, award, grant or sell, or authorize the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other Encumbrances) of, any shares of any class of its capital stock (including shares held in treasury), any securities convertible into or exercisable or exchangeable for any such shares, or any rights, warrants or options to acquire any such shares, or amend or otherwise modify the terms of any such rights, warrants or options the effect of which shall be to make such terms more favorable to the holders thereof;
(e) except as contemplated by Agreements set forth in Schedule 5.02(e) of the Acquiror Disclosure Schedulethis Agreement, acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the Assets of, or by acquire any other manner, any business or any corporation, partnership, association Person or other business organization or division thereof, or otherwise acquire or agree to acquire any Assets of any other Person (other than the purchase of assets from suppliers or vendors in the Ordinary Course of Business)material assets;
(iviii) sellenter into, leaserenegotiate, exchangeamend, mortgagemodify, pledgefail to renew or terminate any material agreements or waive, release, assign, grant or transfer any material right or otherwise subject to claim thereunder;
(ix) create or amend any Encumbrance stock option, bonus or dispose ofother compensation plan, pay any bonuses or make any awards of cash, stock or other, deferred or otherwise, grant any stock options, or agree defer any compensation to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any Encumbrance or dispose of, any of its Assets directors or officers;
(x) make any shares of its capital stock material change in accounting procedures or any Acquiror XM Stock or any security or other right that represents the right to acquire or receive, directly or indirectly, any capital stock of Acquiror or XM, or practices;
(iixi) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any capital stock of Acquiror or XM, whether any such transaction described in (i) or (ii) above is to be settled by delivery of capital stock or such other securities or other rights, in cash or otherwise, and in the case of (i) and (ii), except for (x) Dispositions of immaterial assets not in excess of $500,000 in the aggregate and (y) sales of items of a nature reflected on the Acquiror Balance Sheet as cash equivalents or short term investments for fair market value (as determined in Acquiror's good faith judgment) in exchange for cash, cash equivalents or other short term investments; provided, that, notwithstanding any other provision contained in this Section 5.02, without the consent of the Company, Acquiror shall be permitted to sell (i) up to one (1) million shares of Acquiror XM Stock, or (ii) if the Second Closing (as defined in the Bridge Note Agreement) shall not have occurred for any reason, up to an additional two (2) million shares of Acquiror XM Stock; provided that Acquiror shall not be permitted to sell any of the additional two (2) million shares of Acquiror XM Stock contemplated in clause (ii) above until after July 1, 2001 and if all of the conditions set forth in Section 6.10 hereof and Section 3.02(f) of the Bridge Note Agreement are able to be satisfied; provided, further, that Acquiror shall use its reasonable best efforts to cause the conditions set forth in Section 6.10 and Section 3.02(f) of the Bridge Note Agreement to be satisfied; provided, further, that prior to the sale of any of the additional two (2) million shares of Acquiror XM Stock as contemplated by (ii) above, Acquiror shall deliver to the Company a certificate of its chief financial officer stating that the proceeds to be received by Acquiror upon the sale of such shares, after giving effect to Acquiror's then existing liquidity, are reasonably necessary for the business purposes of Acquiror promptly following receipt of such proceeds and containing a schedule setting forth in reasonable detail such intended usesrelated party transaction;
(gxii) adopt mortgage, pledge or hypothecate any amendments of its assets or subject any of its assets to its articles or certificate of incorporation, bylaws or other comparable charter or organizational documents (other than the Restated Charter)any Encumbrance;
(hxiii) make discharge, satisfy or rescind pay any material election relating to Taxes, settle or compromise Encumbrance of any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or elect to change any of its methods of reporting income or deductions for federal income tax purposes from those employed kind whatsoever other than current liabilities in the preparation ordinary course of the federal income tax returns for the taxable year ended December 31, 2000, except in either case as may be required by Law, the IRS or GAAPbusiness;
(i) make or agree to make any new capital expenditure or expenditures which are not included in Acquiror's 2001 capital budget, a copy of which was furnished to the Company, and which expenditures are, individually, in excess of $50,000 or, in the aggregate, in excess of $500,000;
(i) incur any Indebtedness for borrowed money (except for the transactions contemplated by the Bridge Note Documents) or guarantee any such Indebtedness of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), issue or sell any debt securities or warrants or other rights to acquire any debt securities of Acquiror or any Acquiror Subsidiary (other than indebtedness, securities or warrants or rights issued to Acquiror or a wholly owned Acquiror Subsidiary), guarantee any debt securities of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary), enter into any "keep well" or other Agreement to maintain any financial statement condition of another Person (other than Acquiror or any wholly owned Acquiror Subsidiary) or enter into any Agreement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the Ordinary Course of Business, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person other than intragroup loans, advances, capital contributions or investments between or among Acquiror and any of its wholly owned Acquiror Subsidiaries and other than (x) the extension of credit to customers of Acquiror or any Acquiror Subsidiary in the Ordinary Course of Business, (y) intragroup loans, advances, capital contributions or investments between or among Acquiror and any wholly owned Acquiror Subsidiary and (z) loans to employees in the Ordinary Course of Business;
(k) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute or contingent, matured or unmatured, known or unknown), other than the payment, discharge or satisfaction, in the Ordinary Course of Business or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent financial statement or incurred in the Ordinary Course of Business, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar Agreements to which Acquiror or any Acquiror Subsidiary is a party, or take any action that would adversely affect Acquiror's ability to repay or redeem the Discrepancy Notes;
(lxiv) other than in the Ordinary Course ordinary course of Businessbusiness, pay, discharge, settle enter into any agreement or satisfy arrangement granting any dispute with a customer rights to purchase or agree to reduce lease any of its assets or rights or requiring the amount owed by a customer or accept something in lieu of full payment owed by a customer, in each case involving an amount in dispute of more than $250,000 or more than $250,000 in payments, commitments or liabilities being reduced; provided, that, for purposes of this paragraph (l) only, Ordinary Course of Business shall not include any transactions, settlements or other arrangements (A) between Acquiror or any Acquiror Subsidiary and their respective affiliates with respect to payments for services rendered and (B) in which Acquiror or any Acquiror Subsidiary accepts equity securities of the customer in lieu consent of any paymentsPerson to the transfer, commitments assignment or liabilitieslease of any such assets or rights;
(mxv) forgive dispose, sell, lease, sublease, assign or transfer (by tender offer, exchange offer, merger, amalgamation, sale of shares or assets or otherwise) any loans owed to Acquiror or any Acquiror Subsidiaryof its assets;
(nxvi) except enter into any agreement resulting in the Ordinary Course a Change of BusinessControl of Acquiror, waive, release or assign any rights or claims, or modify, amend or terminate any other than this Agreement to which Acquiror or any Acquiror Subsidiary is a partyagreement entered into in relation to the Financing;
(oxvii) amend, alter, repeal or otherwise modify, or waive settle any right or obligation under, any consents, releases, waivers or other instrument obtained from banks and/or guarantors under the Term Credit Agreement or Revolving Credit Agreement which would materially adversely affect Acquiror's ability to consummate the transaction contemplated by this Merger Agreement, would reasonably be expected to have an Acquiror Material Adverse Effect or would require a repayment of Indebtedness or would adversely affect the economics of the transactions contemplated herein for the Company, the Preferred Stockholders, the New Lenders or the New Guarantors (including, without limitation, through adversely affecting the rights, interest or remedies with respect any documents, instruments, agreements or other arrangements to be entered into by the Preferred Stockholders, the New Lenders or the New Guarantors with Acquiror, any Acquiror Subsidiary or Hughes after giving effect to the Merger);
(▇) ▇▇ter into any Agreement which involves payments by Acquiror or any Acquiror Subsidiary in excess of $500,000 in any twelve (12) month period;
(q) make any change in any method of accounting or accounting practice or policy other than those required by GAAP or a Governmental Entity;
(r) vote in favor of, or otherwise consent to, the amendment, alteration, repeal or other modification of, or waive any right or obligation under, any provision of (i) the Amended and Restated Asset Sale Agreement dated January 8, 2001 between Motient Services Inc. and Mobile Satellite Ventures LLC (the "MSV Asset Sale Agreement") if such amendment, alteration, repeal or other modification would be reasonably expected to reduce the combined value of the Acquiror's interests in Mobile Satellite Ventures LLC and Motient Services Inc. or (ii) the Amended and Restated Shareholders Agreement, dated as of August 8, 2000, by and among XM, Acquiror and other parties named therein;
(s) except as permitted by Section 5.05 hereof, take any action to exempt or make any Person or action (other than the Company) not subject to the provisions of Section 203 of Delaware Law or any other potentially applicable anti-takeover or similar statute or regulationoutstanding Proceeding; or
(txviii) authorize, enter into any agreement or commit or agree understanding to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement