Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter: (a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary; (b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries; (c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing; (d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries; (e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and (f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 4 contracts
Sources: Merger Agreement (Tenet Healthcare Corp), Merger Agreement (Littlejohn Joseph & Levy Fund L P), Merger Agreement (Ornda Healthcorp)
Conduct of Business Pending the Merger. Except as otherwise expressly contemplated by this Agreement, required by law or disclosed in Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From 5.01 of the Company Disclosure Schedule, after the date of this Agreement hereof and prior to the Effective Time, unless Parent without Parent's consent (which consent shall otherwise agree in writingnot be unreasonably withheld), or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Lettershall, and shall cause its Subsidiaries to:
(a) the conduct their respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell amend or pledge propose to amend their respective certificates of incorporation or agree to sell bylaws or pledge any stock owned by it in any equivalent constitutional documents (or the CVR Trust's certificate of the Company Subsidiaries; formation or declaration of trust), (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its their outstanding capital stock or (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or propertyotherwise, except for the payment of dividends or redeem distributions to the Company or otherwise acquire any shares of its capital stock or shares of the capital stock of any a Subsidiary of the Company Subsidiariesby another Subsidiary of the Company;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuancenot issue, issue sell, pledge or sell dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that the Company may issue shares of capital stock of the Company (whether through A) upon exercise of Company Options outstanding on May 31, 2003 and (B) as required by the issuance 401(k) Plan, the ESPP, the Directors' Plan, the DCP and the Company Rights Agreement as in effect on the date hereof;
(d) not (i) incur or granting become contingently liable with respect to any indebtedness for borrowed money (including, for the sake of optionsclarity, warrantsany letters of credit), commitmentsother than borrowings in the ordinary course of business or borrowings to fund working capital needs in the ordinary course of business under the existing credit facilities of the Company or any of its Subsidiaries on the terms of those facilities as they exist on the date of this Agreement (the "Existing Credit Facilities") in an aggregate amount for all such permitted borrowings not to exceed $20,000,000 for any consecutive four business day period, subscriptions(ii) redeem, rights purchase, acquire or offer to purchase or otherwise)acquire any shares of its capital stock or any options, except warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for (a) unissued Shares reserved for issuance upon its capital stock other than in connection with the exercise of Employee Stock Options, (b) Shares to be issued outstanding Company Options pursuant to the Warrant terms of the Company Option Plans and the relevant written agreements evidencing the grant of Company Options, or to use for the 401(k) Plan, the ESPP or the Directors' Plan, (iii) make any material acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business with a value that is less than (A) $2,500,000 in the aggregate during the forty-five (45) day period commencing on the date of this Agreement and (cB) $5,000,000 in the Employee Shares; aggregate during the ninety (90) day period commencing on the date of this Agreement or (iv) sell, pledge, lease, license dispose of or encumber any material assets or businesses other than (A) any such transactions disclosed in Section 5.01 of the Company Disclosure Schedule, (B) pledges or encumbrances pursuant to Existing Credit Facilities or (C) sales of inventory and other current assets in the ordinary course of business consistent with past practices.
(e) use reasonable best efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees (other than terminations of services for cause), and preserve the goodwill and business relationships with customers and others having business relationships with them;
(f) not enter into or amend or modify any employment, consulting, severance, retirement or special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees or with any other persons, except (i) as required by previously existing contractual arrangements or applicable law or (ii) acquireother employment agreements entered into with a person who is hired or promoted by the Company or one of its Subsidiaries after the date hereof in the ordinary course of business whose annual base salary does not exceed $175,000;
(g) not increase the salary, dispose bonus, benefits or other compensation of any person except for increases in the ordinary course of business consistent with past practice or except pursuant to contractual arrangements existing on the date of this Agreement;
(h) not adopt, enter into or amend or modify, in each of the latter two cases to materially increase benefits or obligations of any Company Employee Benefit Plan, except as required pursuant to existing contractual arrangements, this Agreement or applicable law;
(i) (A) not enter into any new contract or commitment providing for the purchase of goods or services by the Company or any of its Subsidiaries that is inconsistent with the Company's April 2003 forecast (a true, accurate, complete and current copy of which has been provided to Parent prior to the date of this Agreement) or has a term of more than one year and which is reasonably expected to involve payments to retailers of more than $3,000,000 per annum or payments to other third parties of more than $750,000 in the aggregate for such contract or commitment, (B) not amend, modify or change in any material respect, or waive any material rights of the Company or any of its Subsidiaries or any material obligation of any third party under, any contract listed in Section 4.11 of the Company Disclosure Schedule;
(j) not make, change or revoke any material Tax election unless required by law or make any agreement or settlement with any taxing authority regarding any material amount of Taxes or which is reasonably likely to materially increase the obligations of the Company or the Surviving Corporation to pay Taxes in the future;
(k) not defer the payment of accounts or trade payables, or seek to accelerate the payment of, transferor factor or otherwise similarly monetize, leaseaccounts or trade receivables, licenseof the Company or any of its Subsidiaries, mortgagein either such case beyond or in advance (as the case may be) of the customary payment periods of the Company, pledge such Subsidiary(ies) or encumber such third parties for those payables or receivables;
(l) not enter into any fixed interest rate, currency or other assets in excess of $5,000,000 in any one swap or a series of related transactions derivative transaction, other than in the ordinary course of business and consistent with past practices; practices and for bona fide hedging purposes;
(iiim) incurnot take any action that would make any representation or warranty of the Company inaccurate in any material respect at any time before the Effective Time;
(n) not (i) propose or make, assume or prepay engage in any indebtedness discussions or negotiations with respect to, any other material liabilities other than Settlement Decision (as defined in the ordinary course of business and consistent with past practices; (ivCVR Agreement) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viiiii) enter into any contract, confidentiality agreement with any third party to the Litigation (as defined in the CVR Agreement) with respect thereto; or
(o) not enter into an agreement, commitment or arrangement with respect to any of the foregoing;
(d) . Without limiting the foregoing, after the date hereof and prior to the Effective Time, without Parent's consent the Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employeesnot, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company shall not permit its Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employeesto, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan contract or amend in any material respect any existing Plancommitment providing for the outsourcing to third parties of software development, data processing, information technology operations or make any loans services or analytical services and which is reasonably expected to any involve payments to third parties of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other more than (i) $750,000 in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law aggregate for such contract or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codecommitment.
Appears in 3 contracts
Sources: Merger Agreement (Information Resources Inc), Merger Agreement (Information Resources Inc), Merger Agreement (Information Resources Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER6.1. From Conduct of Business by Target Pending the Merger. Target covenants and agrees that, between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, or the business of Target shall be conducted only in, and Target shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and Target shall use its best efforts to preserve substantially intact the business organization of Target, to keep available the services of the present officers, employees and consultants of Target and to preserve the present relationships of Target with customers, suppliers and other persons with which Target has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, Target shall not, directly or any Exhibit heretoindirectly, do, or propose to do, any of the Company Disclosure Letterfollowing without the prior written consent of Parent, which consent shall not be unreasonably withheld:
(a) the respective businesses amend or otherwise change its Articles of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company Incorporation or any Company SubsidiaryBylaws or equivalent organizational documents;
(b) Company shall not issue, sell, pledge, dispose of, encumber or authorize the issuance, sale, pledge, disposition or encumbrance of (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofclass, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof capital stock, its capital stock or any other ownership interest, of any class (whether through the issuance Target or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge any assets of Target or encumber any fixed or other material assets in excess of $5,000,000 in any one or a series of related transactions Target other than in the ordinary course of business and consistent with past practices; ;
(iiic) incurdeclare, assume set aside, make or prepay pay any indebtedness dividend or any other material liabilities other than distribution, payable in the ordinary course of business and consistent with past practices; (iv) assumecash, guaranteestock, endorse or otherwise become liable or responsible (whether directly, contingently property or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoingits capital stock;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiariesreclassify, to keep available the services combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiariescapital stock;
(ei) neither Company nor acquire (by merger, consolidation or acquisition of stock or assets) any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officerscorporation, directors or employees, enter into or amend any employment, severance, termination partnership or other similar agreementbusiness organization or division thereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, adopt guaranty or endorse or otherwise as an accommodation become responsible for, the obligations of any new Plan or amend in any material respect any existing Planperson, or make any loans to any of its officersor advances, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) except in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and ; (iii) authorize any single capital expenditure which is in excess of $1,000 or capital expenditures which are, in the granting aggregate, in excess of retention bonuses $3,000 for Target; or (iv) enter into or amend any contract, agreement, commitment or arrangement to certain officers and employees any of the effects set forth in an aggregate amount not to exceed $2,000,000; andthis paragraph (e) of Section 6.1;
(f) neither Company nor increase the compensation payable or to become payable to its officers or employees, except for increases in salary or wages of employees of Target who are not officers of Target in accordance with past practices, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director or officer of Target, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the Company Subsidiaries shall benefit of any directors, officers or employees;
(g) take any action other than in the ordinary course of business and in a manner consistent with past practice with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payments of accounts payable and collection of accounts receivable);
(h) settle or compromise any material federal, state, local or foreign income tax liability; or
(i) knowingly take pay, discharge, compromise or allow consent to be taken any action which would jeopardize arrangements concerning or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the treatment payment, discharge, compromise, settlement, arrangement or satisfaction in the ordinary course of Parent's acquisition business and consistent with past practice of Company as a pooling liabilities reflected or reserved against in the financial statements of interests for accounting purposes; Target or (ii) knowingly take any action that would jeopardize qualification incurred in the ordinary course of business and consistent with past practice.
Section 6.2. Conduct of Business by Parent and Acquiror Pending the Merger as a reorganization within Merger. Parent and Acquiror covenant and agree that, between the meaning date of section 368(a) this Agreement and the Effective Time, Parent shall not sell or otherwise dispose of the Codeall or substantially all of its assets.
Appears in 3 contracts
Sources: Agreement and Plan of Reorganization (AirRover Wi-Fi Corp.), Agreement and Plan of Reorganization (Usurf America Inc), Agreement and Plan of Reorganization (Usurf America Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by the Company. From During the period from the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or except as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses shall, and shall cause each of Company and the Company Subsidiaries shall be conducted only to, carry on their respective businesses in the usual, regular and ordinary and usual course of business and course, consistent with past practicespractice, and there shall be no material changes use their best efforts to preserve intact their present business organizations, keep available the services of their present advisors, managers, officers and employees and preserve their relationships with customers, suppliers, licensors and others having business dealings with them and continue existing contracts as in effect on the conduct date hereof (for the term provided in such contracts). Without limiting the generality of the operations of foregoing, neither the Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in nor any of the Company Subsidiaries; Subsidiaries will (iiexcept as expressly permitted by this Agreement or as contemplated by the Transactions or to the extent that Parent or MergerCo shall otherwise consent in writing):
(i) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable (whether in cash, stock, property or any combination thereof) in respect of any of its capital stock, (ii) split, combine or reclassify any of its capital stock or property(iii) repurchase, or redeem or otherwise acquire any of its securities, except, in the case of clause (iii), for (X) the acquisition of shares of its capital stock Common Stock from holders of Options in full or partial payment of the exercise price payable by such holders upon exercise of Options outstanding on the date of this Agreement and (Y) the acquisition of shares of Common Stock from the capital stock of any stockholders of the Company Subsidiariesset forth in Section 6.1(a) of the Company Disclosure Schedule (collectively, the "Rollover Stockholders") upon the exchange of such shares for shares of Series B Stock in connection with the Transactions;
(c) neither Company nor any of the Company Subsidiaries shall (ib) authorize for issuance, issue issue, sell, deliver or agree or commit to issue, sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities (including indebtedness having the right to vote) or equity equivalents (including, without limitation, stock appreciation rights), except for other than (aX) unissued Shares reserved for the issuance of shares of Common Stock upon the exercise of Employee Options outstanding on the date of this Agreement in accordance with their present terms and (Y) the issuance of the Series B Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and Rollover Stockholders in exchange for shares of Common Stock in connection with the Transactions;
(c) the Employee Shares; (ii) acquire, dispose of, transfersell, lease, licenseencumber, mortgage, pledge transfer or encumber dispose of any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in outside the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directlyby asset acquisition, contingently stock acquisition or otherwise), except as set forth in Section 6.1(c) for of the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; Disclosure Schedule;
(vd) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiariesprior practice;
(e) neither Company nor pay, discharge or satisfy any of the Company Subsidiaries shall make any change in the compensation payable claims, liabilities or to become payable to any of its officersobligations (absolute, directors accrued, asserted or employeesunasserted, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise), other than any payment, discharge or satisfaction (i) in the ordinary course of business and consistent with past practice, or (ii) as may be required under applicable Law or in connection with the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andTransactions;
(f) neither change any of the accounting principles or practices used by it (except as required by generally accepted accounting principles, in which case written notice shall be provided to MergerCo prior to any such change);
(g) except as required by law, (i) enter into, adopt, amend or terminate any Company nor Benefit Plan, (ii) enter into, adopt, amend or terminate any agreement, arrangement, plan or policy between the Company or any of the Company Subsidiaries (other than terminations of agreements, arrangements, plans or policies in accordance with the terms thereof existing on the date of this Agreement) and one or more of their directors or officers, or (iii) increase in any manner the compensation or fringe benefits of any director of the Company or the compensation or fringe benefits of any officer of the Company or any Company Subsidiary set forth in Section 6.1(g) of the Company Disclosure Schedule, or, except for normal increases in the ordinary course of business consistent with past practice, any employee of the Company or any Company Subsidiary, or pay any benefit not required by any Company Benefit Plan or arrangement as in effect as of the date hereof;
(h) adopt any amendments to the Articles of Organization or Bylaws, other than (X) to authorize the shares of Series B Stock to be issued to the Rollover Stockholders and to establish the rights, preferences and designations thereof (such rights, preferences and designations of such Series B Stock shall be as set forth in Section 6.1(h) of the Company Disclosure Schedule) and (Y) as otherwise expressly provided by the terms of this Agreement;
(i) knowingly take except as set forth in Section 5.1 of the Company Disclosure Schedule, adopt a plan of complete or allow partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization;
(j) settle or compromise any litigation (whether or not commenced prior to the date of this Agreement);
(k) waive, release or amend its rights under any confidentiality, "standstill" or similar agreement that the Company entered into in connection with its consideration of a potential strategic transaction; provided, however, that the Company may waive, release or amend its rights under any such confidentiality, "standstill" or similar agreement if the Company Board determines based on the advice of independent legal counsel that failure to do so would be taken any action which would jeopardize reasonably likely to constitute a breach of its fiduciary duties to the treatment of ParentCompany's acquisition of Company as a pooling of interests for accounting purposesstockholders under applicable law; or or
(iil) knowingly enter into an agreement to take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.foregoing actions. A-18 109
Appears in 3 contracts
Sources: Proxy Statement (Instron Corp), Proxy Statement (Instron Corp), Proxy Statement (Instron Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From (i) The Company covenants and agrees that, between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, Time or as otherwise contemplated by earlier termination of this Agreement, or any Exhibit hereto, or unless the Company Disclosure LetterPurchaser shall otherwise consent in writing:
(a) the respective businesses business of Company and the Company Subsidiaries shall be conducted only in in, and the Company s all not take any action except in, the ordinary and usual course of business and in a manner consistent with past practices, practice; and there shall be no material changes in the conduct Company will use its reasonable efforts to preserve substantially intact the business organization of the operations Company, to keep available the services of the present officers, employees and consultants of the Company or any and to preserve the present relationships of the Company Subsidiary;with customers, suppliers and other Persons with which the Company has significant business relations.
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) will not amend its Certificate of Incorporation or By-Laws; or ;
(iiic) split, combine or reclassify any shares of its outstanding capital stock or the Company will not declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of property with respect to its capital stock or shares of stock; and neither the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company its Subsidiaries shall will (i) authorize for issuanceissue, issue sell, transfer, pledge, dispose of or sell encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, its of capital stock of any class of the Company or any of its Subsidiaries, other than (whether through the issuance or granting A) issuances of Shares pursuant to securities, options, warrants, commitmentscalls, subscriptions, commitments or rights existing at the date hereof and previously disclosed to the Purchaser in writing (including as disclosed in the SEC Reports) or (B) issuances to employees pursuant to any of the Option Plans of stock options to purchase in the aggregate up to 10,000 shares of Common Stock which options are exercisable at a price (which price shall be set no earlier than after the tenth trading day following the date of this Agreement) equal to or otherwise), except for greater than fair market value (aas defined in the relevant Option Plan) unissued Shares reserved for issuance upon on the exercise date of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Sharesgrant; (ii) acquireincur any long-term indebtedness (whether evidenced by a note or other instrument, dispose of, transfer, pursuant to a financing lease, licensesale-leaseback transaction, mortgageor otherwise) or incur short-term indebtedness other than under lines of credit existing on the date hereof; (iii) redeem, pledge purchase or encumber otherwise acquire directly or indirectly any fixed of its capital stock or other assets in excess of $5,000,000 securities; or (iv) enter into, amend, terminate, renew or fail to use reasonable efforts to renew in any one material respect any (x) Material Contract or a series of related transactions other than (y) Identified Contract except in the ordinary course of business and consistent with past practices; practice;
(iiid) incurexcept as set forth on Schedule 5.1(d) of the Disclosure Schedule, assume or prepay neither the Company nor any indebtedness or any other material liabilities other than of its Subsidiaries will, except for normal increases in the ordinary course of business and consistent with past practices; practice or pursuant to employment contracts in effect on the date hereof, (ivi) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of grant any other person other than a Company Subsidiary increase in the ordinary course of business and consistent with past practices; (v) make any loans, advances compensation or capital contributions to, benefits payable or investments in, any other person, other than to Company Subsidiaries and other than in become payable by the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary of its Subsidiaries to any employee; (ii) adopt, enter into, amend or a loss payee otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to be cancelled become payable or terminated accrued under any bonus, incentive compensation, deferred compensation, severance, termination, change in control, retention, hospitalization or other than in the ordinary course of businessmedical, life, disability, insurance or other welfare, profit sharing, stock option, stock appreciation right, restricted stock or other equity based, pension, retirement or other employee compensation or benefit plan, program agreement or arrangement; or (viiiiii) enter into or amend in any contractmaterial respect any employment or collective bargaining agreement or, agreementexcept in accordance with the existing written policies of the Company or existing contracts or agreements, commitment grant any severance or arrangement with respect termination pay to any officer, director or employee of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services or any of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither the Company nor its Subsidiaries will change the accounting principles used by it unless required by GAAP (or, if applicable with respect to Subsidiaries, foreign generally accepted accounting principles);
(f) except as set forth on Schedule 5.1(f) of the Disclosure Schedule, neither the Company nor any of the Company its Subsidiaries shall make acquire by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any change in the compensation payable other manner, any business or to become payable to any of its officerscorporation, directors or employeespartnership, enter into or amend any employment, severance, termination association or other similar agreement, adopt any new Plan business organization or amend in any material respect any existing Plandivision thereof, or make otherwise acquire any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf assets of any of such persons, whether contingent on consummation of the Merger or otherwise, other Person (other than (i) in the ordinary course purchase of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.assets from suppliers or
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Mecklermedia Corp), Agreement and Plan of Merger (Penton Media Inc), Agreement and Plan of Merger (Penton Media Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. 7.1 Conduct of Business by the OCG and CMPI Pending the Merger From the date of this Agreement to hereof until the Effective Time, unless Parent OCG and CMPI shall otherwise agree in writing, or and expect as otherwise contemplated by this Agreement, or any Exhibit heretoOCG and CMPI and their respective Subsidiaries shall conduct their business in the ordinary course consistent with past practice. Except as otherwise provided in this Agreement, or and without limiting the Company Disclosure Lettergenerality of the foregoing, from the date hereof until the Effective Time, without the written consent of OCG and CMPI, which consent shall not be unreasonably withheld:
(a) the Neither OCG nor CMPI will adopt or propose any change to their respective businesses certificate or articles of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company incorporation or any Company Subsidiarybylaws;
(b) Company shall not Neither OCG nor CMPI will (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, with respect to any shares of capital stock or propertyof the respective OCG and CMPI, or (ii) repurchase, redeem or otherwise acquire any outstanding shares of its capital stock or shares of other securities of, or other ownership interests in, OCG or CMPI, as the capital stock of any of the Company Subsidiariescase may be;
(c) neither Company Neither OCG nor CMPI will, nor permit any of its Subsidiaries to, merge or consolidate with any other person or acquire assets of any other person except in the Company ordinary course of business or pursuant to transactions among wholly-owned subsidiaries of OCG or CMPI, as the case may be;
(d) Neither OCG nor CMPI will, nor permit any of its Subsidiaries shall to, sell, lease, license or otherwise surrender, relinquish or dispose of any material assets or properties except in the ordinary course of business;
(e) Neither OCG nor CMPI will (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class securities (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquireenter into any amendment of any term of any outstanding security of such company or of any of its Subsidiaries, dispose of(iii) incur any indebtedness, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than except trade debt in the ordinary course of business and consistent debt pursuant to existing or previously disclosed contemplated credit facilities or arrangements, (iv) increase in any material respect compensation, bonus or other benefits payable to, or modify or amend any employment agreements or severance agreements with, any executive officer, or (v) enter into any settlement or consent with past practices; (iii) incurrespect to any pending litigation, assume or prepay any indebtedness or any other material liabilities other than settlements in the ordinary course of business or on terms which are not otherwise materially adverse to such company and consistent with past practices; its Subsidiaries taken as a whole;
(ivf) assumeOCG and CMPI will not change any method of accounting or accounting practice by OCG and CMPI or any of their Subsidiaries, guaranteeexcept for any such change required by GAAP;
(g) Neither OCG nor CMPI will, endorse nor permit any of its Subsidiaries to, (i) take, or otherwise become liable agree or responsible (whether directlycommit to take, contingently any action that would make any representation and warranty of the respective company hereunder inaccurate in any material respect at, or otherwise) for the obligations as of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions time prior to, the Effective Time or investments in(ii) omit, or agree or commit to omit, to take any other personaction necessary or appropriate to prevent any such representation or warranty from being inaccurate in any material respect at any such time; and
(h) Neither OCG nor CMPI will, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) nor permit any insurance policy naming Company of its Subsidiaries to, agree or any Company Subsidiary as a beneficiary or a loss payee commit to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to do any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 3 contracts
Sources: Agreement and Plan of Reorganization (PrimeCare Systems, Inc.), Agreement and Plan of Reorganization (Ocg Technology Inc), Agreement and Plan of Reorganization (PrimeCare Systems, Inc.)
Conduct of Business Pending the Merger. SECTION 6.1 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by this Agreement or disclosed in Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement to the Effective TimeAgreement, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Lettershall, and shall cause its subsidiaries to:
(a) the conduct their respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell amend or pledge propose to amend their respective certificates of incorporation or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; bylaws, (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its their outstanding capital stock or (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or propertyotherwise, except for the payment of dividends or redeem or otherwise acquire any shares of its capital stock or shares distributions to the Company by a wholly-owned subsidiary of the capital stock of any of the Company SubsidiariesCompany;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuancenot issue, issue sell, pledge or sell dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (whether through i) the issuance Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or granting warrants or options to acquire Company Common Stock) in connection with acquisitions of optionsassets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto;
(d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, warrants(B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, commitmentsor (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), subscriptions(ii) redeem, rights purchase, acquire or offer to purchase or otherwiseacquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for (afederal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) unissued Shares reserved for issuance upon of the exercise of Employee Stock OptionsCode, (bv) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge make any acquisition of any assets or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions businesses other than expenditures for current assets in the ordinary course of business and consistent with past practices; (iii) incur, assume expenditures for fixed or prepay any indebtedness or any other material liabilities other than capital assets in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary as set forth in the ordinary course of business and consistent with past practices; (v) make any loansproviso in this Section 6.1(d), advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess sell, pledge, dispose of the amount currently budgeted therefor; (vii) permit or encumber any insurance policy naming Company material assets or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated businesses other than (A) sales of businesses or assets in the ordinary course of business; , (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (viiivii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act;
(de) Company shall use all reasonable efforts to preserve intact the their respective business organization of Company organizations and the Company Subsidiariesgoodwill, to keep available the services of its and their respective present officers and key employees, and to preserve the goodwill of those and business relationships with customers and others having business relationships with it them and not engage in any action, directly or indirectly, with the Company Subsidiariesintent to adversely impact the transactions contemplated by this Agreement;
(ef) neither Company nor any subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the Company Subsidiaries shall make any change in the compensation payable or to become payable to any general status of its officers, directors or employees, ongoing operations;
(g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar agreementarrangements or agreements with any directors, adopt officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any new Plan written employment agreements providing for annual base salary in excess of $100,000 per annum;
(h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any existing Planbonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or make other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwiseretirees generally, other than (i) in the ordinary course of business and consistent with past practicebusiness, except (i) as contemplated by Section 6.1(c), (ii) as may be required under to comply with changes in applicable Law or the terms of any existing Plan or agreementlaw, and (iii) any of the granting foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of retention bonuses any company acquired after the date hereof, or (iv) as required pursuant to certain officers an existing contractual arrangement or agreement;
(i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and employees its businesses in an aggregate amount not to exceed $2,000,000such amounts and against such risks and losses as are consistent with past practice; and
(fj) neither Company nor not make, change or revoke any of the Company Subsidiaries shall (i) knowingly take material Tax election or allow to be taken make any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; material agreement or (ii) knowingly take settlement regarding Taxes with any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codetaxing authority.
Appears in 3 contracts
Sources: Merger Agreement (American Disposal Services Inc), Merger Agreement (Allied Waste Industries Inc), Merger Agreement (Allied Waste Industries Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement The Company has agreed that, prior to the Effective Time, unless Parent shall otherwise agree in writingit will, or as otherwise contemplated by this Agreementand it will cause its subsidiaries to, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only conduct business in the ordinary course and usual course of business and in a manner consistent with past practicescustom and practice, use commercially reasonable efforts to, among other things, preserve the current relationships of the Company and its subsidiaries with customers, distributors, suppliers, licensors, licensees, contractors and other persons with which the Company or its subsidiaries has significant business relations. Further, the Company will not, and there shall be no material changes in will cause its subsidiaries to not, prior to the conduct of the operations of Company Effective Time, directly or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in indirectly do any of the Company Subsidiaries; (ii) following without the prior written consent of Merger Sub: - amend or otherwise change its Certificate Articles of Incorporation or By-Lawslaws; - issue, sell, pledge, dispose of, grant or (iii) splitencumber, combine or reclassify authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock equity securities of any type or class of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofits subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock or other equity securities, or any other ownership interest (including, without limitation, any phantom interests), of the Company or its subsidiaries, or any assets of the Company or its subsidiaries, except for sales in the ordinary course of business consistent with past custom and practice and other asset sales for consideration or having a fair market value aggregating not more than $500,000; - declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity securities; - reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other equity securities; - acquire (including, without limitation, by merger, consolidation or acquisition of stock or assets) or agree to acquire any corporation, partnership, limited liability company, or other business organization or division, other than certain acquisitions of assets previously agreed to; - other than under the Company's existing credit facilities as in effect as of the date of the Merger Agreement, incur or agree to incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any class (whether through person, or make any loans, advances, or capital contributions to or investments in, any other person; or authorize or make capital expenditures which are not in accordance with the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant Company's calendar year 2000 budget which has been presented to the Warrant Agreement and Board of Directors prior to the date of the Merger Agreement; - enter into, establish, adopt, amend or renew any employment, consulting, severance or similar agreement or arrangements with any director, officer, or employee, or grant any salary or wage increase (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business custom and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoingpractice);
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 2 contracts
Sources: Proxy Statement (Jason Inc), Proxy Statement (Jason Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1 Conduct of Business by the Company Pending the Merger. From The Company covenants and agrees that, from the date of this Agreement to hereof until the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise expressly contemplated by this Agreement, Agreement or any Exhibit hereto, or the Company Disclosure Letteras may be agreed to in writing by Parent:
(a) the respective The businesses of the Company and the Company its Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) the Company shall not, and shall not permit any of its Subsidiaries to: (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company its Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, property or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiariesstock;
(c) neither Company nor any of the Company shall not, and shall cause each of its Subsidiaries shall not to: (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of stock options, warrants, convertible securities, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to Options or Warrants outstanding on the Warrant Agreement and (c) the Employee Sharesdate hereof in accordance with their existing terms; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practicesmaterial assets; (iii) incur, assume or prepay any indebtedness for borrowed money or any other material liabilities liabilities, except accounts payable incurred in the ordinary course of business consistent with past practice, or issue or sell any debt securities or warrants or rights to acquire debt securities of the Company or any of its Subsidiaries; (iv) assume, endorse (other than in the ordinary course of business and consistent with past practices; (iv) assume), guarantee, endorse guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the material obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practicesperson; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and person or otherwise enter into any Material Contract other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit make any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee loans to be cancelled or terminated employees, other than travel advances in the ordinary course of business; (vii) fail to maintain adequate insurance consistent with past practices for its business and properties; (viii) undertake, make or commit to undertake or make any capital expenditures in an amount greater than $10,000 per individual capital expenditure and no more than $25,000 per month in the aggregate (on a combined basis for the Company and the Subsidiaries); or (viiiix) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) the Company shall use its reasonable best efforts consistent with past practice to preserve intact the business organization of the Company and the Company its Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business its existing relationships with customers, suppliers and others with which it and the Company Subsidiariesits respective Subsidiaries have business dealings;
(e) neither Company nor any of the Company shall not, and shall cause its Subsidiaries shall make not to, (i) enter into any change in the compensation payable new agreements or to become payable to amend or modify any existing agreements with any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its respective officers, directors or employees or make with any changes "disqualified individuals" (as defined in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation Section 280G(c) of the Merger Code), (ii) grant any increases in the compensation of its respective directors, officers and employees or otherwise, any "disqualified individuals" (as defined in Section 280G(c) of the Code) other than (iA) pursuant to written agreements in effect at the date hereof, true, complete and correct copies of all of which have previously been furnished to Parent by the Company, or (B) increases in the ordinary course of business and consistent with past practicepractice to persons who are not directors or corporate officers of or "disqualified individuals" with respect to the Company or any Subsidiary, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) enter into, adopt, amend or terminate, or grant any new benefit not presently provided for under, any employee benefit plan or arrangement, except as required by law or to maintain the granting tax qualified status of retention bonuses the plan; provided, however, that the Company or its subsidiaries may terminate to certain officers the extent permitted by applicable law any benefit or any employee benefit plan or arrangement or (iv) take any action with respect to the grant of any severance or termination pay other than in the ordinary course of business and employees consistent with past practice and pursuant to policies in effect on the date of this Agreement;
(f) the Company shall not, and shall not permit any Subsidiary to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial 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 (other than equipment, inventory and supplies in the ordinary course of business);
(g) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any of its material assets;
(h) the Company shall take all actions reasonably necessary so that the conditions set forth in the Appendix which require actions to be performed by the Company are satisfied on a timely basis, except as contemplated by this Agreement;
(i) unless the Company receives a "Superior Acquisition Proposal" (as defined in Section 6.5(b) hereof), the Company will not call any meeting of its stockholders to be held prior to March 25, 1997 other than as required by this Agreement;
(j) the Company shall not, and shall not permit any Subsidiary to, make any tax election or settle (except to settle reserved amounts for an aggregate amount equal to or less than the amount so reserved) or compromise any income tax liability;
(k) the Company and each Subsidiary shall make timely payments, in accordance with the terms applicable thereto, of all currently due liabilities for borrowed money;
(l) the Company shall not, and shall not permit any Subsidiary to, pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in the most recent consolidated financial statements (or the notes thereto) of the Company included in the SEC Documents;
(m) the Company shall not, and shall not permit any Subsidiary to, modify, amend or terminate any Material Contract, lease of real property or of a material amount of assets, or agreement relating to exceed $2,000,000indebtedness or the extension of credit, or waive, release or assign any rights or claims thereunder; and
(fn) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment maintain in full force and effect its current policies of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codedirectors' and officers' liability insurance covering all persons who are presently covered by such policies.
Appears in 2 contracts
Sources: Merger Agreement (New Image Industries Inc), Merger Agreement (New Image Industries Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 5.1 Conduct of Business of the Company Pending the Merger. From the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or Except as otherwise contemplated by this Agreement, or any Exhibit hereto, during the period from the date hereof to the earlier of termination of this Agreement or the Effective Time, the Company Disclosure Letteragrees to conduct its business and that of its subsidiaries only in the ordinary course of business consistent with past practice and to use all reasonable efforts consistent with past practices and policies to preserve intact its present business organization (including the services of its existing employees) and preserve its relationships with customers, suppliers and others having business dealings with it, to the end that its goodwill and ongoing business shall be unimpaired at the Effective Date. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, neither the Company nor any of its subsidiaries will, without the prior written consent of the Purchaser:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company amend or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree propose to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate Articles of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(cb) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue issue, sell, deliver or agree or commit to issue, sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)) any stock of any class or any other securities or equity equivalents (including, without limitation, any stock options or stock appreciation rights) except shares of Company Common Stock issuable upon exercise of the Company Outstanding Options or (ii) amend any of the terms of any such securities or agreements outstanding as of the date hereof, except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and as specifically contemplated by this Agreement;
(c) the Employee Shares; (ii) acquiresplit, dispose ofcombine or reclassify any shares of its capital stock, transferdeclare, lease, license, mortgage, pledge set aside or encumber pay any fixed dividend or other assets distribution (whether in excess cash, stock or property or any combination thereof) in respect of $5,000,000 in its capital stock, or redeem or otherwise acquire any one of its securities or a series any securities of related transactions other than the Company's subsidiaries;
(d) (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit in the ordinary course of business and consistent with past practicesbusiness; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (ivii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary or entity except in the ordinary course of business and consistent with past practicespractice, and except for obligations of wholly-owned subsidiaries of it; (viii) make any loans, advances or capital contributions to, or investments in, any other personperson or entity (other than to wholly-owned subsidiaries of it or advances to employees in the ordinary course of business consistent with past practice and in amounts not material to the maker of such loan or advance); (iv) pledge or otherwise encumber shares of its capital stock or any of its subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon;
(e) except as may be required by law or as contemplated by this Agreement or described on the Company Disclosure Schedule, enter into, adopt or amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer, employee or former employee or independent contractor in any manner, or (except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to it and as required under existing agreements) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or performance units);
(f) acquire, sell, lease, license to others or dispose of any assets outside the ordinary course of business which individually or in the aggregate are material to the Corporation, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice which would be material to the Corporation;
(g) except as may be required as a result of a change in law or in US GAAP, change any of the accounting principles or practices used by it;
(h) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory or writing-off notes or accounts receivable other than in the ordinary course of business;
(i) acquire or agree to acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein, other than to as specifically described on the Company Subsidiaries and Disclosure Schedule; (ii) enter into any contract or agreement other than in the ordinary course of business and consistent with past practicespractice which would be material to it; (viiii) authorize any new capital expenditure or expenditures substantially which, individually, is in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than $250,000 or, in the ordinary course aggregate, are in excess of business$2,500,000; or (viiiiv) enter into or amend any contract, agreement, commitment or arrangement with respect to providing for the taking of any of the foregoingaction that would be prohibited hereunder;
(dj) Company shall use reasonable efforts make any tax election or settle or compromise any income tax liability material to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company SubsidiariesCompany;
(ek) neither Company nor pay, discharge or satisfy any of the Company Subsidiaries shall make any change in the compensation payable claims, liabilities or to become payable to any of its officersobligations (absolute, directors accrued, asserted or employeesunasserted, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise), other than (i) the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in, or contemplated by the Company Financial Statements and the Company Subsidiaries or incurred in the ordinary course of business consistent with past practice, (ii) as may be required under applicable Law practice or customary fees and expenses relating to the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andtransactions contemplated by this Agreement;
(fl) neither Company nor settle or compromise any pending or threatened suit, action or claim relating to the transactions contemplated hereby; or
(m) take, or agree in writing or otherwise to take, any of the Company Subsidiaries shall (iactions described in this Section 5.1(a) knowingly take through 5.1(l) or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take make any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) representations or warranties of the CodeCompany contained in this Agreement untrue or incorrect as of the date when made.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Ax Acquisition Corp), Merger Agreement (Dh Technology Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From SECTION 7.01 Conduct of Business by the Company Pending the Merger.
(a) The Company agrees that, between the date of this Agreement to and the Effective Time, except as expressly contemplated by any other provision of this Agreement, as set forth in Section 7.01 of the Company Disclosure Schedule or as required by a Governmental Authority of competent jurisdiction, unless Parent shall otherwise agree consent in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(ai) the respective businesses of the Company and the Company Subsidiaries shall be conducted in all material respects only in in, and the Company and the Subsidiaries shall not take any material action except in, the ordinary and usual course of business and in a manner consistent with past practices, and there practice; and
(ii) the Company shall be no material changes in use its reasonable best efforts to preserve substantially intact the conduct business organization of the operations Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Company Subsidiary;Subsidiary has significant business relations.
(b) By way of amplification and not limitation, except as expressly contemplated by any other provision of this Agreement or as set forth in Section 7.01 of the Company shall not Disclosure Schedule, neither the Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent:
(i) sell amend or pledge otherwise change its certificate of incorporation or agree to sell by-laws or pledge equivalent organizational documents;
(ii) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (A) any shares of any class of capital stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; any Subsidiary, or (iii) splitany options, combine or reclassify any shares of its outstanding capital stock or declarewarrants, set aside or pay any dividend convertible securities or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares ofof such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except for the issuance of up to a maximum of 3,822,307 shares of Company Common Stock issuable pursuant to Company Stock Options outstanding on the date hereof) or (B) any assets of the Company or any Subsidiary, except in the ordinary course of business and in a manner consistent with past practice;
(iii) except as expressly set forth in, and permitted by, Section 4.04 of the Company Disclosure Schedule, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, reprice options granted under any Company Stock Option Plan or authorize cash payments in exchange for any options granted under any of such plans;
(iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for dividends payable by a Subsidiary of the Company to the Company or any other Subsidiary;
(v) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock or other securities;
(vi) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any material amount of assets; (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any class person, or make any loans or advances, or grant any security interest in any of its assets except in the ordinary course of business and consistent with past practice (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights which shall be deemed to purchase or otherwiseinclude borrowings under its senior credit facility), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (iiC) acquire, dispose of, transfer, lease, license, mortgage, pledge enter into any contract or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions agreement other than in the ordinary course of business and consistent with past practicespractice; (iiiD) incurauthorize, assume or prepay make any indebtedness commitment with respect to, any single capital expenditure which is in excess of $500,000 or capital expenditures which are, in the aggregate, in excess of $500,000 per month (the "Monthly CapEx Amount") from the date hereof until the earlier of (x) the Acceptance Date or (z) the termination of this Agreement pursuant to Section 10.01 (it being understood that any unused portion of the Monthly CapEx Amount may be rolled forward and utilized in any subsequent month); or (E) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 7.01(vi);
(vii) sell, lease, license, mortgage, pledge, encumber or dispose of in any manner any properties or assets which are material, individually or in the aggregate, to the Company;
(viii) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries or wages of employees of the Company or any Subsidiary who are not directors or officers of the Company or any Subsidiary, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other material liabilities employee of the Company or of any Subsidiary, or establish, adopt, enter into or amend any bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(ix) change any of the accounting principals used by it, other than as required by GAAP;
(A) make or rescind any Tax election, settle or compromise any liability for Taxes or change or revoke any of its methods of Tax accounting, or (B) take any action with respect to the computation of Taxes or the preparation of Tax returns that is inconsistent with past practice; provided, however, that, in the case of this clause (x), Parent shall not unreasonably withhold its consent;
(xi) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business and consistent with past practices; practice or claims, liabilities or obligations not exceeding $500,000 in the aggregate;
(ivA) assumeamend, guarantee, endorse modify or otherwise become liable or responsible (whether directly, contingently or otherwise) for consent to the obligations termination of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions toMaterial Contract, or investments inamend, any other personwaive, other than modify or consent to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess termination of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company Company's or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; Subsidiary's rights thereunder, or (viiiB) enter into any contract, agreement, commitment contract or arrangement agreement that would be a Restrictive Agreement or a Related Party Agreement;
(xiii) except with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) trademarks in the ordinary course of business and consistent with past practice, (iiA) as may be required under applicable Law or the terms grant any license in respect of any existing Plan material Intellectual Property of the Company or agreementany Subsidiary, and (iiiB) develop any Intellectual Property jointly with any third party, or (C) disclose any confidential Intellectual Property or other confidential information of the granting Company or any Subsidiary, unless such disclosure is made in the ordinary course of retention bonuses business consistent with past practice or would not reasonably be expected to certain officers and employees in an aggregate amount not to exceed $2,000,000; andhave a Company Material Adverse Effect;
(fxiv) neither Company nor commence or settle any material Action; or
(xv) announce an intention, enter into any formal or informal agreement or otherwise make a commitment to do any of the Company Subsidiaries shall (i) knowingly take foregoing or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification materially delay the consummation of the Merger as a reorganization within Offer and the meaning of section 368(a) of the CodeMerger.
Appears in 2 contracts
Sources: Merger Agreement (Quest Diagnostics Inc), Merger Agreement (Unilab Corp /De/)
Conduct of Business Pending the Merger. SECTION V.1 Conduct of Business of the Company Pending the Merger. The Company covenants and agrees that, during the period from the date hereof until the Effective Time, except as specifically contemplated by this Agreement or the Management Agreements, as set forth on Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1 of the Disclosure Schedule or as required by law, or unless Newco shall otherwise consent in writing, the business of the Company and its Subsidiaries shall be conducted in its ordinary course of business consistent with past practice and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, to keep available the services of its officers and employees and to preserve its present relationships with customers, suppliers, Governmental Entities and other persons with which it has significant business relations. From Between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, or except as otherwise specifically contemplated by this Agreement, or any Exhibit hereto, Agreement or the Management Agreements, as set forth on Section 5.1 of the Disclosure Schedule or as required by law, neither the Company Disclosure Letternor any of its Subsidiaries shall without the prior written consent of Newco:
(a) the respective businesses amend or otherwise change its certificate of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company incorporation or any Company Subsidiaryby-laws or equivalent organizational documents;
(b) Company shall not (i) sell authorize for issuance, issue, deliver, sell, pledge, dispose of or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify encumber any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofclass, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof capital stock, or any other ownership interest (including but not limited to stock appreciation rights or phantom stock rights), of the Company or any of its capital stock of any class Subsidiaries (whether through except (i) for the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon shares of Company Class A Common Stock issuable in accordance with the exercise terms of Employee Stock OptionsOptions as in effect on the date hereof, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; 31 (ii) acquirefor the conversion of shares of Company Class B Common Stock into shares of Company Class A Common Stock, dispose of(iii) for the grant of Employee Options, transferand issuances of Company Class A Common Stock pursuant thereto, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; practice or (iiiiv) incurin connection with the dividend reinvestment plan of the Company);
(c) declare, assume set aside, make or prepay pay any indebtedness dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any other material liabilities of its capital stock (except for (i) any dividend or distribution by a wholly-owned (other than directors' qualifying shares) Subsidiary of the Company or (ii) regular quarterly dividends of the Company in the ordinary course of business and an amount not to exceed $0.07125 per Share per quarter, subject to increases consistent with past practices; practice);
(ivd) effect any reorganization or recapitalization or reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any capital stock of the Company or any of its Subsidiaries (except in connection with the conversion of shares of Company Class B Common Stock into shares of Company Class A Common Stock), other than the transactions contemplated hereby and by the Stockholder Agreement;
(i) acquire (by merger, consolidation or acquisition of stock or assets) or sell (by merger, consolidation or sale of stock or assets) any corporation, partnership or other business organization or division thereof or any assets, in each case, which are material to the Company and its Subsidiaries taken as a whole, (ii) incur any long-term indebtedness for borrowed money or assume, guaranteeguarantee or endorse, endorse or otherwise as an accommodation become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) person, or make any loans, advances or capital contributions to, or investments in, any other personperson (other than a Subsidiary of the Company), in each case, other than to Company Subsidiaries and (A) in the ordinary course of business consistent with past practice or (B) any letter of credit entered into in the ordinary course of business consistent with past practice, (iii) other than in the ordinary course of business and consistent with past practices; practice, enter into or renew or amend in any material respect any contract or agreement which is or would be material to the Company and its Subsidiaries taken as a whole or (viiv) authorize any new capital expenditures substantially which are, in the aggregate, in excess of $25,000,000;
(f) except as contemplated by Section 6.6 or except to the amount currently budgeted therefor; (vii) permit extent required under the Company Plans and Employment Agreements as in effect on the date of this Agreement, increase the compensation or fringe benefits of any insurance policy naming of its directors, officers or employees, except for increases for officers and employees of the Company or its Subsidiaries in the ordinary 32 course of business consistent with past practice, or establish, adopt, enter into or amend or terminate any collective bargaining agreement, Company Subsidiary Plan or bonus, profit sharing, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees;
(g) sell, lease or otherwise dispose of, or grant any lien with respect to, any assets or properties of the Company or its Subsidiaries which are, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a beneficiary whole, except for dispositions of excess or obsolete assets and sales of inventories in the ordinary course of business consistent with past practice;
(h) change in any material respect any of the accounting principles or practices used by it, except as may be required as a loss payee to be cancelled result of a change in SEC guidelines or terminated generally accepted accounting principles;
(i) make any material Tax election or settle or compromise any material Tax liability, other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(dj) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiariespay, to keep available the services of its and their present officers and key employeesdischarge or satisfy any liabilities or obligations (absolute, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable accrued, asserted or to become payable to any of its officersunasserted, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise), other than any payment, discharge or satisfaction (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or in accordance with the terms of any existing Plan such liabilities or agreementobligations, and (iii) as otherwise permitted by this Agreement or (iv) which does not involve an amount in excess of $500,000;
(k) settle or compromise any litigation (whether or not commenced prior to the granting date of retention bonuses to certain officers and employees this Agreement) other than settlements or compromises of litigation where the amount paid (less the amount reserved for such matters by the Company) in an aggregate amount settlement or compromise in each case does not to exceed $2,000,000; and250,000;
(fl) neither adopt a plan of complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization, merger or other reorganization of the Company nor or any of its Subsidiaries not constituting an inactive Subsidiary (other than the Merger); or
(m) agree to take any of the Company Subsidiaries shall (iactions described in Sections 5.1(a) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.through 5.1(l). 33
Appears in 2 contracts
Sources: Merger Agreement (Blount Winton M), Agreement and Plan of Merger and Recapitalization (Blount International Inc)
Conduct of Business Pending the Merger. Except as expressly permitted by clauses (i) through (xix) of this Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From 4.1, during the period from the date of this Agreement to through the Effective Time, unless Parent the Company shall, and shall otherwise agree cause each of its Subsidiaries to, in writingall material respects carry on its business in the ordinary course of its business as currently conducted and, or to the extent consistent therewith, use reasonable best efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly contemplated by this Agreement, Agreement or any Exhibit hereto, or as set forth in Section 4.1 of the Company Disclosure LetterLetter (with specific reference to the applicable subsection below), the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Parent:
(ai) the respective businesses (A) declare, set aside or pay any dividends on, or make any other actual, constructive or deemed distributions in respect of, any of Company and the Company its capital stock, or otherwise make any payments to its stockholders in their capacity as such other than dividends or distributions from wholly owned Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
Company, (b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iiiB) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock or declarestock, set aside or pay any dividend or other distribution payable in cash(C) purchase, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiariesor any Subsidiary or any other securities thereof or any rights, warrants or options to acquire, any such shares or other securities or (D) amend the Company Rights Agreement;
(cii) neither Company nor issue, deliver, sell, pledge, dispose of or otherwise encumber any shares of the Company Subsidiaries shall (i) authorize for issuanceits capital stock, issue any other voting securities or sell equity equivalent or any additional shares ofsecurities convertible into, or rights of any kind rights, warrants or options to acquire acquire, any shares ofsuch shares, its capital stock of any class (whether through voting securities, equity equivalent or convertible securities, other than the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance shares of Company Common Stock upon the exercise of Employee Company Stock Options, (b) Shares to be issued Options outstanding on the date of this Agreement and pursuant to the Warrant Agreement and Company Stock Purchase Plan, in each case, in accordance with their current terms;
(ciii) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge amend its certificate of incorporation or encumber any fixed bylaws or other comparable organizational documents;
(iv) acquire or agree to acquire by merging or consolidating with, by purchasing a substantial portion of the assets of or equity in excess of $5,000,000 in or by any one other manner, any business or a series of related transactions any corporation, limited liability company, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets, other than assets acquired in the ordinary course of business and consistent with past practices; practice and not material to the Company and its Subsidiaries, taken as a whole;
(iiiv) incursell, assume transfer, lease, license (as licensor of Intellectual Property Rights of the Company), mortgage, pledge, encumber or prepay otherwise dispose of any indebtedness of its properties or any other material liabilities assets, other than sales, leases or licenses of products or services in the ordinary course of business and consistent with past practices; practice and not material to the Company and its Subsidiaries, taken as a whole;
(ivvi) assumeincur any indebtedness for borrowed money, guarantee, endorse guarantee any such indebtedness or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or other investments in, any other personPerson, other than to indebtedness, loans, advances, capital contributions and investments between the Company and any of its wholly owned Subsidiaries and other than in the ordinary course or between any of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; such wholly owned Subsidiaries;
(vii) permit alter (through merger, liquidation, reorganization, restructuring or in any insurance policy naming other fashion) the corporate structure or ownership of the Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or Subsidiary;
(viii) enter into into, adopt or amend any contractseverance plan or material Contract, agreementCompany Plan or employment or consulting Contract, commitment or arrangement with respect to any of except as required by applicable law, including the foregoingCompany Stock Option Plans;
(dix) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in increase the compensation payable or to become payable to any of its officersdirectors, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors officers or employees or make any changes in its existing borrowing or lending arrangements (except for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) increases in the ordinary course of business consistent with past practice in salaries or wages of employees of the Company or any of its Subsidiaries who are not officers of the Company or any of its Subsidiaries) or grant any severance or termination pay to, or enter into or amend any employment or severance Contract with, any current or former director or officer of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except as may be required to comply with applicable law, amend or take action to enhance or accelerate any rights or benefits under, any labor, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, Contract, trust, fund, policy or arrangement for the benefit of any current or former director, officer or employee;
(x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it or any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make or adopt any change to its accounting methods, practices or policies (other than actions required to be taken by GAAP);
(xii) prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(xiii) settle or compromise any material federal, state, local or foreign income tax liability;
(xiv) enter into, amend or terminate any Company Contract, other than entering into or amending customer contracts in the ordinary course of business so long as (A) the amount involved does not exceed $150,000, and (B) such customer contract or amendment thereto does not provide for rates which are more than 20% below the average billing rate for the then most recently completed fiscal quarter;
(xv) enter into any Contract (A) that would, after the Effective Time, restrict Parent and its Subsidiaries with respect to engaging in any line of business or in any geographical area; or (B) that contains exclusivity, most favored nation pricing or non-solicitation provisions with respect to any customer or supplier that would, after the Effective Time, apply to Parent or any of its Subsidiaries;
(xvi) make or agree to make any new capital expenditure or expenditures which, individually, is in excess of $10,000 or, in the aggregate, are in excess of $50,000;
(xvii) waive or release any material right or claim or pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in the most recent Company SEC Documents filed prior to the date hereof, or incurred in the ordinary course of business consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and;
(fxviii) neither Company nor initiate any litigation or arbitration proceeding or settle or compromise any material litigation or arbitration proceeding or any claim involving intellectual property; or
(xix) authorize, recommend, propose or announce an intention to do any of the Company Subsidiaries shall (i) knowingly take foregoing or allow enter into any Contract to be taken do any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Technology Solutions Company), Merger Agreement (Zamba Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.01 Conduct of Business by the Company Pending the Effective Time. From the date of this Agreement Prior to the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise unless contemplated by this Agreement, Agreement or any Exhibit hereto, or set forth in Section 5.01 of the Company Disclosure Letter, the Company shall conduct, and cause each of its Subsidiaries to conduct, its business only in the ordinary course and consistent with past practice, and the Company shall use, and cause each of its Subsidiaries to use, its reasonable best efforts to preserve intact the present business organization, keep available the services of its present officers and key employees, and preserve the existing business relationships of the Company and its Subsidiaries. Without limiting the generality of the foregoing, unless Parent shall otherwise agree in writing, or unless contemplated by this Agreement or set forth in Section 5.01 of the Company Disclosure Letter, prior to the Effective Time the Company shall not, nor shall it permit any of its Subsidiaries to:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell amend its certificate of incorporation, bylaws or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; other organizational documents, (ii) amend its Certificate allow or authorize any stock dividend, stock split, reverse stock split, division or subdivision, exchange or readjustment, consolidation, reclassification, recapitalization or other similar transaction, in each case, with respect to capital stock of Incorporation or By-Laws; or the Company, (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, except for dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to such Subsidiary's parent or to another wholly owned Subsidiary of the Company, or (iv) directly or indirectly redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company its Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (ib) authorize for issuance, issue (except upon the exercise of Company Stock Options and Warrants outstanding on the date of this Agreement under the Option Plans and Warrant Agreements) or sell or agree to issue or sell any additional shares of, or any rights of any kind to acquire any shares ofor securities convertible into, or exercisable or exchangeable for, its capital stock or shares of the capital stock of any class of its Subsidiaries (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for in each case other than (ai) unissued Shares reserved for issuance upon the exercise of Employee Company Stock Options, Options and Warrants outstanding on the date of this Agreement under the Option Plans and Warrant Agreements or (bii) Shares issuances by a direct or indirect wholly owned Subsidiary of the Company to be issued pursuant such Subsidiary's parent or to another wholly owned Subsidiary of the Warrant Agreement and Company;
(c) the Employee Shares; (i) merge, combine or consolidate with another Person, (ii) acquireacquire or purchase any (A) equity interest in or (B) the assets of another corporation, dispose ofpartnership or other business organization or otherwise acquire any assets outside the ordinary course of business and consistent with past practice or otherwise enter into any contract, transfercommitment or transaction outside the ordinary course of business and consistent with past practice (other than any acquisition or purchase of such assets by the Company in an aggregate amount not to exceed $1.0 million) or (iii) sell, lease, license, waive, release, transfer, mortgage, pledge pledge, encumber or encumber otherwise dispose of or allow or cause any fixed or other Lien upon any of its assets in excess outside the ordinary course of $5,000,000 in any one or a series of related transactions business and consistent with past practice (other than any disposition of such assets by the Company in an aggregate amount not to exceed $1.0 million);
(d) (i) incur, assume, modify or prepay any indebtedness, obligations or liabilities other than in each case in the ordinary course of business and consistent with past practices; practice, (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (ivii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person Person other than a Company Subsidiary of the Company, in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and each case other than in the ordinary course of business and consistent with past practices; practice or (viiii) make any loans, advances (other than for business expenses incurred in the ordinary course of business and consistent with past practice) or capital contributions to, or investments in, any other Person, other than to any Subsidiary of the Company;
(e) pay, satisfy, discharge or, except as required by Law, settle any material claim, liabilities or obligations (absolute, accrued, contingent or otherwise), other than in the ordinary course of business and consistent with past practice or pursuant to mandatory terms of any Company Contract in effect on the date hereof;
(f) modify or amend, or waive any material benefit under any material agreement, contract or commitment to which the Company or any of its Subsidiaries is a party or by or to which any of their respective material assets or properties are bound or subject, including any Company Contract;
(g) authorize or make capital expenditures substantially in excess of $1.0 million in the amount currently budgeted therefor; aggregate;
(viih) permit any material insurance policy naming the Company or any Subsidiary of the Company Subsidiary as a beneficiary or a loss payee to be cancelled canceled or terminated other than in the ordinary course of business; business and consistent with past practice;
(i) (i) adopt, enter into, terminate or, except as required by Law, amend any employee plan, agreement, contract, arrangement or other Company Benefit Plan (provided that nothing herein is intended to prevent the Company or any of its Subsidiaries from hiring or firing Employees in the ordinary course of business and consistent with past practice), (ii) increase in any material manner the compensation or fringe benefits of, or pay any material bonus to, any director, officer or employee of the Company or any of its Subsidiaries, or (viiiiii) except in the ordinary course of business and consistent with past practice or other than pursuant to Section 2.08 hereof, take any action to fund or in any other way secure, or to accelerate or otherwise remove restrictions with respect to, the payment of compensation or benefits under any Company Benefit Plan;
(j) make any material change in its accounting or Tax policies or procedures, except as required by changes in GAAP or as required by Law;
(k) settle any material Proceeding; or
(l) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 2 contracts
Sources: Merger Agreement (Edison Schools Inc), Merger Agreement (Edison Schools Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1. From Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement to and the Effective Time, unless Parent COLA shall otherwise agree in writinghave consented (such consent to be given or withheld within its sole discretion), or as otherwise contemplated by this Agreement, or any Exhibit hereto, or neither the Company Disclosure Letternor any Company Subsidiary shall:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only conduct its business in any manner other than in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell amend or pledge or agree propose to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate certificate of Incorporation incorporation or Byby-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiarieslaws;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue issue, grant, sell, pledge, redeem or sell acquire for value any additional shares ofof its or their securities, including options, warrants, commitments, stock appreciation rights, subscriptions, or other rights to purchase securities; provided, however, that shares of any kind Common Stock earned as Performance Shares by employees of the Company and Company Subsidiaries pursuant to acquire any shares ofthe Company's 1998 Long-Term Incentive Plan may be issued upon such employees' satisfaction of performance criteria that (i) have been adopted by the Board of Directors prior to the date of this Agreement or (ii) are subsequently approved by COLA; and provided, its capital stock of any class (whether through further, that the issuance or granting Company may issue securities pursuant to the exercise of options, warrants, commitments, subscriptions, or other rights to purchase securities outstanding on the date hereof;
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property, or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiariesits capital stock or other equity interests, to keep available the services or subdivide, reclassify, recapitalize, split, combine or exchange any of its and their present officers and key employees, and to preserve the goodwill shares of those having business relationships with it and the Company Subsidiariescapital stock;
(e) neither Company nor take any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwiseaction, other than (i) reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, including tax accounting policies and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andprocedures);
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification would, or could reasonably be expected to result in, any of its representations and warranties set forth in this Agreement being untrue or in any of the conditions to the Merger set forth in Article VII not being satisfied, except as a reorganization within provided in Articles 6.4 and 8.1 hereof; or
(g) authorize any of, or commit or agree to take any of, the meaning of section 368(a) of the Codeforegoing actions.
Appears in 2 contracts
Sources: Merger Agreement (Oneil Timothy P), Merger Agreement (Transfinancial Holdings Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 6.01. From Conduct of Business by the Company Pending the Merger. The Company agrees that, between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as otherwise expressly contemplated by this AgreementAgreement and Section 6.01 of the Disclosure Schedule, or any Exhibit hereto, or neither the Company Disclosure Letternor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do or initiate any significant steps to do any of the following without the prior written consent of Parent:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company amend or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend otherwise change its Certificate of Incorporation or By-Laws; laws or equivalent organizational documents;
(iiib) splitissue, combine sell, pledge, dispose of, grant, encumber, or reclassify authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares class of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor or any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock, its capital stock or any other ownership interest (including, without limitation, any phantom interest), of the Company or any class Subsidiary (whether through except for the issuance of a maximum of 1,394,166 Shares issuable pursuant to employee stock options outstanding on the date hereof) or granting (ii) any assets of options, warrants, commitments, subscriptions, rights to purchase the Company or otherwise)any Subsidiary, except for (a) unissued Shares reserved for issuance upon in the exercise ordinary course of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement business and in a manner consistent with past practice;
(c) the Employee Sharesdeclare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any significant amount of assets; (ii) acquireexcept in the ordinary course of business and consistent with past practice incur any indebtedness for borrowed money or issue any debt securities or assume, dispose ofguarantee or endorse, transferor otherwise become responsible for, lease, license, mortgage, pledge the obligations of any person or encumber make any fixed loans or other assets in excess of $5,000,000 advances or grant any security interest in any one of its assets; (iii) enter into any customer contract related to the Company's military and medical businesses, (iv) enter into any other contract or a series of related transactions agreement other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practicespractice; (v) authorize, or make any loanscommitment with respect to, advances any single capital expenditure which is in excess of $500,000 or capital contributions toexpenditures which are, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course aggregate, in excess of business $1,000,000 for the Company and consistent with past practicesthe Subsidiaries taken as a whole; or (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into or amend any contract, agreement, commitment or arrangement with respect to any of the foregoingmatter set forth in this Section 6.01(e);
(df) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries, wages, bonuses, incentives or pension benefits of employees of the Company or any of its officers, Subsidiary who are not directors or employeesofficers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or of any Subsidiary, or establish, adopt, enter into or amend (other than as may be required by applicable Law) any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, severancetermination, termination severance or other similar plan, agreement, adopt trust, fund, policy or arrangement for the benefit of any new Plan director, officer or amend in employee;
(g) change any of the accounting methods used by it unless required by GAAP or applicable law;
(h) make any tax election or settle or compromise any material respect United States federal, state, local or non-United States income tax liability;
(i) pay, discharge or satisfy any existing Planclaim, liability or make any loans to any of its officersobligation (absolute, directors accrued, asserted or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such personsunasserted, whether contingent on consummation of the Merger or otherwise), other than (i) the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the 1999 Balance Sheet or subsequently incurred in the ordinary course of business and consistent with past practice;
(iij) as may be required under applicable Law amend, modify or consent to the terms termination of any existing Plan Material Contract, or agreementamend, and (iii) waive, modify or consent to the granting termination of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andthe Company's or any Subsidiary's material rights thereunder;
(fl) neither Company nor publicly announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Ericsson MPD Acquisition Corp), Merger Agreement (Microwave Power Devices Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER4.1 Conduct of Business by NEC Pending the Merger. From NEC and ▇▇▇▇▇▇ covenant and agree that, between the date of this Agreement and the Merger Closing Date, the business of NEC shall be conducted only in, and NEC shall not take any action except in, the ordinary course of business, consistent in all material respects with past practice. NEC shall use its best efforts to preserve intact its business organizations, to keep available the Effective Timeservices of its current officers, unless Parent employees and consultants, and to preserve its present relationships with customers, suppliers and other persons with which it has significant business relations. By way of illustration and not limitation, NEC shall otherwise not, between the date of this Agreement and the Merger Closing Date, directly or indirectly, do or propose or agree in writing, or as otherwise contemplated by this Agreement, or to do any Exhibit hereto, or of the Company Disclosure Letterfollowing without the prior written consent of DataMEG:
(a) the respective businesses amend or otherwise change its articles of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company incorporation or any Company Subsidiarybylaws or equivalent organizational documents;
(b) Company shall not issue, sell, pledge, dispose of, encumber, or, authorize the issuance, sale, pledge, disposition, grant or encumbrance of (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofclass, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock, or any other ownership interest, of it or (ii) any of its capital stock of any class (whether through the issuance assets, tangible or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)intangible, except for (a) unissued Shares reserved for issuance upon in the exercise ordinary course of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and business consistent in all material respects with past practice;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(e) acquire (including, without limitation, for cash or shares of stock, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership or other business organization or division thereof or any assets, or make any investment either by purchase of stock or securities, contributions of capital or property transfer, or, except in the Employee Sharesordinary course of business, consistent with past practice, purchase any property or assets of any other Person; (ii) acquireincur any indebtedness for borrowed money or issue any debt securities or assume, dispose ofguarantee or endorse or otherwise as an accommodation become responsible for, transferthe obligations of any Person, leaseexcept endorsement of checks payable to NEC in the ordinary course of business, licenseor make any loans or advances; or (iii) enter into any Contract other than in the ordinary course of business, mortgageconsistent with past practice;
(f) increase, pledge without the consent of DataMEG, the compensation payable or encumber to become payable to its officers or employees, or, except as presently bound to do, grant any fixed severance or termination pay to, or enter into any employment or severance agreement with, any of its directors, officers or other assets in excess employees, or establish, adopt, enter into or amend or take any action to accelerate any rights or benefits with any collective bargaining, bonus, profit sharing, trust, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of $5,000,000 in any one directors, officers or a series of related transactions employees;
(g) take any action other than in the ordinary course of business and in a manner consistent in all material respects with past practices; practice with respect to accounting policies or procedures;
(iiih) incurmake any capital investments without the consent of DataMEG;
(i) make any distributions to the Shareholder, assume or prepay any indebtedness or any other material liabilities other than ordinary and customary salaries and expense reimbursements;
(j) pay, discharge or satisfy, without the consent of DataMEG, any existing claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent in all material respects with past practices; (iv) assumepractice of due and payable liabilities reflected or reserved against in its financial statements, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions toas appropriate, or investments in, any other person, other than to Company Subsidiaries and other than in liabilities incurred after the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) date hereof in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andor
(fk) neither Company nor agree, in writing or otherwise, to take or authorize any of the Company Subsidiaries shall (i) knowingly take foregoing actions or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; make any representation or (ii) knowingly take warranty in Article III untrue or incorrect in any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codematerial respect.
Appears in 2 contracts
Sources: Merger Agreement (Datameg Corp), Merger Agreement (Datameg Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1 Conduct of Business by the Company Pending the Merger. From the date of this Agreement The Company covenants and agrees that, prior to the Effective Time, unless Parent the Purchaser shall otherwise agree in writing, writing (such agreement not to be unreasonably withheld) or as otherwise expressly contemplated by this Merger Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of the Company and the Company its Subsidiaries shall be conducted only in in, and the Company and its Subsidiaries shall not take any action except in, the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) the Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company its Subsidiaries; (ii) amend its Certificate Articles of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, property or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company its Subsidiaries;
(c) neither Company nor any except as set forth Section 5.1 of the Disclosure Letter, the Company shall not, and shall cause each of its Subsidiaries shall not to, (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock OptionsOptions in accordance with their existing terms, (b) Shares to as such Stock Options may be issued accelerated pursuant to the Warrant Agreement and (c) the Employee Sharestheir existing terms; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any material indebtedness or any other material liabilities other than the incurrence of liabilities in the ordinary course of business and consistent with past practicesborrowings under the credit agreement described in Section 5.1 of the Disclosure Letter for working capital purposes up to the credit limit described in Section 5.1 of the Disclosure Letter; (iv) assume, guaranteeendorse (other than in the ordinary course of business consistent with past practices), endorse guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the material obligations of any other person (other than a Company Subsidiary in the ordinary course of business and consistent with past practicesSubsidiary); (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and its Subsidiaries, or otherwise enter into any Material Contract; (vi) make any loans to employees, other than advances in the ordinary course of business and consistent with past practices; (vivii) authorize fail to maintain adequate insurance consistent with past practices for their businesses and properties (to the extent available at commercially reasonable prices); and (viii) make capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company $25,000 individually or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than $250,000 in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoingaggregate;
(d) the Company shall use reasonable business efforts to preserve intact the business organization of the Company and the Company its Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiariesthem;
(e) neither the Company nor shall not and shall cause its Subsidiaries not to (i) enter into any new agreements (other than in its ordinary course of business consistent with past practice) or amend or modify any existing agreements (other than in its ordinary course of business consistent with past practice) with any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its their respective officers, directors or employees or make with any changes "disqualified individuals" (as defined in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation Section 280G(c) of the Merger Code), (ii) grant any increases in the compensation of their respective directors, officers and employees or otherwise, any "disqualified individuals" other than (i) increases in the ordinary course of business and consistent with past practicepractice to persons who are not directors or corporate officers of or "disqualified individuals" with respect to the Company or any Subsidiary, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) enter into, adopt, amend or terminate, or grant any new benefit not presently provided for under, any employee benefit plan or arrangement, except as required by law or to maintain the granting Tax qualified status of retention the plan; provided, however, it is understood that the Company is permitted to pay bonuses to certain officers the extent described in Section 5.1 of the Disclosure Letter; or (iv) except as contemplated by Section 6.14, take any action with respect to the grant of any severance or termination pay other than in the ordinary course of business and employees consistent with past practice and pursuant to policies or practices in an aggregate amount not to exceed $2,000,000; andeffect on the date of this Merger Agreement;
(f) the Company shall not, and shall not permit any Subsidiary to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial 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 (other than in the ordinary course of business) that are material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(g) except as set forth in Section 5.1 of the Disclosure Letter, neither the Company nor any of its Subsidiaries shall settle or compromise any material claims or litigation or, except in the ordinary and usual course of business modify, amend or terminate any of its Material Contracts or waive, release or assign any material rights or claims;
(h) neither the Company nor any of its Subsidiaries shall make any material Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(i) knowingly neither the Company nor any of its Subsidiaries shall take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly omit to take any action that would jeopardize qualification cause any of its representations and warranties herein to become untrue in any material respect;
(j) neither the Company nor any of its Subsidiaries will authorize or enter into an agreement to do any of the Merger foregoing; and
(k) except as required by the Pennsylvania Law or the Company's By-Laws, the Company will not call any meeting of its shareholders to be held prior to December 31, 2003 other than a reorganization within special or annual meeting of shareholders to consider and vote upon the meaning of section 368(a) of the CodeMerger.
Appears in 2 contracts
Sources: Merger Agreement (Bionx Implants Inc), Merger Agreement (Conmed Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 4.1 Conduct of Business by the Company Pending the Merger. From The Company covenants and agrees that, during the period from the date of this Agreement to and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in writing, the Company shall conduct its business and shall cause the businesses of its subsidiaries to be conducted only in, and the Company and its subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice other than actions taken by the Company or its subsidiaries in contemplation of the Merger; and the Company shall use all reasonable commercial efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, neither the Company nor any of its subsidiaries shall, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or any Exhibit heretothe Effective Time, directly or indirectly do, or propose to do, any of the Company Disclosure Letterfollowing without the prior written consent of Parent:
(a) amend or otherwise change the respective businesses Articles of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct Incorporation or By-Laws of the operations of Company or any Company Subsidiaryof its subsidiaries;
(b) Company shall not (i) sell issue, sell, pledge, dispose of or pledge encumber, or agree to sell authorize the issuance, sale, pledge, disposition or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) splitencumbrance of, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofclass, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof capital stock, or any other ownership interest (including, without limitation, any phantom interest) in the Company, any of its subsidiaries or affiliates (except for the issuance of shares of Company Common Stock issuable pursuant to Stock Options which were granted under the Company Stock Option Plan and are outstanding on the date hereof).
(c) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) sales of immaterial assets not in excess of $10,000 in the aggregate);
(i) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent and except that the Company may pay normal quarterly dividends of $.25 per Share to shareholders of record on August 31, 1997 and on November 30, 1997, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any class other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (whether through iii) amend the issuance terms or granting change the period of optionsexercisability of, warrantspurchase, commitmentsrepurchase, subscriptionsredeem or otherwise acquire, rights or permit any subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Company Common Stock or any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, or propose to do any of the foregoing;
(i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except as described in Section 2.8 of the Company Disclosure Schedule; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person or, except in the ordinary course of business consistent with past practice, make any loans or advances; (iii) enter into or amend any material contract or agreement calling for aggregate payments in excess of $25,000; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $50,000 (other than for office furnishings in an amount in the aggregate not to exceed $10,000 and capital expenditures described in Section 4.1(e) of the Company Disclosure Schedule) for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(f) other than the payment of normal cash bonuses payable to employees for the year ending July 31, 1997 in an aggregate amount not to exceed $260,000, and normal raises reasonably acceptable to Parent, increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees, except, in each case, as may be required by law;
(g) take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable);
(h) make any material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations;
(i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practices; (iii) incur, assume practice of liabilities reflected or prepay any indebtedness or any other material liabilities other than reserved against in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary financial statements contained in the ordinary course Company SEC Reports filed prior to the date of business and consistent with past practices; (v) make any loans, advances this Agreement or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) incurred in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andor
(fj) neither Company nor take, or agree in writing or otherwise to take, any of the Company Subsidiaries shall actions described in Sections 4.1 (a) through (i) knowingly take above, or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take make any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) representations or warranties of the CodeCompany contained in this Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 2 contracts
Sources: Merger Agreement (Oxford Automotive Inc), Merger Agreement (BMG North America LTD)
Conduct of Business Pending the Merger. Section SECTION 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. From Except as otherwise contemplated by this Agreement, after the date hereof and prior to the Closing Date or earlier termination of this Agreement to the Effective TimeAgreement, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Lettershall, and shall cause its subsidiaries to:
(a) the conduct their respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell amend or pledge or agree propose to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation their respective charters or By-Laws; or laws, (iiiii) split, combine or reclassify any shares of its their outstanding capital stock or (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or propertyotherwise, except for the payment of dividends or redeem or otherwise acquire any shares of its capital stock or shares distributions by a wholly owned subsidiary of the capital stock of any of the Company SubsidiariesCompany;
(c) neither Company nor any not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of the Company Subsidiaries shall (i) authorize for issuanceor otherwise cause to become outstanding, issue or sell any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its of their capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase any debt or otherwise)equity securities convertible into or exchangeable for such capital stock, except for that the Company may issue shares (ai) unissued Shares reserved for issuance upon the conversion of convertible securities and exercise of Employee Stock Options, (b) Shares to be issued pursuant to options outstanding on the Warrant Agreement date hereof and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge in connection with the potential acquisitions described in Schedule 6.1; ------------
(d) not (i) incur or encumber become contingently liable with respect to any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions indebtedness for borrowed money other than (x) borrowings in the ordinary course of business and consistent with past practices; or (y) borrowings to refinance existing indebtedness, the terms of which shall be reasonably satisfactory to Parent, (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) incurtake any action which would jeopardize the treatment of the Merger as a pooling of interests under APB 16, assume (iv) take or prepay fail to take any indebtedness action which action or failure would cause the Company or its stockholders (except to the extent that any other material liabilities stockholders receive cash in lieu of fractional shares) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger, (v) make any acquisition of any assets or businesses other than acquisitions of assets in the ordinary course of business, (vi) sell, pledge, dispose of or encumber any assets or businesses other than sales in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(de) Company shall use all commercially reasonable efforts to preserve intact the their respective business organization of Company organizations and the Company Subsidiariesgoodwill, to keep available the services of its and their respective present officers and key employees, and to preserve the goodwill of those and business relationships with customers and others having business relationships with it them and not engage in any action, directly or indirectly, with the Company Subsidiariesintent to adversely impact the transactions contemplated by this Agreement;
(ef) neither Company nor any confer on a regular and frequent basis with one or more representatives of Parent to report operational matters of materiality and the Company Subsidiaries shall make any change in the compensation payable or to become payable to any general status of its officers, directors or employees, ongoing operations;
(g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar agreementarrangements or agreements with any directors, adopt any new Plan officers or amend in any material respect any existing Plankey employees, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) except in the ordinary course of business and consistent with past practice;
(h) not adopt, (ii) as may be required under applicable Law enter into or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the terms benefit or welfare of any existing Plan employee or agreementretiree, and (iii) the granting of retention bonuses except as required to certain officers and employees comply with changes in an aggregate amount not to exceed $2,000,000applicable law; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company maintain with financially responsible and adequately capitalized insurance companies insurance coverage on its assets and its businesses in such amounts and against such risks and losses as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeare consistent with past practice.
Appears in 2 contracts
Sources: Merger Agreement (Corporate Express Inc), Merger Agreement (Corporate Express Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 5.1 Conduct of Business of the Company Pending the Merger. From the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or Except as otherwise contemplated by this Agreement, or any Exhibit hereto, during the period from the date hereof to the earlier of termination of this Agreement or the Effective Time, the Company Disclosure Letteragrees to conduct its business and that of its subsidiaries only in the ordinary course of business consistent with past practice and to use all reasonable efforts consistent with past practices and policies to preserve intact its present business organization (including the services of its existing employees) and preserve its relationships with customers, suppliers and others having business dealings with it, to the end that its goodwill and ongoing business shall be unimpaired at the Effective Date. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, neither the Company nor any of its subsidiaries will, without the prior written consent of the Purchaser:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company amend or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree propose to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(cb) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue issue, sell, deliver or agree or commit to issue, sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, any stock options or stock appreciation rights), except (x) shares of Company Common Stock issuable upon conversion of the Outstanding Debentures (at a conversion rate of one share of Company Common Stock for every $25.00 of Outstanding Debentures) and (ay) unissued Shares reserved for issuance shares of Company 32 Common Stock issuable upon the exercise of Employee Stock Optionsthe Company Outstanding Options or (ii) amend any of the terms of any such securities or agreements outstanding as of the date hereof, (b) Shares to be issued pursuant to the Warrant Agreement and except as specifically contemplated by this Agreement;
(c) the Employee Shares; (ii) acquiresplit, dispose ofcombine or reclassify any shares of its capital stock, transferdeclare, lease, license, mortgage, pledge set aside or encumber pay any fixed dividend or other assets distribution (whether in excess cash, stock or property or any combination thereof) in respect of $5,000,000 in its capital stock, or redeem or otherwise acquire any one of its securities or a series any securities of related transactions other than the Company's subsidiaries, except that the Company may repurchase Outstanding Debentures to the extent necessary to satisfy its 1997 sinking fund obligation under the Indenture by which the Debentures were issued;
(d) (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit in the ordinary course of business and consistent with past practicesbusiness; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (ivii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary or entity except in the ordinary course of business and consistent with past practicespractice, and except for obligations of wholly-owned subsidiaries of it; (viii) make any loans, advances or capital contributions to, or investments in, any other personperson or entity (other than to wholly-owned subsidiaries of it or advances to employees in the ordinary course of business consistent with past practice and in amounts not material to the maker of such loan or advance); (iv) pledge or otherwise encumber shares of its capital stock or any of its subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon;
(e) except as may be required by law or as contemplated by this Agreement or described on the Company Disclosure Schedule, enter into, adopt or amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer, employee or former employee or independent contractor in any manner, or (except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to it and as 33 required under existing agreements) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or performance units);
(f) acquire, sell, lease, license to others or dispose of any assets outside the ordinary course of business which individually or in the aggregate are material to the Corporation, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice which would be material to the Corporation;
(g) except as may be required as a result of a change in law or in generally accepted accounting principles, change any of the accounting principles or practices used by it;
(h) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory or writing-off notes or accounts receivable other than in the ordinary course of business;
(i) acquire or agree to acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein, other than to as specifically described on the Company Subsidiaries and Disclosure Schedule; (ii) enter into any contract or agreement other than in the ordinary course of business and consistent with past practicespractice which would be material to it; (viiii) authorize any new capital expenditure or expenditures substantially which, individually, is in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than $250,000 or, in the ordinary course aggregate, are in excess of business$2,500,000; or (viiiiv) enter into or amend any contract, agreement, commitment or arrangement with respect to providing for the taking of any of the foregoingaction that would be prohibited hereunder;
(dj) Company shall use reasonable efforts make any tax election or settle or compromise any income tax liability material to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company SubsidiariesCompany;
(ek) neither Company nor pay, discharge or satisfy any of the Company Subsidiaries shall make any change in the compensation payable claims, liabilities or to become payable to any of its officersobligations (absolute, directors accrued, asserted or employeesunasserted, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise), other than (i) the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and the Company Subsidiaries or incurred in the ordinary course of business consistent with past practice, (ii) as may be required under applicable Law practice or customary 34 fees and expenses relating to the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andtransactions contemplated by this Agreement;
(fl) neither Company nor settle or compromise any pending or threatened suit, action or claim relating to the transactions contemplated hereby; or
(m) take, or agree in writing or otherwise to take, any of the Company Subsidiaries shall (iactions described in this Section 5.1(a) knowingly take through 5.1(l) or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take make any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) representations or warranties of the CodeCompany contained in this Agreement untrue or incorrect as of the date when made.
Appears in 2 contracts
Sources: Merger Agreement (Nick Acquisition Corp), Merger Agreement (National Education Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement to the Effective Time, unless Parent shall Except as (x) otherwise agree in writing, or as otherwise expressly contemplated by this Agreement, (y) required by the terms of any Contract existing on the date hereof between Parent or any Exhibit heretoof its Subsidiaries and any other Person or (z) as otherwise set forth in Section 4.2 of the Parent Letter, or Parent shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of the Company Disclosure Letter:(which shall not be unreasonably withheld, conditioned or delayed):
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell declare, set aside or pledge pay any dividends on, or agree to sell make any other actual, constructive or pledge any stock owned by it deemed distributions in respect of, any of the Company Subsidiaries; its capital stock, or otherwise make any payments to its stockholders in their capacity as such, other than (A) annual aggregate cash dividends by Parent to its stockholders with respect to Parent Common Stock not in excess of $0.50 per share with usual declaration, record and payment dates or (B) dividends or distributions paid or made by any wholly owned Subsidiary of Parent, (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except with respect to any transaction by a wholly owned Subsidiary of Parent which remains a wholly owned Subsidiary of Parent after consummation of such transaction, (iii) purchase, redeem or otherwise acquire, or modify or amend, any shares of capital stock of Parent or any Subsidiary or any other securities thereof or any rights, warrants or options to acquire, any such shares or other securities, other than (A) in the ordinary course of business consistent with past practice in connection with any net share settlement or Tax withholding pursuant to any Parent Plans or (B) repurchases, redemptions or other acquisitions of the capital stock of Parent or any Subsidiary pursuant to any plans, arrangements or contracts between Parent or any of its Subsidiaries existing on the date hereof in an amount not to exceed 5% of the fully diluted number of shares of Parent capital stock outstanding after giving effect to the Merger, (iv) redeem the rights issued under the Parent Rights Agreement or amend or terminate the Parent Rights Agreement prior to the Effective Time other than (A) as required to do so by a court of competent jurisdiction (in which case, to the extent permitted by such court of competent jurisdiction, Parent shall provide the Company Subsidiarieswith written notice at least three Business Days prior to taking any such action), (B) as required to comply with the Parent Board of Director’s fiduciary obligations or (C) in response to a shareholder proposal or in response to a request or recommendation from an institutional shareholder or institutional shareholder service if, in each case, such action would not adversely affect the consummation of the Merger, in any material respect, or affect the holders of Company Common Stock whose shares are converted into Parent Common Stock at the Effective Time in a manner different, in any material respect, than holders of Parent Common Stock prior to the Effective Time or (v) amend, modify or waive any material provision of the Stockholder’s Agreement, dated as of September 8, 2000, among Parent and the stockholders from time to time party thereto in a manner that would adversely affect the consummation of the Merger or affect the holders of Company Common Stock whose shares are converted into Parent Common Stock at the Effective Time in a manner different than holders of Parent Common Stock prior to the Effective Time;
(cb) neither Company nor any of the Company except for transactions among Parent and its wholly owned Subsidiaries shall or among Parent’s wholly owned Subsidiaries (i) authorize for issuance, issue or sell any additional shares issue, deliver, sell, pledge, dispose of, grant, transfer or rights otherwise encumber or agree or commit to issue, deliver, sell, pledge, dispose of, grant, transfer or encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into or exchangeable for, or any rights, warrants or options of any kind to acquire acquire, any shares ofsuch shares, its capital stock of any class voting securities, equity equivalent or convertible or exchangeable securities, other than (whether through A) the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Parent Shares reserved for issuance upon the exercise of Employee options to purchase Parent Common Stock Options, (b) or the issuance of Parent Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose in settlement of, transfer, lease, license, mortgage, pledge or encumber any fixed upon exercise or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments inconversion of, any other personequity-based compensation award of Parent under a Parent Plan, (B) the issuance of any securities of Parent pursuant to a Parent Plan, (C) the issuance of Parent Shares or other than to Company Subsidiaries and other than securities of Parent in the ordinary course of business and consistent connection with past practices; (vibona fide acquisitions, mergers, strategic partnership transactions or similar transactions not prohibited by Section 4.2(d) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viiiD) the issuance of Parent Shares or other securities of Parent in connection with Parent’s general capital raising efforts or (ii) enter into any contract, agreement, commitment or arrangement with respect to amendment of any material term of any of its outstanding securities;
(c) amend the foregoingParent Charter or the Parent Bylaws in a manner that would adversely affect the consummation of the Merger or affect the holders of Company Common Stock whose shares are converted into Parent Common Stock at the Effective Time in a manner different than holders of Parent Common Stock prior to the Effective Time;
(d) Company shall use reasonable efforts acquire or agree to preserve intact acquire by merging or consolidating with, by purchasing a substantial portion of the assets of or equity in or by any other manner, any totalisator business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;or any advance deposit wagering business; or
(e) neither Company nor authorize, recommend, publicly propose or announce an intention to do any of the Company Subsidiaries shall make any change in the compensation payable foregoing or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans Contract to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor do any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Churchill Downs Inc), Merger Agreement (Youbet Com Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER7.1 Conduct of Business by Company Pending The Merger. From the date of this Agreement until the earlier of (i) the time that persons designated by Parent are appointed as directors of Company pursuant to Section 3.4 hereof and (ii) the Effective Effec- tive Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, any Schedule hereto or any Exhibit hereto, or the Company Disclosure LetterSchedule:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practicespractice, and there shall be no material changes change in the conduct of the operations of Company or any and Company SubsidiarySubsidiaries taken as a whole and, to the extent consistent therewith, each of Company and Company Subsidiaries shall use its reasonable best efforts to preserve its business organization intact, maintain its existing relations with customers, suppliers, employees and business associates, and preserve the goodwill of those having business relationships with it and Company Subsidiaries;
(b) Company shall not (i) sell or pledge or agree to sell sell, pledge, dispose of or pledge encumber any stock or other equity interests owned by it in any of the Company Subsidiaries; (ii) amend its Certificate Articles of Incorporation or Byby-Lawslaws or, except as contemplated hereby, amend, modify, consummate or redeem the Rights Agreement or Rights; or (iii) split, combine or reclassify any shares of its outstanding capital stock stock; or (iv) declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue issue, pledge, dispose of, encumber or sell any additional shares of, or rights of any kind to acquire acquire, any shares ofof or securities convertible or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance which may be issued upon the exercise or conversion of Employee Stock Optionsoutstanding rights, (b) Shares options and debentures referred to be issued pursuant to the Warrant Agreement and (c) the Employee Sharesin Section 6.2 hereof; (ii) except as otherwise permitted herein acquire, dispose of, transfer, lease, guarantee, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 200,000 in any one or a series of related transactions or more than $1,000,000 in the aggregate other than ordinary course acquisitions of supplies used in the ordinary course day-to-day operations of business and consistent with past practicesCompany; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practicesliabilities; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a wholly-owned Company Subsidiary in the ordinary course of business and consistent with past practicespractices in an amount in excess of $1,000,000 in the aggregate; (v) make any loans, advances or capital contributions to, or investments in, any other person, other person in an amount in excess of $200,000 in any one or a series of related transactions or more than to Company Subsidiaries and other than $1,000,000 in the ordinary course of business and consistent with past practicesaggregate; (vi) authorize capital expenditures substantially (other than presently budgeted capital expenditures set forth on Schedule 7.1(c)) in excess of the amount currently budgeted therefor; (vii) permit $200,000 in any insurance policy naming Company or any Company Subsidiary as a beneficiary one or a loss payee to be cancelled series of related transactions or terminated other than $500,000 in the ordinary course of businessaggregate; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.or
Appears in 2 contracts
Sources: Merger Agreement (Vencor Inc), Merger Agreement (Transitional Hospitals Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER7.1 Conduct of Business by Company Pending The Merger. From the date of this Agreement until the earlier of (i) the time that persons designated by Parent are appointed as directors of Company pursuant to Section 3.4 hereof and (ii) the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, any Schedule hereto or any Exhibit hereto, or the Company Disclosure LetterSchedule:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practicespractice, and there shall be no material changes change in the conduct of the operations of Company or any and Company SubsidiarySubsidiaries taken as a whole and, to the extent consistent therewith, each of Company and Company Subsidiaries shall use its reasonable best efforts to preserve its business organization intact, maintain its existing relations with customers, suppliers, employees and business associates, and preserve the goodwill of those having business relationships with it and Company Subsidiaries;
(b) Company shall not (i) sell or pledge or agree to sell sell, pledge, dispose of or pledge encumber any stock or other equity interests owned by it in any of the Company Subsidiaries; (ii) amend its Certificate Articles of Incorporation or Byby-Lawslaws or, except as contemplated hereby, amend, modify, consummate or redeem the Rights Agreement or Rights; or (iii) split, combine or reclassify any shares of its outstanding capital stock stock; or (iv) declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue issue, pledge, dispose of, encumber or sell any additional shares of, or rights of any kind to acquire acquire, any shares ofof or securities convertible or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance which may be issued upon the exercise or conversion of Employee Stock Optionsoutstanding rights, (b) Shares options and debentures referred to be issued pursuant to the Warrant Agreement and (c) the Employee Sharesin Section 6.2 hereof; (ii) except as otherwise permitted herein acquire, dispose of, transfer, lease, guarantee, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 200,000 in any one or a series of related transactions or more than $1,000,000 in the aggregate other than ordinary course acquisitions of supplies used in the ordinary course day-to-day operations of business and consistent with past practicesCompany; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practicesliabilities; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a wholly-owned Company Subsidiary in the ordinary course of business and consistent with past practicespractices in an amount in excess of $1,000,000 in the aggregate; (v) make any loans, advances or capital contributions to, or investments in, any other person, other person in an amount in excess of $200,000 in any one or a series of related transactions or more than to Company Subsidiaries and other than $1,000,000 in the ordinary course of business and consistent with past practicesaggregate; (vi) authorize capital expenditures substantially (other than presently budgeted capital expenditures set forth on Schedule 7.1(c)) in excess of the amount currently budgeted therefor; (vii) permit $200,000 in any insurance policy naming Company or any Company Subsidiary as a beneficiary one or a loss payee to be cancelled series of related transactions or terminated other than $500,000 in the ordinary course of businessaggregate; or (viiivii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, except pursuant to existing agreements, grant any severance or termination pay to, or enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing PlanPlan or voluntarily accelerate the vesting of any stock options, restricted stock or other compensation or benefit or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law law or the terms of any existing Plan or agreementagreement provided, however, that Company and Company Subsidiary may amend any Plan to provide for the effectuation thereof immediately prior to the expiration of the Amended Offer and/or the Effective Time so long as the amounts payable thereunder, individually or in the aggregate, are not increased.
(iiie) neither Company nor any Company Subsidiary shall settle or compromise any material claims or litigation or, except in the granting ordinary and usual course of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andbusiness, modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(f) neither Company nor any of the Company Subsidiaries Subsidiary shall (i) knowingly take take, or allow omit to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take take, any action that would jeopardize qualification is reasonably likely to cause any representation and warranty of Company in this Agreement to become untrue in any material respect;
(g) neither Company nor any Company Subsidiary shall make any Tax election or permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated without notice to Purchaser, except in the ordinary and usual course of business; and
(h) neither Company nor any Company Subsidiary will authorize or enter into an agreement to do any of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Transitional Hospitals Corp), Merger Agreement (Transitional Hospitals Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1 Conduct of Business of the Company Pending the Merger. From Except as required or permitted under this Agreement or set forth in the Company’s Disclosure Letter, or with the consent of Buyer (which consent shall not be unreasonably withheld or delayed), the Company agrees as to itself and to its Subsidiaries that during the period from the date of this Agreement to and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or
(1) the business of the Company Disclosure Letterand its Subsidiaries shall be conducted in all material respects in the ordinary course of business consistent with past practices,
(2) the Company and its Subsidiaries shall use commercially reasonable best efforts to preserve intact in all material respects their business organization, to keep available the services of their respective present executive officers and key employees, and to preserve in all material respects the goodwill of those having business relationships with the Company and its Subsidiaries, and
(3) neither the Company nor its Subsidiaries shall:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company amend or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend otherwise change its Certificate of Incorporation or By-Laws; Bylaws (or similar organizational documents of the Company’s Subsidiaries);
(iiib) split, combine or reclassify any shares of its outstanding capital stock or stock, declare, set aside or pay any dividend or other distribution payable in cash, stock or propertyproperty in respect of its capital stock, or redeem directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiariesother securities;
(c) neither Company nor any issue, sell, pledge, dispose of, encumber, deliver or authorize, agree or commit to issue, sell, pledge, dispose of the Company Subsidiaries shall (i) authorize for issuance, issue or sell deliver any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class or any other ownership interest (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)) other than (A) Company Stock Options awarded in the ordinary course of business in amounts consistent with past practice and (B) shares of Company Common Stock issued to holders of Company Stock Options upon exercise or subject to Section 2.4(f)(vii) hereof, except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and Company ESPP (cprovided that such issuance will not cause a breach of the representation contained in Section 3.2(d) the Employee Shares; of this Agreement);
(iid) acquire, (i) dispose of, transfer, lease, license, mortgage, pledge or encumber any material fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practicespractice; (iiiii) incurincur or assume any material indebtedness, assume liability or prepay any indebtedness obligation or any other material liabilities or issue any debt securities other than in the ordinary course of business and consistent with past practicespractice; (iii) modify, amend or terminate any material indebtedness of the Company or its Subsidiaries; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person Person in a material amount other than a Company Subsidiary in the ordinary course of business and consistent with past practicespractice; (v) make any material loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated person other than in the ordinary course of business; (vi) fail to maintain insurance consistent with past practices for its business; (vii) make any settlement of pending or threatened actions, suits or other similar claims (including penalties, fees, or taxes related thereto) for amounts in excess of $100,000 or cancel, modify or waive any material claims or material rights; (viii) acquire (by merger, consolidation or acquisition of stock or assets) any material company, corporation, partnership or other business organization or division thereof; (ix) make any changes with respect to accounting policies or material procedures (other than as required by changes in GAAP or to comply with Applicable Law) or (viiix) enter into any material lease for real property;
(e) repay any guarantors of the Company’s or its Subsidiaries’ material obligations or pledgors of collateral to secure the Company’s or its Subsidiaries’ material obligations (including collateral pledged to secure letters of credit relating to such obligations) if and to the extent such guarantors pay any amount under the guaranty, or such pledgors have such collateral foreclosed upon, in connection with any of the Company’s or its Subsidiaries’ material obligations, on behalf of the Company or its Subsidiaries;
(f) make capital expenditures or commitment for the purchase of fixed assets in excess of $500,000;
(g) other than in the ordinary course of business, terminate or make any material amendment or modification to any Material Contract or enter into an agreement or other arrangement that would reasonably be likely to fall within the definition of “Material Contract” if such new agreement or arrangement were in place during the time period set forth in such definition; or
(h) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) . Notwithstanding anything to the contrary contained herein, the Company shall use reasonable efforts be permitted to preserve intact take the business organization following actions: (i) pay any judgment or settlement of Company and pending legal actions, suits or other similar claims (including penalties, fees, or taxes related thereto); (ii) repay any guarantors of the obligations of the Company Subsidiaries, to keep available the services or any of its and their present officers and key employees, Subsidiaries or pledgors of collateral to secure the obligations of the Company or any of its Subsidiaries (including collateral pledged to secure letters of credit relating to such obligations) if and to preserve the goodwill of those having business relationships extent such guarantors pay any amount under the guaranty, or such pledgors have such collateral foreclosed upon, in connection with it and the Company Subsidiaries;
(e) neither Company nor any of the obligations of the Company Subsidiaries shall make any change in or its Subsidiaries, on behalf of the compensation payable Company or to become payable to any of its officersSubsidiaries, directors or employees(iii) subject to Section 5.2 hereof, enter into or amend any employment, severance, termination or other similar agreement, adopt hire any new Plan employees or amend in any material respect terminate any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreementcourse, and (iiiiv) pay compensation and severance as permitted under Section 5.2, below. The Company shall deliver to Buyer a copy of any new agreement or other arrangement entered into after the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action date hereof that would jeopardize qualification of the Merger as a reorganization reasonably be likely to fall within the meaning definition of section 368(a) of “Material Contract” if such agreement or other arrangement were in place during the Codetime period set forth in such definition.
Appears in 2 contracts
Sources: Merger Agreement (Marketwatch Inc), Merger Agreement (Dow Jones & Co Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1. From Conduct of the date Business of the Company. Except as otherwise expressly contemplated by this Agreement Agreement, prior to the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or neither the Company Disclosure Letternor any of the Company Subsidiaries will, without the prior written consent of the Parent:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (ib) authorize for issuance, issue issue, sell, deliver or agree or commit to issue, sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class deliver (whether through the issuance or granting of additional options, warrants, commitments, subscriptions, rights to purchase or otherwise)) any shares of capital stock of any class or any securities convertible into or exercisable for shares of capital stock of any class, except for (a) unissued Shares reserved for issuance upon as required by any employee benefit or stock option plan or agreement existing as of the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and date hereof;
(c) the Employee Shares; (ii) acquiresplit, dispose ofcombine or reclassify any shares of its capital stock, transferdeclare, lease, license, mortgage, pledge set aside or encumber pay any fixed dividend or other assets distribution (whether in excess cash, stock or property or any combination thereof) in respect of $5,000,000 in its capital stock or partnership interest, or redeem or otherwise acquire any one shares of its capital stock, except any distribution made by any of the Company Subsidiaries to the Company or a series any of related transactions the other Company Subsidiaries; or
(d) merge with or into or consolidate with any other Person (other than in between the ordinary course Company Subsidiaries) or make any acquisition of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness all or any other material liabilities other than in part of the ordinary course of assets or capital stock or business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than Person except for tangible property acquired in the ordinary course of business.
5.2. Conduct of the Business of Parent and the Purchaser. Except as contemplated by this Agreement, during the period from the date of this Agreement to the Effective Time, the Parent and the Parent Subsidiaries will take no action that could reasonably be deemed to have a material adverse effect on the ability of the parties to consummate the transactions contemplated by this Agreement, or the timing thereof. Without limiting the generality of the foregoing, and except as otherwise expressly contemplated by this Agreement, prior to the Effective Time, neither the Parent nor any of the Parent Subsidiaries will, without the prior written consent of the Company:
(a) amend the Articles of Incorporation or By-Laws of Parent in a manner which would materially adversely change the rights of holders of Parent Common Stock;
(b) during the period in which the Parent Common Stock Value is being determined, pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, except any distribution made by any of the Parent Subsidiaries to the Parent or any of the other Parent Subsidiaries; or or
(viiic) enter into any contract, agreement, commitment or arrangement with respect agree to do any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 2 contracts
Sources: Merger Agreement (Nco Portfolio Management Inc), Merger Agreement (Nco Group Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1. From Conduct of Business by the Company Pending the Merger. Except as contemplated by this Agreement, neither the Company nor any Subsidiary shall, between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or Time do any Exhibit hereto, or of the Company Disclosure Letterfollowing without the prior written consent of Parent:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company amend or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend otherwise change its Certificate of Incorporation or By-Laws; laws or equivalent organizational documents;
(iiib) split, combine or reclassify issue any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any class of the Company Subsidiaries;
(c) neither Company nor or any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of, its of such capital stock of the Company or any class Subsidiary (whether through except for the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued issuable pursuant to employee stock options outstanding on the Warrant Agreement date hereof and except in connection with the establishment of new wholly owned subsidiaries for new locations by the Company);
(c) the Employee Shares; (ii) acquiresell, dispose of, transfer, lease, license, mortgage, pledge transfer or encumber in any fixed material respect any assets of the Company or other assets any Subsidiary for consideration in excess of $5,000,000 1,000,000 in any one the aggregate except for transactions relating to the establishment of new locations or a series modifications or improvements to its existing locations by the Company in the ordinary course of related its business, and except for other transactions other than in the ordinary course of business and consistent with past practicespractice provided, however, that the Company shall not sell, transfer or encumber any assets for consideration which, in the opinion of the board, is less than fair value;
(d) declare or pay any dividend or other distribution with respect to any of its capital stock;
(e) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire any of its capital stock;
(i) acquire any corporation, partnership, other business organization or any division thereof, except for the establishment of new wholly owned subsidiaries for new locations by the Company; (iiiii) incurexcept for borrowings under existing credit facilities, assume or prepay incur any indebtedness for borrowed money or issue any debt securities, guarantee any indebtedness for borrowed money or debt securities of another person, issue or sell any warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any "keep well" or other material liabilities other than agreement to maintain any financial statement condition of another person (except a Subsidiary) or enter into any arrangement having the economic effect of any of the foregoing, except in the ordinary course of business and consistent with past practices; (iv) assumepractice, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company Subsidiaries or any Subsidiary; (iii) authorize capital expenditures which are, in the aggregate, in excess of $500,000 for the Company and the Subsidiaries, except for capital expenditures relating to the establishment of new locations by the Company in the ordinary course of its business, and other capital expenditures in the ordinary course of business consistent with past practice; or (iv) enter into any agreement with respect to any matter set forth in this Section;
(g) except as provided in Section 2.8, increase the compensation payable or to become payable to its current and former officers, directors or employees, except for increases in compensation (including bonuses) of employees of the Company or any Subsidiary of the Company in accordance with past practices, or, other than in accordance with past practices and policies, grant any severance or termination pay to, or enter into any employment or severance agreement with, any current or former director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into or materially amend any collective bargaining agreement or benefit plans;
(h) other than as required by generally accepted accounting principles, make any material change to its accounting policies or procedures;
(i) make any material elections or changes in elections for Tax purposes except in accordance with past practice;
(j) pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except for the payment, discharge or satisfaction (x) of liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with their terms as in effect on the date hereof or (y) of claims settled or compromised to the extent permitted by Section 5.1(k), or waive, release, grant, or transfer any rights of material value or modify or change in any material respect any existing license, lease, contract or other document, other than in the ordinary course of business and consistent with past practices; practice;
(vik) authorize capital expenditures substantially settle or compromise any litigation (whether or not commenced prior to the date of this Agreement) other than settlements or compromises of litigation (i) where the amount paid in excess settlement or compromise does not exceed $100,000 and (ii) potential settlements or compromises which are described in the Company Disclosure Schedule;
(l) establish any new lines of credit or other credit facilities or replace any existing credit facilities;
(m) take any action which would make any representation or warranty of the amount currently budgeted therefor; Company in this Agreement subject to a material qualifier untrue or incorrect and any representation or warranty of the Company in this Agreement that is not so qualified untrue or incorrect in any material respect;
(viin) permit adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (subject to the Company's right to take action specifically permitted by Section 6.5(b));
(o) enter into any insurance policy naming Company new collective bargaining agreement or any successor collective bargaining agreement to any collective bargaining agreement disclosed in the Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than Disclosure Schedule except in the ordinary course of business; or ;
(viiip) enter into agree to any contract, agreement, commitment or arrangement with respect modifications to any of the foregoingLTAC Leases, or waive any rights under the LTAC Leases, in any respect which would materially and adversely affect the rights of the Company thereunder;
(dq) Company shall use reasonable efforts take any action to preserve intact exempt under or make not subject to (x) Section 203 of Delaware Law or (y) any other Takeover Statute or state law that purports to limit or restrict business combinations or the business organization of Company and the Company Subsidiariesability to acquire or vote shares, to keep available the services of its any person or entity (other than Parent, Purchaser and their present officers affiliates) or any action taken thereby, which person, entity or action would have otherwise been subject to the restrictive provisions thereof and key employees, and not exempt therefrom except to preserve the goodwill of those having business relationships with it and the Company Subsidiariesextent specifically permitted pursuant to Section 6.5(b);
(er) neither Company nor authorize any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Planof, or make commit or agree to take any loans to any of its officersof, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000foregoing actions; andor
(fs) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize result in the treatment of Parentconditions to the Offer or the merger not being satisfied, subject to the Company's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly right to take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codesuch actions specifically permitted by Section 6.5(b).
Appears in 2 contracts
Sources: Merger Agreement (Select Medical of Mechanicsburg Inc), Merger Agreement (Intensiva Healthcare Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From LSC agrees on its own behalf and on behalf of its subsidiaries that, except as may be agreed to by the Parties hereto or may be permitted by this Agreement, during the period from the date of this Agreement to and continuing until the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of Company LSC and the Company Subsidiaries its subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company LSC and its subsidiaries shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiariesits subsidiaries; (ii) amend its Certificate Articles of Incorporation or By-LawsBylaws; or (iii) split, combine combine, or reclassify any shares of its outstanding capital stock or declare, set aside aside, or pay any dividend or other distribution payable in cash, stock or propertystock, or redeem property in respect of its capital stock, or directly or indirectly redeem, purchase, or otherwise acquire any shares of its capital stock or other securities or shares of the capital stock or other securities of any of the Company Subsidiariesits subsidiaries;
(c) neither Company nor any of the Company Subsidiaries LSC and its subsidiaries shall not (i) authorize for issuance, issue issue, sell, pledge, dispose of, encumber, deliver, or sell agree or commit to issue, sell, pledge, or deliver any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class or exchangeable into shares of stock of any class or any Voting Debt (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase purchase, or otherwise), except for (a) unissued that LSC may issue Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares required to be issued pursuant upon exercise of existing stock options, warrants, or similar plans, or under other contractual commitments previously made, which options, warrants, plans, or commitments have been disclosed in writing to HBOA in the Warrant Agreement and (c) the Employee SharesLSC Schedule; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge pledge, or encumber any fixed or other substantial assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume assume, or prepay any indebtedness material indebtedness, liability, or obligation or any other material liabilities or issue any debt securities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse endorse, or otherwise become liable or responsible (whether directly, contingently contingently, or otherwise) for the obligations of any other person (other than a Company Subsidiary subsidiary) in a material amount other than in the ordinary course of business and consistent with past practices; (v) make any material loans, advances advances, or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and subsidiaries, other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any fail to maintain adequate insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of businessconsistent with past practices for their businesses and properties; or (viiivii) enter into any contract, agreement, commitment commitment, or arrangement with respect to any of the foregoing;
(d) Company LSC shall use its reasonable efforts efforts, consistent with prudent business practice, to preserve intact the business organization of Company LSC and the Company Subsidiariesits subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiariestheir respective subsidiaries and LSC shall use its reasonable efforts to reduce expenses where applicable;
(e) neither Company nor any of the Company Subsidiaries LSC and its subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken or fail to take any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; act or (ii) knowingly take any action that omission would jeopardize qualification of the Merger as a reorganization "reorganization" within the meaning of section Section 368(a) of the Code; and
(f) LSC and its subsidiaries shall use reasonable efforts to prevent any representation or warranty of LSC herein from becoming untrue or incorrect in any material respect.
Appears in 1 contract
Sources: Merger Agreement (Hboa Holdings Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement AeroAstro and each Principal Shareholder covenants and agrees that, prior to the Effective Time, unless Parent shall Radyne otherwise agree agrees in writing, writing or as otherwise expressly contemplated or permitted by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective The businesses of Company and the Company Subsidiaries AeroAstro shall be conducted only in the ordinary course, on an arm’s length basis and usual course in accordance in all material respects with all applicable laws, rules and regulations and past custom and practice; AeroAstro shall maintain its facilities in good operating condition, ordinary wear and tear excepted; and AeroAstro shall use its reasonable best efforts to preserve intact its business organization and goodwill, keep available the services of its officers and employees as a group and maintain satisfactory relationships with suppliers, distributors, customers and others having business and consistent relationships with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiaryit;
(b) Company AeroAstro shall not not, directly or indirectly, do or permit to occur any of the following: (i) sell issue, sell, pledge, dispose of or pledge or agree to sell or pledge encumber any stock owned by it in additional shares of any of its capital stock or any of its assets, except in the Company Subsidiariesordinary course of business; (ii) grant, reprice, revise, or accelerate the vesting of any options, warrants, conversion privileges or rights of any kind to acquire any shares of any of its capital stock; (iii) amend or propose to amend its Certificate Articles of Incorporation or By-LawsBylaws; or (iiiiv) split, combine or reclassify any outstanding shares of its outstanding capital stock AeroAstro Common Stock, or declare, set aside or pay any dividend or other distribution payable in cash, stock or propertystock, or redeem property or otherwise with respect to shares of AeroAstro Common Stock; (v) redeem, purchase or acquire or offer to acquire any shares of its capital stock AeroAstro Common Stock or shares other securities of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind AeroAstro except from former AeroAstro employees pursuant to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practicesrepurchase rights; (vi) authorize capital expenditures substantially in excess acquire (by merger, exchange, consolidation, acquisition of the amount currently budgeted thereforstock or assets or otherwise) any corporation, partnership, joint venture or other business organization or division or material assets thereof; (vii) permit incur any insurance policy naming Company indebtedness for borrowed money or issue any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in debt securities, except the ordinary course borrowing of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) working capital in the ordinary course of business and consistent with past practice, or grant any mortgages, liens or security interests; (viii) make any investments other than short-term United States Treasury obligations or short-term certificates of deposit of a commercial bank or trust company; (ix) enter into or propose to enter into, or modify or propose to modify, any agreement, arrangement or understanding with respect to any of the matters set forth in this Section 5.1(b); or (x) fail to maintain any existing insurance coverage in all material respects of all types in effect as of the date hereof;
(c) AeroAstro shall not, directly or indirectly, enter into or modify any contract, agreement or understanding, written or oral, fixed or contingent, individually or in the aggregate as to any third party and its affiliates or subsidiaries as a group, that involves consideration or performance of AeroAstro of a value exceeding $25,000 or a term exceeding one year;
(d) Except as required by law, rule or regulation, AeroAstro shall not (i) enter into or modify any employment, severance or similar agreements or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, any officers or directors or consultants or (ii) other than as may be required under applicable Law or set forth on Schedule 5.1, take any action with respect to the terms grant of any existing Plan bonuses, salary increases, severance or termination pay or with respect to any increase of benefits payable in effect on the date hereof;
(e) Other than as set forth on Schedule 5.1, AeroAstro shall not adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, trust, fund or group arrangement for the benefit or welfare of any employees or any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, and (iii) trust, fund or arrangements for the granting benefit or welfare of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andany director;
(f) neither Company Neither AeroAstro nor any Principal Shareholder, officer, director, employee, agent or representative thereof shall, for a period expiring on the earlier of the Company Subsidiaries shall (i) knowingly take or allow the termination of this Agreement pursuant to be taken any action which would jeopardize the treatment terms of Parent's acquisition of Company as a pooling of interests for accounting purposes; Article 9 herein or (ii) knowingly July 31, 2007, solicit, negotiate, consider or encourage the possible sale to any other person or entity of all or any portion of the business or of the assets of AeroAstro, whether by merger, sale of stock, sale, license or lease of assets, or otherwise; nor shall they provide any confidential information to any person or entity. AeroAstro will promptly notify Radyne if any of them is approached by any person or entity interested in acquiring or investing in AeroAstro, and will provide Radyne with the name of the person and the details of such inquiry or proposal;
(g) Neither AeroAstro nor any Principal Shareholder shall take any action that would jeopardize qualification render, or that reasonably may be expected to render, any representation or warranty made by it in this Agreement untrue at, or at any time prior to, the Effective Time. AeroAstro and each Principal Shareholder agrees to promptly notify Radyne (i) of any emergency or other change in the normal course of AeroAstro’s business or of any governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated); (ii) the occurrence or failure to occur of any event, which occurrence or failure would be likely to cause any representation or warranty on AeroAstro’s or any Principal Shareholder’s part contained in this Agreement to be untrue or inaccurate in any material respect at, or at any time prior to, the Effective Time; and (iii) any failure of AeroAstro or any Principal Shareholder to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; and
(h) Without the consent of Radyne, AeroAstro shall not make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to AeroAstro, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the Merger as a reorganization within limitation period applicable to any Tax claim or assessment relating to AeroAstro, or take any other similar action relating to the meaning filing of section 368(a) any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the Codeeffect of increasing the Tax liability of AeroAstro for any period ending after the Effective Time or decreasing any Tax attribute of AeroAstro existing on the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Radyne Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 6.01 Conduct of Business by the Company Pending the Merger. From The Company agrees that, between the date of this Agreement to and the Effective TimeCut-Off Date, unless Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as otherwise expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule or Section 7.16 of this Agreement, neither the Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or any Exhibit heretoindirectly, do, or propose to do, any of the Company Disclosure Letterfollowing without the prior written consent of Parent:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company amend or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend otherwise change its Certificate of Incorporation or By-Laws; laws or equivalent organizational documents;
(iiib) splitissue, combine sell, pledge, dispose of, grant, encumber, or reclassify authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares class of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor or any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock, its capital stock of or any class other ownership interest (whether through the issuance or granting of optionsincluding, warrantswithout limitation, commitments, subscriptions, rights to purchase or otherwiseany phantom interest), of the Company or any Subsidiary or (ii) except for (a) unissued Shares reserved for issuance upon in the exercise ordinary course of Employee Stock Optionsbusiness and in a manner consistent with past practice, (b) Shares to be issued pursuant to any assets of the Warrant Agreement and Company or any Subsidiary;
(c) the Employee Sharesdeclare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any significant amount of assets; (ii) acquireincur any indebtedness for borrowed money or issue any debt securities or assume, dispose ofguarantee or endorse, transferor otherwise become responsible for, leasethe obligations of any person, licenseor make any loans or advances, mortgage, pledge or encumber grant any fixed or other assets in excess of $5,000,000 security interest in any one of its assets; (iii) enter into any contract or a series of related transactions agreement other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practicespractice; (iv) assumeauthorize, guaranteeor make any commitment with respect to capital expenditures which are, endorse or otherwise become liable or responsible (whether directlyin the aggregate, contingently or otherwise) in excess of $100,000 for the obligations of any other person other than Company and the Subsidiaries taken as a Company Subsidiary in the ordinary course of business and consistent with past practiceswhole; or (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into or amend any contract, agreement, commitment or arrangement with respect to any of the foregoingmatter set forth in this Section 6.01(e);
(df) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in hire additional employees or increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries, wages, bonuses, incentives or pension benefits of employees of the Company or any of its officers, Subsidiary who are not directors or employeesofficers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or of any Subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, severancetermination, termination severance or other similar plan, agreement, adopt trust, fund, policy or arrangement for the benefit of any new Plan director, officer or amend employee, except for the stay put cash bonus payments to non-executive employees approved by the Board on September 22, 2000 as described in Section 6.01(f) of the Disclosure Schedule;
(g) change any material respect any existing Plan, or of the accounting methods used by it unless required by GAAP;
(h) make any loans to Tax election or settle or compromise any of its officersUnited States federal, directors state, local or employees non-United States income Tax liability;
(i) pay, discharge or make satisfy any changes in its existing borrowing claim, liability or lending arrangements for obligation (absolute, accrued, asserted or on behalf of any of such personsunasserted, whether contingent on consummation of the Merger or otherwise), other than (i) the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the September Balance Sheet or subsequently incurred in the ordinary course of business and consistent with past practice;
(iij) as may be required under applicable Law amend, modify or consent to the terms termination of any existing Plan Material Contract, or agreementamend, and (iii) waive, modify or consent to the granting termination of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andthe Company's or any Subsidiary's rights thereunder;
(fk) neither Company nor commence or settle any Action; or
(l) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing.
Appears in 1 contract
Conduct of Business Pending the Merger. SECTION 5.1 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by this Agreement or described in Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From 5.1 of the Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement to the Effective TimeAgreement, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Lettershall, and shall cause its subsidiaries, to:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only conduct its business in the ordinary and usual course of business and consistent with past practicespractice, except as contemplated by this Agreement or the Purchase and there shall be no material changes in the conduct of the operations of Company or any Company SubsidiarySale Agreement;
(b) Company shall not (i) amend or propose to amend its charter or by-laws, (ii) split, combine or reclassify its outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise;
(c) not issue, sell or pledge, or agree to issue, sell or pledge any additional shares of, or any options, warrants or rights of any kind to acquire any shares of its capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock;
(d) use all reasonable efforts to preserve intact its business organizations and goodwill, keep available the services of its officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with the Company and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement;
(e) confer on a regular and frequent basis with one or more designated representatives of Parent to report operational matters of materiality and the general status of ongoing operations;
(f) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice;
(g) not adopt, enter into or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employee or retiree, except as required to comply with changes in applicable law;
(h) not sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; its subsidiaries or any other entity in which it has an equity interest;
(iii) amend its Certificate not enter into any contract or commitment with respect to any capital expenditure in an amount in excess of Incorporation $50,000;
(j) not acquire (by merger, consolidation, or By-Laws; or (iii) split, combine or reclassify any shares acquisition of its outstanding capital stock or declareassets or otherwise) any corporation, set aside or pay any dividend partnership or other distribution payable in cashbusiness or division thereof (or any interest therein); provided, stock or property, or redeem or otherwise acquire that any shares of its capital stock or shares of the capital stock of any subsidiary of the Company Subsidiariesmay be merged with and into the Company or any other subsidiary of the Company;
(ck) neither Company nor not cancel, amend or modify, in any material respect, any contract disclosed in the Disclosure Schedule or enter into any contract that, if in effect on the date hereof, would be required to be set forth in the Disclosure Schedule;
(l) not amend or modify the Purchase and Sale Agreement or the Asset Sale Escrow Agreement;
(m) except in the ordinary course of the Company Subsidiaries shall (i) authorize for issuancebusiness, issue or sell any additional shares of, or rights of any kind to not acquire any shares ofassets or securities;
(n) except in the ordinary course of business or as permitted by the Purchase and Sale Agreement, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, not transfer, lease, license, guarantee, sell, mortgage, pledge pledge, dispose of, encumber or encumber subject to any fixed lien, any material assets or other assets in excess of $5,000,000 in incur or modify any one or a series of related transactions indebtedness for borrowed money (other than for borrowings under existing lines of credit and indebtedness for working capital in the ordinary course of business business);
(o) not make any tax election or settle or compromise any tax liability;
(p) except as required by applicable law or generally accepted accounting principles, not make any change in its method of accounting;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries (other than in connection with (A) the Merger or (B) any merger of a subsidiary of the Company with and consistent with past practices; (iii) incur, assume or prepay any indebtedness into the Company or any other material liabilities other than in subsidiary of the ordinary course of business and consistent with past practices; Company);
(ivr) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) not make any loans, advances or capital contributions to, or investments investment in, any other personPerson, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess any direct or indirect subsidiary of the amount currently budgeted therefor; Company;
(viis) permit not split, combine or reclassify any insurance policy naming of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
(t) not enter into any agreement providing for the acceleration of payment or performance or other consequence as a result of the transactions contemplated hereby or any other change of control of the Company;
(u) not purchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary as a beneficiary subsidiary or a loss payee any rights, warrants or options to be cancelled acquire any such shares or terminated other than securities;
(v) not take any action, engage in the ordinary course of business; any transaction or (viii) enter into any contract, agreement, commitment or arrangement with respect to agreement which would cause any of the foregoing;
(d) Company shall use reasonable efforts representations or warranties set forth Article IV of this Agreement to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any be untrue as of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000Effective Date; and
(fw) neither Company nor not agree, in writing or otherwise, to take any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing actions.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement to hereof until the Effective Time, unless Parent shall except as otherwise agree in writing, required or contemplated hereunder or as otherwise contemplated required by this Agreement, applicable law or any Exhibit hereto, or as set forth in Section 5.1 of the Company Disclosure LetterSchedule, the Company shall:
(a) the respective businesses of Company use all commercially reasonable efforts to conduct its business and the Company business of its Subsidiaries shall be conducted in all material respects only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock Bylaws or declare, set aside or pay any dividend or other distribution payable or payment in cash, stock or property, or redeem or otherwise acquire any shares property in respect of its capital stock or shares of the capital stock of any of the Company Subsidiariesstock;
(c) neither Company nor not reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(d) not issue, grant, sell or pledge or agree or authorize the Company Subsidiaries shall (i) authorize for issuance, issue grant, sale or sell pledge of any additional shares of, or rights of any kind to acquire any shares of, its capital stock other than the grant of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights stock options to purchase or otherwise), except for (a) unissued up to an aggregate of 5,000 Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries practice under current employee benefit plan arrangements and other than Shares issuable upon the exercise of stock options or issuable upon the exercise of convertibility features in its securities outstanding on the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiariesdate hereof;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable not acquire, sell, transfer, lease or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in encumber any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) assets except in the ordinary course of business and consistent with past practice;
(f) use all commercially reasonable efforts to preserve intact its business organizations and the business organizations of its Subsidiaries, and to keep available the services of its present key officers and employees; PROVIDED, HOWEVER, that to satisfy the foregoing obligation, the Company shall not be required to make any payments or enter into or amend any contractual arrangements or understandings, except in the ordinary course of business and consistent with past practice;
(iig) not adopt a plan of complete or partial liquidation or adopt resolutions providing for the complete or partial liquidation, dissolution, consolidation, merger, restructuring or recapitalization of the Company or any of its Subsidiaries;
(h) not grant any severance or termination pay (otherwise than pursuant to policies in effect on the date hereof) to, or enter into any employment agreement with, any of its executive officers or directors;
(i) not, except in the ordinary course of business consistent with past practice or pursuant to obligations imposed by collective bargaining agreements, increase the compensation payable or to become payable to its officers or employees, enter into any contract or other binding commitment in respect of any such increase with any of its directors, officers or other employees or any director, officer or other employee of its Subsidiaries, and not establish, adopt, enter into, make any new grants or awards under or amend, any collective bargaining agreement or Company Benefit Plan, except as required by applicable law, including any obligation to engage in good faith collective bargaining, to maintain tax- qualified status or as may be required under applicable Law by any Company Benefit Plan as the date hereof;
(j) not settle or compromise any material claims or litigation or, except in the ordinary course of business, modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, or make any payment, direct or indirect, of any material liability before the same becomes due and payable in accordance with its terms;
(k) not take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice with respect to accounting policies or procedures (including tax accounting policies and procedures), except as may be required by the SEC or the terms Financial Accounting Standards Board;
(l) not make any material tax election or permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent, except in the ordinary course of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000business; and
(fm) neither Company nor not authorize or enter into an agreement to do any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing.
Appears in 1 contract
Sources: Merger Agreement (Pacific Rehabilitation & Sports Medicine Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 5.1. From Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time (the "Interim Period"), except as set forth in Section 5.1 of the Company Disclosure Schedule or Section 5.2 or 5.3 of this Agreement or with the prior written consent of NBC, the Company shall conduct its business and shall cause the businesses of its Subsidiaries (including with respect to the Effective Timecollection of accounts receivable and the payment of accounts payable) to be conducted only in, unless Parent and the Company and its Subsidiaries shall otherwise agree not take any action except in, the ordinary course of business. By way of amplification and not limitation, except as provided in writing, or as otherwise contemplated by this Agreement, or neither the Company nor any Exhibit heretoof its Subsidiaries shall, or during the Interim Period, except as set forth in Section 5.1 of the Company Disclosure LetterSchedule or in Section 2.8, 5.2 or 5.3 of this Agreement, directly or indirectly do, or propose or agree to do, any of the following without the prior written consent of NBC, provided that solely in the case of actions set forth in clause (c), (i), (j), (k), (l) or (t) below if such consent is not denied within three (3) business days after receipt of written notice by NBC in accordance with the provisions hereof, such consent shall be deemed granted:
(a) the respective businesses of Company and amend or otherwise change the Company Subsidiaries shall be conducted only Charter Documents or any of the Subsidiary Documents or agree to any change in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company SubsidiaryMinority Investment Documents;
(b) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any Equity Interests of the Company shall or any of its Subsidiaries (except for the issuance of shares of Class A Common Stock issuable upon the exercise of Company Options and Company Warrants outstanding on the date hereof);
(c) sell, pledge, dispose of, mortgage, otherwise encumber or subject to any Lien any assets of the Company or any of its Subsidiaries (except for sales of immaterial assets on an arms-length basis having a fair market value not in excess of $10,000 in any individual transaction or $20,000 in the aggregate);
(i) sell declare, set aside, make or pledge pay any dividend or agree to sell other distribution (whether in cash, stock or pledge property or any stock owned by it combination thereof) in respect of any of the Company Subsidiaries; its Equity Interests, (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock Equity Interests or declareissue or authorize or propose the issuance of any other securities in respect of, set aside in lieu of or pay any dividend in substitution for its Equity Interests, (iii) amend the terms or other distribution payable in cashchange the period of exercisability of, stock or propertypurchase, or repurchase, redeem or otherwise acquire any of the Company's or its Subsidiary's securities, including shares of its capital stock Class A Common Stock, or shares of the capital stock of any of option, warrant or right, directly or indirectly, to acquire any such securities, or (iv) settle, pay or discharge any claim, suit or other action brought or threatened against the Company Subsidiarieswith respect to or arising out of an Equity Interests in the Company;
(ce) neither Company nor any of the Company Subsidiaries shall (i) authorize (A) incur any indebtedness for issuanceborrowed money, (B) issue or sell any additional shares of, debt securities or warrants or other rights of any kind to acquire any shares of, debt securities of the Company or any of its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock OptionsSubsidiaries, (bC) Shares make any loans, advances (other than to be issued pursuant employees of and consultants to the Warrant Agreement Company for travel and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than reasonable and customary expenses incurred in the ordinary course of business and consistent with past practices; (iiipractice) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other personPerson, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any direct or indirect wholly-owned Subsidiary of the Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viiiD) assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or (ii) enter into or materially amend any contract, agreement, commitment or arrangement with respect to effect any of the foregoingtransactions prohibited by this Section 5.1(e);
(di) Company shall use reasonable efforts to preserve intact grant any new or modified severance or termination arrangement or increase or accelerate any benefits payable under the business organization of Company and severance or termination pay policies in effect on the Company Subsidiariesdate hereof except as required by any existing policies or agreements, to keep available the services of its and their present officers and key employees(ii) enter into any employment agreements or increase any compensation or benefits (whether payable in cash, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(estock or otherwise) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officersemployees except as required by any existing agreements, directors or employees(iii) establish, adopt, enter into or amend any employmentcollective bargaining agreement, severanceCompany Employee Plan, termination trust, fund, program, practice, understanding, perquisite, contract, policy or arrangement for the benefit of any current or former director, officer, employee or consultant or any of their spouses, dependents or beneficiaries, except, in each case, as may be required by law;
(g) take any action to change any of the accounting policies or procedures used by it (including procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable), except as required by GAAP;
(h) make any material tax election or settle or compromise any United States federal, state, local or non-United States material tax liability, make or change any method of accounting with respect to any Tax, file any amended Tax Return with respect to any material Tax or settle or compromise any material federal, state, local or foreign Tax liability;
(i) pay, discharge or satisfy any claim, liability or obligation, including without limitation any litigation, investigation, arbitration or other similar agreementproceeding, adopt in excess of $25,000 in any new Plan individual case or amend $250,000 in the aggregate;
(j) acquire or agree to acquire any assets, other than (i) supplies in the ordinary course of business consistent with past practice or (ii) furniture, fixtures and equipment on order, in each case not exceeding $10,000 in any individual transaction or $20,000 in the aggregate;
(k) make any capital expenditures other than as set forth in the cash forecasts previously provided to NBC and in any event not exceeding $5,000 for any individual transaction or $20,000 in the aggregate, in each case other than pursuant to any currently existing Contracts included in the Cap Ex Budget;
(l) pay, discharge or satisfy any material claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except for the payment, discharge or satisfaction of (x) liabilities or obligations in accordance with their terms as in effect on the date hereof, or (y) claims settled or compromised to the extent permitted by Section 5.1(i), or waive, release, grant, or transfer any rights of material value or modify or change in any material respect any existing Planmaterial license, lease, contract or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwiseother document, other than (i) in the ordinary course of business and consistent with past practice;
(m) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (iiother than the Transactions);
(n) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof;
(o) make any investment in any other entity or business, whether by means of a purchase of Equity Interests or assets, or by any other manner;
(p) amend or modify in any material respect or terminate any material existing IP Contract, execute any new IP Contract that would be material to the business of the Company and its Subsidiaries taken as may be required under applicable Law a whole, sell, license or otherwise dispose of, in whole or in part, any material Company IP, and/or subject any material Company IP to any material Lien other than license for any generally commercially available software;
(q) enter into any agreement prohibiting or impairing the terms conduct of any existing Plan business after the Effective Time by the Surviving Company or any of its Subsidiaries or NBC or any of its Affiliates, including, without limitation, any agreements that expressly limit the ability of after the Effective Time of the Surviving Company or any of its Subsidiaries or NBC or any of its Affiliates to compete in or conduct any line of business or compete with any Person in any geographic area or during any period of time;
(r) engage in any transaction with, or enter into any agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor arrangement, or understanding with, directly or indirectly, any of the Company Subsidiaries shall Company's Affiliates, directors or officers or any holder, beneficially or of record, of more than five percent (5%) of any class of the Company's capital stock;
(s) commence any litigation, or commence any other proceeding before any Governmental Authority;
(t) enter into any other agreement or commitment (i) knowingly take or allow to that would be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; Material Contract or (ii) knowingly (A) requiring total payments by or to the Company in excess of an aggregate of $10,000 (whether in cash, Equity Interests or other barter) and (B) not terminable by the Company without penalty or payment upon no more than thirty (30) days prior notice; or
(u) authorize any of, or commit or agree to take any action that would jeopardize qualification of of, the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing actions.
Appears in 1 contract
Sources: Merger Agreement (NBC Internet Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER7.1 Conduct of Business by Company Pending The Merger. From the date of this Agreement until the earlier of (i) the time that persons designated by Parent are appointed as directors of Company pursuant to Section 3.4 hereof and (ii) the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, any Schedule hereto or any Exhibit hereto, or the Company Disclosure LetterSchedule:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practicespractice, and there shall be no material changes change in the conduct of the operations of Company or any and Company SubsidiarySubsidiaries taken as a whole and, to the extent consistent therewith, each of Company and Company Subsidiaries shall use its reasonable best efforts to preserve its business organization intact, maintain its existing relations with customers, suppliers, employees and business associates, and preserve the goodwill of those having business relationships with it and Company Subsidiaries;
(b) Company shall not (i) sell or pledge or agree to sell sell, pledge, dispose of or pledge encumber any stock or other equity interests owned by it in any of the Company Subsidiaries; (ii) amend its Certificate Articles of Incorporation or Byby-Lawslaws or, except as contemplated hereby, amend, modify, consummate or redeem the Rights Agreement or Rights; or (iii) split, combine or reclassify any shares of its outstanding capital stock stock; or (iv) declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue issue, pledge, dispose of, encumber or sell any additional shares of, or rights of any kind to acquire acquire, any shares ofof or securities convertible or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance which may be issued upon the exercise or conversion of Employee Stock Optionsoutstanding rights, (b) Shares options and debentures referred to be issued pursuant to the Warrant Agreement and (c) the Employee Sharesin Section 6.2 hereof; (ii) except as otherwise permitted herein acquire, dispose of, transfer, lease, guarantee, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 200,000 in any one or a series of related transactions or more than $1,000,000 in the aggregate other than in the ordinary course acquisitions of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;supplies used
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, except pursuant to existing agreements, grant any severance or termination pay to, or enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing PlanPlan or voluntarily accelerate the vesting of any stock options, restricted stock or other compensation or benefit or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law law or the terms of any existing Plan or agreementagreement provided, however, that Company and Company Subsidiary may amend any Plan to provide for the effectuation thereof immediately prior to the expiration of the Amended Offer and/or the Effective Time so long as the amounts payable thereunder, individually or in the aggregate, are not increased.
(iiie) neither Company nor any Company Subsidiary shall settle or compromise any material claims or litigation or, except in the granting ordinary and usual course of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andbusiness, modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(f) neither Company nor any of the Company Subsidiaries Subsidiary shall (i) knowingly take take, or allow omit to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take take, any action that would jeopardize qualification is reasonably likely to cause any representation and warranty of Company in this Agreement to become untrue in any material respect;
(g) neither Company nor any Company Subsidiary shall make any Tax election or permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated without notice to Purchaser, except in the ordinary and usual course of business; and
(h) neither Company nor any Company Subsidiary will authorize or enter into an agreement to do any of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing.
Appears in 1 contract
Sources: Merger Agreement (Vencor Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From After the date of this Agreement hereof and prior to the Effective Time, unless Parent shall otherwise agree in writing, Closing Date or as otherwise contemplated by earlier termination of this Agreement, or any Exhibit hereto, or except (i) as set forth in Section 6.1 of the Company Disclosure LetterSchedule or the Acquiror Disclosure Schedule, as applicable, (ii) in connection with specific actions that a party is explicitly required or permitted to take pursuant to this Agreement or (iii) to the extent that the other party hereto shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), each of the Company and Acquiror shall, and shall cause each of its subsidiaries to:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only conduct its business in all material respects in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell amend or pledge propose to amend its certificate of incorporation or agree to sell or pledge any stock owned by it in any of bylaws, except for the Company Subsidiaries; Amended Certificate (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or propertyotherwise, except for (x) dividends or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any distributions paid by a subsidiary of the Company Subsidiariesto the Company or another subsidiary of the Company or by a subsidiary of Acquiror to Acquiror or another subsidiary of Acquiror, as the case may be, and (y) any declaration, set-aside, or payment pursuant to the terms of any Employee Benefit Plan of the Company or its subsidiaries or the Acquiror or its subsidiaries, as the case may be;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, not issue or sell or agree to issue or sell any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its capital stock thereof, except that the Company may issue shares upon exercise of outstanding stock options or warrants referred to in Section 5.2 hereof and Company Options under the Company Employee Plans or upon the conversion of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Company Preferred Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquireAcquiror may issue shares upon exercise of outstanding stock options or warrants referred to in Section 4.2 hereof and options issuable under any stock option plan of Acquiror, dispose ofin each case in accordance with the terms thereof;
(d) not (i) incur any indebtedness for borrowed money, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than borrowings in the ordinary course of business and consistent with past practices; (including any borrowings under existing credit facilities), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of the capital stock thereof or any security convertible into or exchangeable for such capital stock, (iii) incurknowingly take or fail to take any action which action or failure to take action would cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, assume (iv) make any acquisition of any assets or prepay any indebtedness or any other material liabilities businesses, other than acquisitions of assets in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary acquisitions involving aggregate consideration of no more than $250,000, (v) sell, dispose of or encumber any material assets or businesses, other than sales of businesses or assets in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing;; and
(de) Company shall use all reasonable efforts to preserve intact the its business organization of Company and the Company Subsidiaries, to keep available the services of its goodwill and their present officers and key employees, and to preserve the goodwill of those having business relationships with it material customers and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any others having material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent relationships with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codethem.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 6.01. From Conduct of Business by the Company Pending the Merger. ----------------------------------------------------- The Company agrees that, between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as otherwise expressly contemplated by this AgreementAgreement and Section 6.01 of the Disclosure Schedule (including the capital expenditure plan set forth therein), neither the Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any Exhibit hereto, or of the Company Disclosure Letterfollowing without the prior written consent of Parent:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company amend or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend otherwise change its Certificate of Incorporation or By-Laws; laws or equivalent organizational documents;
(iiib) splitissue, combine sell, pledge, dispose of, grant, encumber, or reclassify authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares class of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor or any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock, its capital stock or any other ownership interest (including, without limitation, any phantom interest), of the Company or any class Subsidiary (whether through except for the issuance of Shares issuable pursuant to Company Stock Options outstanding on the date hereof or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant ESPP or the issuance of Company Stock Options pursuant to offer letters outstanding on the date of this Agreement that have been given to potential new employees of the Company or any Subsidiary) or (ii) any assets of the Company or any Subsidiary, except in the ordinary course of business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any assets, except, in the Employee Sharescase of assets, (A) raw materials, supplies, intermediates or similar assets used in the business on a day-to-day basis consistent with past practice, (B) replacement parts or necessary replacement equipment or (C) other equipment acquired for a price of no more than $50,000, individually, or $300,000, in the aggregate; (ii) acquireincur any indebtedness for borrowed money or issue any debt securities or assume, dispose ofguarantee or endorse, transferor otherwise become responsible for, leasethe obligations of any person, licenseor make any loans or advances, mortgage, pledge or encumber grant any fixed or other assets in excess of $5,000,000 security interest in any one of its assets except in the ordinary course of business and consistent with past practice; (iii) enter into any contract or a series of related transactions agreement other than in the ordinary course of business and consistent with past practicespractice; (iv) authorize, make any commitment with respect to, or undertake capital expenditures which are, in the aggregate, in excess of $500,000 for the Company and the Subsidiaries taken as a whole, except for completion of any construction that is in process as of the date of this Agreement or any capital expenditure that is contemplated by the capital expenditure plan set forth in Section 6.01 of the Disclosure Schedule; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 6.01(e);
(f) except as required by applicable Law and except as required to fulfill obligations of the Company and the Subsidiaries which are existing on the date hereof and have been disclosed to Parent, (i) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries or wages or benefits of employees of the Company or any Subsidiary who are not directors or officers of the Company or any Subsidiary, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or of any Subsidiary, or (iii) incurestablish, assume adopt, enter into or prepay amend in any indebtedness material respect any collective bargaining, bonus, profit- sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee other than immaterial amendments, changes in collective bargaining agreements resulting from negotiations in respect thereof in the ordinary course of business and consistent with past practice and changes in benefit plans as a result of such changes in collective bargaining agreements;
(g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice or as required to comply with GAAP or the rules and regulations of the SEC, with respect to accounting policies or procedures;
(h) make any tax election or settle or compromise any material liabilities United States federal, state, local or non-United States income tax liability;
(i) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business and consistent with past practicespractice;
(j) amend or modify any material term of, or consent to the termination of, any Material Contract, or amend, waive, or modify in any material respect or consent to the termination of the Company's or any Subsidiary's rights thereunder; provided that, if beneficial ownership (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) determined for the obligations purposes of this paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of 15% or more of the then-outstanding Shares has been acquired by any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than Parent or any of its affiliates, the Board may take all necessary action with respect to the Rights Agreement (without redeeming the Rights) so that such ownership of Shares will not result in such person being an Acquiring Person (as defined in the Rights Agreement), the occurrence of a "flip-in event" or a "flip-over event" (each, as defined in the Rights Agreement), the Rights becoming exercisable or evidenced by, and transferable pursuant to, certificates separate from the Shares or the triggering of any other provisions of the Rights Agreement, and provided, -------- further, that the Company Subsidiaries may, after consultation with Parent, amend or modify, ------- or consent to the termination of, or amend, waive or modify rights of the Company or of any Subsidiary under, any Material Contract that is of the type described by Section 4.18(a)(i), (iv), (ix), (x) or (xiv) (and is not of the type described by any other subsection of Section 4.18) other than the supply agreement between Glaxo Operations UK Limited, ChiRex (▇▇▇▇▇) Limited and ChiRex (Holdings) Limited;
(k) commence or settle any Action that would reasonably be expected to have a Material Adverse Effect;
(i) abandon, sell, or assign any item of the Company Intellectual Property, other than in the ordinary course of business and consistent with past practicespractice; (viii) authorize capital expenditures substantially grant any security interest in excess and to any item of Company Intellectual Property; or (iii) disclose, or allow to be disclosed, any confidential Company Intellectual Property, unless such Company Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against unauthorized disclosure thereof;
(m) enter into (i) any License in which the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as is a beneficiary licensee or a loss payee to be cancelled or terminated other than in the ordinary course of business; sublicensee or (viiiii) except for any License related solely to the pharmaceutical industry, any License in which the Company or any Subsidiary is a licensor or sublicensor; or
(n) announce an intention, enter into any contractformal or informal agreement or otherwise make a commitment, agreement, commitment or arrangement with respect to do any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement Prior to the Effective Time, unless Parent shall otherwise agree consummation of the Merger or earlier termination of the Merger Agreement and except as set forth in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
, as required by the express terms of the Merger Agreement or applicable law or with the prior written consent of Parent (awhich consent will not be unreasonably withheld, conditioned or delayed), ArQule will (i) the respective businesses of Company and the Company Subsidiaries shall be conducted conduct its business only in the ordinary and usual course of business and consistent with past practicespractice, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use commercially reasonable efforts to preserve intact the its present business organization of Company organizations and the Company Subsidiariesassets and maintain its relationships with material licensees, licensors and other collaboration partners, and others having material business relationships with ArQule, and (iii) use commercially reasonable efforts to keep available the services of its and their present officers directors, officers, key employees and key employeescontractors. ArQule has further agreed that, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change except as set forth in the compensation payable Disclosure Letter, as required by applicable law or as required by the express terms of Merger Agreement, ArQule will not, prior to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on the consummation of the Merger or otherwiseearlier termination of the Merger Agreement, do any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned or delayed), either directly or indirectly: • sell, pledge, dispose of, assign, lease, license, sublicense, dedicate to the public, or otherwise transfer, abandon or permit to lapse, or create or incur any lien on, any of ArQule’s assets (including owned intellectual property), securities, properties, interests or businesses, other than (ia) (except in the case of any intellectual property) sales of obsolete equipment and dispositions of marketable securities to generate cash in the ordinary course of business consistent with past practice or (b) non-exclusive grants of rights to use intellectual property that are incidental to and not material to performance under an applicable agreement entered in the ordinary course of business consistent with past practice, such as a clinical trial agreement or a supply agreement entered into with a supplier; • acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (A) supplies and equipment in the ordinary course of business consistent with past practice, (iiB) capital expenditures as set forth in the Disclosure Letter or (C) as may be required for ArQule to perform or comply with its obligations under applicable Law or the terms of any existing Plan contract to which it is a party or agreementby which it is bound (and do not arise from any failure by ArQule to perform or comply with such contract) and that has been made available to Parent; • merge or consolidate ArQule with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, and dissolution, restructuring, recapitalization or other reorganization of ArQule (iii) other than the granting Merger); • adopt or implement any stockholder rights plan or similar arrangement; • amend, waive, rescind or otherwise modify ArQule’s certificate of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take incorporation or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.bylaws;
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by RTO Pending the -------------------------------------- Merger. From the date of this Agreement to the Effective Time, ------ unless Parent Alrenco shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company RTO Disclosure Letter:
(a) the respective businesses of Company RTO and the Company RTO Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company RTO or any Company RTO Subsidiary;.
(b) Company RTO shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company RTO Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company RTO Subsidiaries;
(c) neither Company RTO nor any of the Company RTO Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 50,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company an RTO Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company RTO Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Sources: Merger Agreement (Alrenco Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 4.01 Conduct of Business by the Company Pending the Merger. From The Company covenants and agrees that, between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, or the business of the Company shall be conducted only in, and the Company shall not take any action except in, the ordinary course of business; and the Company shall use its reasonable efforts to preserve substantially intact the business organization of the Company, to keep available the services of the current officers, employees and consultants of the Company and to preserve the current relationships of the Company with customers, suppliers and other persons with which the Company has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, Agreement or any Exhibit hereto, or by Section 4.01 of the Company Disclosure LetterSchedule, the Company shall not, between the date of this Agreement and the Effective Time, directly or indirectly do, any of the following without the prior written consent of Parent:
(a) the respective businesses amend or otherwise change its Certificate of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company Incorporation or any Company SubsidiaryBylaws;
(b) Company shall not issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any class of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofCompany, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock, its capital stock or any other ownership interest (including, without limitation, any phantom interest), of the Company or (ii) any class (whether through assets of the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)Company, except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than sales in the ordinary course of business business;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock other than a dividend to the shareholders of the Company of the receivables from Honeywell in the aggregate amount of $47,034.88 and consistent with past practices; the receivables from American Axle in the aggregate amount of $359,357.28 (iiithe "Transferred Receivables") incurto be paid prior to the Effective Time, assume which dividend will be made by an assignment of the Transferred Receivables without recourse;
(d) reclassify, combine, split, subdivide or prepay redeem, purchase or otherwise acquire, directly or indirectly, any indebtedness of its capital stock;
(e) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other material liabilities business combination) any corporation, partnership, other than in business organization or any division thereof or substantially all of the ordinary course assets of business and consistent with past practicesa business; (ivii) incur any indebtedness for borrowed money or issue any debt securities or assume, guaranteeguarantee or endorse, endorse pledge in respect of or otherwise as an accommodation become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) person, or make any loansloans or advances, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than except in the ordinary course of business; or (viiiiii) enter into any contract or agreement which require aggregate payments by the Company in an aggregate amount in excess of $5,000 other than contracts or agreements entered into in the ordinary course of business; and (iv) terminate, cancel or request any material change in, or agree to any material change in, any contract which is material to the business of the Company, except in the ordinary course of business, other than contemplated amendments of real estate leases for the real property leased by the Company for its operations, which amendments shall be approved by the Parent prior to execution thereof; (v) authorize any single capital expenditure which is in excess of $1,000 or capital expenditures which are, in the aggregate, in excess of $5,000; or (vi) enter into or amend any contract, agreement, commitment or arrangement with respect to any of the foregoingmatter set forth in this Section 4.01(e);
(df) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in increase the compensation payable or to become payable to any of its officers, directors officers or employees, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company, or establish, adopt, enter into or amend (except as may be required by law) any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, severancetermination, termination severance or other similar plan, agreement, adopt any new Plan trust, fund, policy or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements arrangement for or on behalf the benefit of any of such personsdirector, whether contingent on consummation officer or employee; or reimburse any officer of the Merger or otherwiseCompany for aggregate expenses in excess of $1,000;
(g) take any action, other than (i) reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (iiincluding, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable);
(h) make any tax election; settle or compromise any material federal, state, local or foreign tax liability or change any of its methods of reporting income, deductions or other items for federal state, local or foreign Tax purposes from those employed in the preparation of its most recently filed returns with respect to the applicable Tax, except only as such changes may be required under by intervening changes in applicable Law law or regulations;
(i) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the terms payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the 1999 Company Balance Sheet or subsequently incurred in the ordinary course of business;
(j) form any existing Plan subsidiary; or
(k) announce an intention, enter into any formal or informal agreement, and (iii) the granting of retention bonuses or otherwise make a commitment, to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor do any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing.
Appears in 1 contract
Sources: Merger Agreement (Nematron Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 5.1. From Conduct of Business by the Company Pending the Effective Time. Except as otherwise contemplated by this Agreement, required by Law, disclosed in Schedule 5.1 of the Company Disclosure Letter or consented to by Parent (which consent shall not be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or (i) the Company Disclosure Lettershall conduct its businesses in the ordinary course consistent with past practice and (ii) without limiting the generality of the foregoing, neither the Company nor any of its Subsidiaries will take any of the following actions:
(a) amend their respective articles of incorporation or bylaws (or comparable governing instruments) or the respective businesses of Company and Rights Agreement in any material respect or redeem the Company Subsidiaries shall be conducted only in Rights or otherwise take any action which would render the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in Rights Agreement inapplicable to any Acquisition Proposal other than the conduct of the operations of Company or any Company Subsidiarytransactions contemplated by this Agreement;
(b) authorize for issuance, issue, grant, sell, pledge or dispose of any shares of, or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any shares of, the capital stock or other securities of the Company shall or any of its Subsidiaries including, but not limited to, any securities convertible into or exchangeable for shares of stock of any class of the Company or any of its Subsidiaries, except for (i) sell or pledge or agree to sell or pledge any stock owned by it the issuance of Shares (including the associated Rights) upon the exercise of Company Stock Options outstanding on the date of this Agreement in any of the Company Subsidiaries; accordance with their present terms, and (ii) amend its Certificate of Incorporation or By-Laws; or issuances in accordance with the Rights Agreement except for the Merger;
(iiic) split, combine or reclassify any shares of its outstanding capital stock or declare, pay or set aside or pay any dividend or other distribution payable (whether in cash, stock or propertyproperty or any combination thereof) in respect of its capital stock, other than dividends or distributions by any wholly owned Subsidiary of the Company to the Company or a wholly owned Subsidiary of the Company, or redeem directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any shares of its capital stock or shares of the capital stock of any other securities of the Company or any of its Subsidiaries;,
(cd) neither except for transactions between or among the Company nor and any of the Company Subsidiaries shall its wholly owned Subsidiaries, (i) authorize for issuancecreate, issue incur or sell assume any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets Indebtedness in excess of $5,000,000 10,000,000 in any one the aggregate, except refinancings of existing obligations on terms that are no less favorable to the Company or a series of related transactions its Subsidiaries than the existing terms, (ii) other than endorsements in the ordinary course of business and consistent with past practices; (iii) incurof negotiable instruments for deposit or collection, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, indirectly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary Person in amounts in excess of $10,000,000 in the ordinary course of business and consistent with past practices; aggregate, (viii) make any capital expenditures or make any loans, advances or capital contributions to, or investments in, any other personPerson (other than (w) to the Company or a wholly owned Subsidiary of the Company, (x) customary travel, relocation or business advances to employees, (y) such as are included in the Company's capital budget for 2003, a copy of which has been provided to Parent, and (z) such other items as do not exceed $10,000,000 individually or $50,000,000 in the aggregate), (iv) acquire all or substantially all of the stock or assets of, or merge or consolidate with, any other Person for an amount that exceeds $10,000,000 individually or $50,000,000 in the aggregate, (v) settle any claim, action, litigation, or other judicial or administrative proceeding, directly or indirectly, against the Company or any of its Subsidiaries in amounts in excess of $10,000,000 in the aggregate (excluding any amounts that are covered by insurance policies of the Company or its Subsidiaries, as applicable), or (vi) sell, transfer, mortgage, pledge or otherwise dispose of (or permit any of the foregoing), or encumber, any assets or properties, real, personal or mixed, material to the Company and its Subsidiaries taken as a whole other than to secure debt permitted under subpart (i) of this clause (d);
(e) increase in any manner the compensation of any of the Company's or any of its Subsidiaries' officers or employees, or enter into, establish, amend or terminate any employment, consulting, retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity, pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in respect of, any shareholder, officer, director, or employee of the Company Subsidiaries and or any Subsidiary thereof other than pursuant to the terms of agreements in effect on the date of this Agreement or in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoingpractice;
(df) cancel, amend, modify, terminate, or waive any Company shall use reasonable efforts to preserve intact Material Contract which cancellation, modification, termination, or grant of waiver, individually or in the business organization of Company and the Company Subsidiariesaggregate, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiarieshas a Material Adverse Effect;
(eg) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable Tax elections made by the Company or to become payable to any Subsidiary thereof or in any accounting method used by the Company or any Subsidiary thereof for Tax purposes, where such Tax election or change in accounting method has, individually or in the aggregate, a Material Adverse Effect, for any period or periods, or the settlement or compromise of any material income Tax Liability of the Company and its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, Subsidiaries;
(h) adopt any new Plan shareholder rights or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than similar plans;
(i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification cause the Company Common Stock, at the record date for determining the holders of shares of Company Common Stock who are entitled to receive notice and to vote at the Company Shareholders' Meeting, not to be listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.; or
(j) agree in writing or otherwise to take any of the Merger as a reorganization within the meaning of section 368(aactions described in Sections 5.1 (a) of the Codethrough (i) above.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Quintiles Transnational Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 5.01. From Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement to and the Effective Time, except as set forth in Section 5.01 of the Company Disclosure Schedule or as otherwise expressly provided for in this Agreement, unless Parent shall otherwise agree (which agreement shall not be unreasonably withheld or delayed) in writing, the Company Businesses shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent in all material respects with past practice; and the Company shall use its best efforts to preserve intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, distributors, suppliers, licensors, licensees, contractors and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, or any Exhibit hereto, or as set forth in Section 5.01 of the Company Disclosure LetterSchedule, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company amend or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend otherwise change its Certificate of Incorporation or By-Laws; laws or equivalent organizational documents;
(iiib) splitissue, combine sell, pledge, dispose of, grant or reclassify encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any class of the Company Subsidiaries;
(c) neither Company nor or any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock, its capital stock or any other ownership interest (including, without limitation, any phantom interest), of the Company or any class Subsidiary or (whether through ii) any assets of the issuance Company or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)any Subsidiary, except for (a) unissued Shares reserved sales in the ordinary course of business and in a manner consistent in all material respects with past practice and other asset sales for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and consideration or having a fair market value aggregating not more than $1,000,000;
(c) other than regularly scheduled periodic cash dividends in amounts not in excess of those previously declared, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a United States Subsidiary may, after consultation with Parent, declare and pay a dividend to the Employee SharesCompany;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(e) except as contemplated by the UNC Merger Agreement, (i) acquire (including, without limitation, by merger, consolidation or acquisition of stock or assets) any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets; (ii) acquireenter into any contract or agreement that, dispose ofif entered into prior to the date of this Agreement, transferwould have been required to be disclosed as a Material Contract, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business, consistent in all material respects with past practice; or (iii) enter into or amend any Material Contract with respect to any matter set forth in this subsection (e);
(f) (i) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business and consistent in all material respects with past practicespractice and in an amount not in excess of $250,000; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (viii) authorize capital expenditures substantially which are, in the aggregate, in excess of $1,000,000 for the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary and the Subsidiaries taken as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of businesswhole; or (viiiiii) enter into or amend any contract, agreement, commitment or arrangement with respect to any of the foregoingmatter set forth in this subsection (f);
(dg) Company shall use reasonable efforts to preserve intact increase (except in the ordinary course of business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships consistent in all material respects with it and the Company Subsidiaries;
(epast practice) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to its officers or employees generally or to any employee with an annual salary in excess of its officers$100,000, directors or employeesgrant any bonus, severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, severancetermination, termination severance or other similar plan, agreement, adopt any new Plan trust, fund, policy or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements arrangement for or on behalf the benefit of any director, officer or employee; provided, however, that the Company and the executive officers identified in Exhibit 5.01(g) hereto may enter into agreements in a form substantially identical to, and in the amounts identified on, Exhibit 5.01(g) hereto;
(h) acquire, sell, lease or dispose of such persons, whether contingent on consummation of the Merger any Real Estate or otherwiseother material assets, other than sales or leases of fixed assets (other than Real Estate) or sales of inventory, in each case, in the ordinary course of business;
(i) accelerate the collection of accounts receivable, delay the payment of accounts payable or take any action with respect to credit, collection and fiscal policies and practices, other than in the ordinary course of business and in a manner consistent with past practice with respect to accounting policies or practices;
(j) make any material Tax election or settle or compromise any material federal, state, local or foreign income Tax liability;
(k) take any action that would or is reasonably likely to result in any of the covenants and agreements set forth in this Article V or in Article VI or any of the conditions set forth in Article VII not being satisfied as of the Closing Date;
(l) take any action, other than reasonable and usual actions in the ordinary course of business and consistent in all material respects with past practice, with respect to accounting policies or procedures (ii) as may be required under applicable Law or including, without limitation, procedures with respect to the terms payment of any existing Plan or agreement, accounts payable and (iii) the granting collection of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andaccounts receivable);
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (iim) knowingly take any action that would jeopardize qualification of could reasonably be expected to prevent the Merger as from constituting a reorganization within the meaning of section transaction qualifying under Section 368(a) of the Code; or
(n) except for the payment of reasonable professional fees relating to the Merger, the UNC Merger, or otherwise and reasonable fees to financial advisors (which financial advisory fees have heretofore been disclosed or are otherwise acceptable, to Parent), pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) in an amount in excess of $500,000 in the aggregate, other than the payment, discharge or satisfaction, in the ordinary course of business and consistent in all material respects with past practice, of liabilities reflected or reserved against in the Company 1996 Balance Sheet or subsequently incurred in the ordinary course of business and consistent in all material respects with past practice.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From SSG agrees on its own behalf and on behalf of its subsidiaries that, during the period from the date of this Agreement to and continuing until the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) except as set forth in Schedule 6.1, the respective businesses of Company SSG and the Company Subsidiaries its subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company SSG and its subsidiaries shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiariesits subsidiaries; (ii) amend its Certificate Articles of Incorporation or By-LawsBylaws; or (iii) split, combine combine, or reclassify any shares of its outstanding capital stock or declare, set aside aside, or pay any dividend or other distribution payable in cash, stock or propertystock, or redeem property in respect of its capital stock, or directly or indirectly redeem, purchase, or otherwise acquire any shares of its capital stock or other securities or shares of the capital stock or other securities of any of the Company Subsidiariesits subsidiaries;
(c) neither Company nor any of the Company Subsidiaries SSG and its subsidiaries shall not (i) authorize for issuance, issue issue, sell, pledge, dispose of, encumber, deliver, or sell agree or commit to issue, sell, pledge, or deliver any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class or exchangeable into shares of stock of any class or any Voting Debt (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase purchase, or otherwise), except for (a) unissued that SSG may issue Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares required to be issued pursuant upon exercise of existing stock options, warrants, or similar plans, or under other contractual commitments previously made, which options, warrants, plans, or commitments have been disclosed in writing to VDAT in the Warrant Agreement and (c) the Employee SharesSSG Schedule; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge pledge, or encumber any fixed or other substantial assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume assume, or prepay any indebtedness material indebtedness, liability, or obligation or any other material liabilities or issue any debt securities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse endorse, or otherwise become liable or responsible (whether directly, contingently contingently, or otherwise) for the obligations of any other person (other than a Company Subsidiary subsidiary) in a material amount other than in the ordinary course of business and consistent with past practices; (v) make any material loans, advances advances, or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and subsidiaries, other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any fail to maintain adequate insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of businessconsistent with past practices for their businesses and properties; or (viiivii) enter into any contract, agreement, commitment commitment, or arrangement with respect to any of the foregoing;
(d) Company SSG shall use reasonable efforts to preserve intact the business organization of Company SSG and the Company Subsidiariesits subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and their respective subsidiaries; PROVIDED, HOWEVER, that no breach of this covenant shall be deemed to have occurred if a failure to comply with this SECTION 6.1(d) occurs as a result of any matter arising out of the Company Subsidiariestransactions contemplated by this Agreement;
(e) neither Company nor any of the Company Subsidiaries SSG and its subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken or fail to take any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; act or (ii) knowingly take any action that omission would jeopardize qualification of the Merger as a reorganization "reorganization" within the meaning of section Section 368(a) of the Code; and
(f) SSG and its subsidiaries shall use all reasonable efforts to prevent any representation or warranty of SSG herein from becoming untrue or incorrect in any material respect.
Appears in 1 contract
Sources: Merger Agreement (Visual Data Corp)
Conduct of Business Pending the Merger. (a) Except as expressly permitted by clauses (i) through (xvii) of this Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From 4.1, during the period from the date of this Agreement to through the Effective Time, unless Parent the Company shall, and shall otherwise agree cause each of its Subsidiaries to, in writingall material respects carry on its business in the ordinary course of its business as currently conducted and, or to the extent consistent therewith, use commercially reasonable efforts to preserve intact its current business organizations, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practicesnot, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not permit any of its Subsidiaries to, without the prior written consent of Parent: (i) sell (A) declare, set aside or pledge pay any dividends on, or agree to sell make any other actual, constructive or pledge any stock owned by it deemed distributions in respect of, any of its capital stock, or otherwise make any payments to its stockholders in their capacity as such (other than dividends by the Company Subsidiaries; Company's Subsidiaries to the Company), (ii) amend its Certificate of Incorporation or By-Laws; or (iiiB) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock or declare(C) purchase, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor or any of the Company Subsidiaries shall (i) authorize for issuanceother securities thereof or any rights, issue warrants or sell any additional shares of, or rights of any kind options to acquire any such shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Sharesother securities; (ii) acquireissue, deliver, sell, pledge, dispose ofof or otherwise encumber any shares of its capital stock, any other equity interests or equity equivalent or any securities convertible into, or any rights, warrants or options to acquire any such shares, equity interests, equity equivalent or convertible securities, other than the issuance of shares of Company Common Stock pursuant to the Company Stock Options outstanding as of the date of this Agreement, in each case, in accordance with its current terms; (iii) amend the Company Charter or Company Bylaws or other comparable charter or organizational documents of any of its Subsidiaries; (iv) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, limited liability company, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets, other than assets acquired in the ordinary course of business consistent with past practice and not material to the Company and its Subsidiaries taken as a whole; (v) sell, transfer, lease, license, mortgage, pledge pledge, encumber or encumber otherwise dispose of any fixed of its properties or other assets in excess of $5,000,000 in any one or a series of related transactions assets, other than sales, leases or licenses of products or services in the ordinary course of business and consistent with past practicespractice and other than sales, leases or licenses of products or services involving less than $50,000 in the aggregate; (iiivi) incur, assume or prepay incur any indebtedness for borrowed money, guarantee any such indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or other investments in, any other personPerson, other than to (A) indebtedness for borrowed money under its Credit Agreement, dated as of March 24, 1998, between the Company and certain of its Subsidiaries and other than First Union National Bank, as amended, provided that the aggregate principal amount outstanding at any time under such agreement would not exceed $15.9 million, (B) indebtedness, guarantees, loans, advances, capital contributions and investments between the Company and any of its wholly-owned Subsidiaries or between any of such wholly-owned Subsidiaries, (C) cash management activities carried on in the ordinary course of business and consistent with past practice, and (D) advances to employees for travel and related business expenses consistent with Company policies and past practices; (vivii) authorize capital expenditures substantially alter (through merger, liquidation, reorganization, restructuring or in excess any other fashion) the corporate structure or ownership of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Subsidiary; (viii) enter into, adopt or amend any severance plan, agreement or arrangement, Company Subsidiary Plan or employment or consulting agreement, including, without limitation, the Company Stock Options; (ix) except as a beneficiary set forth in
Section 4.1 (a)(ix) of the Company Letter, increase the compensation or a loss payee benefits payable or to be cancelled become payable to its directors, officers or terminated employees or grant any severance or termination pay to, or enter into or amend any employment or severance agreement with, any current or former director or officer of the Company or any of its Subsidiaries, except, in case of employees other than directors or officers, in the ordinary course of businessbusiness consistent with the Company's past practice in connection with annual compensation reviews but in no event to exceed a 5% increase in the aggregate, or establish, adopt, enter into, or, except as may be required to comply with applicable law, amend or take action to enhance or accelerate any rights or benefits under, any labor, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement, including the Company Stock Plan, for the benefit of any current or former director, officer or employee; (x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it or any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance; (xi) make any change to accounting policies or procedures (other than actions required to be taken by GAAP); (xii) except as set forth in Section 4.1(a)(xii) of the Company Letter, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods; (xiii) settle or compromise any material federal, state, local or foreign income Tax liability; (xiv) enter into, amend, waive any rights under or terminate (a) any agreement or contract material to the Company and its Subsidiaries, taken as a whole, (b) any Member Agreement, (c) any noncompetition agreement, or (d) any agreement pursuant to which any third party is granted marketing, distribution, manufacturing or any other related rights with respect to any Company product, services, processes or technology; or, except as set forth in Section 4.1(a)(xiv) of the Company Letter, incur, make or agree to make any new capital expenditure or expenditures which, individually, is in excess of $50,000 or, in the aggregate, are in excess of $200,000; (xv) waive or release any material right or claim, or pay, discharge or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in the Balance Sheet or incurred in the ordinary course of business consistent with past practice; (xvi) initiate, settle or compromise any litigation or arbitration proceeding; (xvii) permit any director of the Company to hold any shares of Company Common Stock or, other than the Company Stock Options owned by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as of the date hereof, permit any director of the Company to be granted or to hold any Company Stock Options; or (viiixviii) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement with respect to do any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Sources: Merger Agreement (Concord Efs Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. From the date of this Agreement to hereof until the Effective Time, unless Parent American General Corporation shall otherwise agree in writing, or except as set forth in the Company Disclosure Letter or as otherwise contemplated by this Agreement, or any Exhibit heretothe Company and the Company Subsidiaries shall conduct their respective businesses in the ordinary course consistent with past practice and shall use all reasonable efforts to preserve intact their business organizations and relationships with third parties (including but not limited to their respective relationships with policyholders, or insureds, agents, underwriters, brokers and investment customers) and to keep available the services of their present officers and key employees, subject to the terms of this Agreement. Except as set forth in the Company Disclosure LetterLetter or as otherwise provided in this Agreement, from the date hereof until the Effective Time, without the prior written consent of American General Corporation:
(a) the respective businesses Company shall not adopt or propose any change in its Restated Certificate of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company Incorporation or any Company SubsidiaryBylaws;
(b) the Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution with respect to any shares of capital stock of the Company (except for regular quarterly dividends payable in cashan amount no greater than $.25 per share on the Company Common Stock, stock or property$1.125 per share on the Series A Preferred Stock, and $1.25 per share on the Series B Preferred Stock), or split, combine or reclassify any of the Company's capital stock, and the Company and the Company Subsidiaries shall not repurchase, redeem or otherwise acquire any shares of its capital stock or shares of other securities of, or other ownership interests in, the capital stock of any of the Company SubsidiariesCompany;
(c) neither Company nor any of subject to Section 7.3, the Company Subsidiaries shall not, and shall not permit any Company Subsidiary to, merge or consolidate with any other person or (except in the ordinary course of business) acquire a material amount of assets of any other person;
(d) the Company shall not, and shall not permit any Company Subsidiary to, sell, lease, license or otherwise surrender, relinquish or dispose of (i) authorize for issuance, issue any material facility owned or sell leased by the Company or any additional shares of, Company Subsidiary or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquireany assets or property which are material to the Company and the Company Subsidiaries, dispose oftaken as a whole, transferexcept pursuant to existing contracts or commitments (the material terms of which have been disclosed to American General Corporation prior to the date hereof), lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; practice;
(iiie) incurthe Company shall not, assume and shall not permit any Company Subsidiary to, settle any material audit, make or prepay change any indebtedness material Tax election or file any other material liabilities amendment to any material Tax Return;
(f) except as set forth in a certificate of the President of the Company previously delivered to American General Corporation, the Company and the Company Subsidiaries shall not issue any capital stock (other than pursuant to the Company Stock Incentives, and upon the conversion of Company Preferred Stock) or other securities or enter into any amendment of any material term of any outstanding security of the Company, and the Company and the Company Subsidiaries shall not incur any material indebtedness except in the ordinary course of business and consistent with past practices; (iv) assumepursuant to existing credit facilities or arrangements, guarantee, endorse amend or otherwise increase, accelerate the payment or vesting of the amounts payable or to become liable payable under or responsible fail to make any required contribution to, any Company Plan (whether directlyas hereinafter defined) or materially increase any non-salary benefits payable to any employee or former employee, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary except in the ordinary course of business and consistent with past practices; practice or as otherwise permitted by this Agreement;
(vg) make except as set forth in a certificate of the President of the Company previously delivered to American General Corporation, the Company shall not, and shall not permit any loans, advances or capital contributions Company Subsidiary to, or investments in, (i) grant any other person, other than to Company Subsidiaries and other than increase in the ordinary course of business and consistent with past practices; compensation or benefits (vi) authorize capital expenditures substantially in excess including, but not limited to, salary, bonus, stock option, restricted stock awards, annual incentive plan or book unit plan of the amount currently budgeted therefor; (viiCompany) permit any insurance policy naming of directors, officers, employees, consultants or agents of the Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; Subsidiary, or (viiiii) enter into or amend any contract, agreement, commitment employment agreement or other employment arrangement with respect any employee of the Company or any Company Subsidiary;
(h) the Company shall not change any method of accounting or accounting practice by the Company or any Company Subsidiary, except for any such required change in GAAP or applicable Statutory Accounting Principles;
(i) the Company shall not, and shall not permit any Company Subsidiary to, take any action that would reasonably be expected to cause the Merger to fail to qualify as a reorganization within the meaning of Section 368(a) of the Code;
(j) the Company shall not, and shall not permit any Company Subsidiary to, take any action that could, directly or indirectly, reasonably be expected to cause the Merger to fail to qualify for pooling-of-interest accounting treatment;
(k) the Company shall not permit any Company Insurance Subsidiary to conduct transactions in Company Investments except in compliance with the investment policies of such Company Insurance Subsidiary in effect on the date hereof and all applicable insurance laws and regulations;
(l) the Company shall not, and shall not permit any Company Subsidiary to, enter into any agreement to purchase, or to lease for a term in excess of one year, any real property (other than real property constituting a Company Investment), provided that the Company, or any Company Subsidiary, (i) may as a tenant, or a landlord, renew any existing lease for a term not to exceed eighteen months and (ii) nothing herein shall prevent the Company, in its capacity as a landlord, from renewing any lease pursuant to an option granted prior to the date hereof;
(m) the Company shall not, and shall not permit any Company Subsidiary to, agree or commit to do any of the foregoing;
(dn) except to the extent necessary to comply with the requirements of applicable laws and regulations, the Company shall not, and shall not permit any Company Subsidiary to, (i) take, or agree or commit to take, any action that would make any representation and warranty of the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Effective Time, (ii) omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time, provided however, that the Company shall be permitted to take or omit to take such action which (without any uncertainty) can be cured, and in fact is cured, at or prior to the Effective Time or (iii) take, or agree or commit to take, any action that would result in, or is reasonably likely to result in, any of the conditions of the Merger set forth in Article VIII not being satisfied; and
(o) none of the Company Insurance Subsidiaries shall make any material change in its underwriting, claims management or reserving practices.
Section 6.2 Conduct of Business by American General Corporation Pending the Merger. From the date hereof until the Effective Time, unless the Company shall otherwise agree in writing, or except as set forth in the American General Corporation Disclosure Letter or as otherwise contemplated by this Agreement, American General Corporation and American General Corporation Subsidiaries shall conduct their respective businesses in the ordinary course consistent with past practice and shall use all reasonable efforts to preserve intact the their business organization of Company organizations and the Company Subsidiariesrelationships with third parties (including but not limited to their respective relationships with policyholders, insureds, agents, underwriters, brokers and investment customers) and to keep available the services of its and their present officers and key employees, and subject to preserve the goodwill terms of those having business relationships with it and this Agreement. Except as set forth in the Company SubsidiariesAmerican General Corporation Disclosure Letter or as otherwise provided in this Agreement, from the date hereof until the Effective Time, without the prior written consent of the Company:
(a) American General Corporation shall not adopt or propose any change in its Restated Articles of Incorporation or Bylaws;
(eb) neither Company nor American General Corporation shall not declare, set aside or pay any dividend or other distribution with respect to any shares of capital stock of the Company Subsidiaries (except for regular quarterly dividends payable in an amount no greater than $.35 per quarter per share of American General Corporation Common Stock, and $.6453 per quarter per share of American General Corporation 7% Convertible Preferred Stock), or split, combine or reclassify any of American General Corporation's capital stock;
(c) American General Corporation shall make not, and shall not permit any change American General Corporation Subsidiary to, merge or consolidate with any other person or (except in the compensation payable or to become payable to any ordinary course of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any business) acquire a material respect any existing Plan, or make any loans to any amount of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf assets of any other person;
(d) American General Corporation shall not, and shall not permit any American General Corporation Subsidiary to, sell, lease, license or otherwise surrender, relinquish or dispose of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) any material facility owned or leased by American General Corporation or any American General Corporation Subsidiary or (ii) any assets or property which are material to American General Corporation and the American General Corporation Subsidiaries, taken as a whole, except pursuant to existing contracts or commitments (the material terms of which have been disclosed to the Company prior to the date hereof), or in the ordinary course of business and consistent with past practice, ;
(iie) as may be required under applicable Law or the terms of any existing Plan or agreementAmerican General Corporation shall not, and (iii) the granting of retention bonuses shall not permit any American General Corporation Subsidiary to, settle any material audit, make or change any material Tax election or file any material amendment to certain officers and employees in an aggregate amount not to exceed $2,000,000; andany material Tax Return;
(f) neither Company nor American General Corporation and the American General Corporation Subsidiaries shall not issue any capital stock (other than pursuant to the exercise of American General Corporation Stock Options or upon conversion of shares of American General Corporation 7% Convertible Preferred Stock) or other securities or enter into any amendment of any material term of any outstanding security of American General Corporation, and American General Corporation and the American General Corporation Subsidiaries shall not incur any material indebtedness except in the ordinary course of business pursuant to existing credit facilities or arrangements, amend or otherwise increase, accelerate the payment or vesting of the Company Subsidiaries amounts payable or to become payable under or fail to make any required contribution to, any American General Corporation Plan (as hereinafter defined) or materially increase any non-salary benefits payable to any employee or former employee, except in the ordinary course of business consistent with past practice or as otherwise permitted by this Agreement;
(g) American General Corporation shall not, and shall not permit any American General Corporation Subsidiary to, (i) knowingly take grant any increase in the compensation or allow to be taken benefits of directors, officers, employees, consultants or agents of American General Corporation or any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; American General Corporation Subsidiary, or (ii) knowingly enter into or amend any employment agreement or other employment arrangement with any employee of American General Corporation or any American General Corporation Subsidiary;
(h) American General Corporation shall not change any method of accounting or accounting practice by American General Corporation or any American General Corporation Subsidiary, except for any such required change in GAAP or applicable Statutory Accounting Principles;
(i) American General Corporation shall not, and shall not permit any American General Corporation Subsidiary to, take any action that would jeopardize qualification of reasonably be expected to cause the Merger to fail to qualify as a reorganization within the meaning of section Section 368(a) of the Code;
(j) American General Corporation shall not, and shall not permit any American General Corporation Subsidiary to, take any action that could, directly or indirectly, cause the Merger to fail to qualify for pooling-of-interests accounting treatment;
(k) American General Corporation shall not permit any American General Corporation Insurance Subsidiary to conduct transactions in American General Corporation Investments except in compliance with the investment policies of such American General Corporation Insurance Subsidiary in effect on the date hereof and all applicable insurance laws and regulations;
(l) American General Corporation shall not, and shall not permit any American General Corporation Subsidiary to, enter into any agreement to purchase, or to lease for a term in excess of one year, any real property (other than real property constituting a American General Corporation Investment), provided that American General Corporation or any American General Corporation Subsidiary, (i) may as a tenant, or a landlord, renew any existing lease for a term not to exceed eighteen months and (ii) nothing herein shall prevent American General Corporation in its capacity as a landlord, from renewing any lease pursuant to an option granted prior to the date hereof;
(m) American General Corporation shall not, and shall not permit any American General Corporation Subsidiary to, agree or commit to do any of the foregoing;
(n) except to the extent necessary to comply with the requirements of applicable laws and regulations, American General Corporation shall not, and shall not permit any American General Corporation Subsidiary to, (i) take, or agree or commit to take, any action that would make any representation and warranty of American General Corporation hereunder inaccurate in any material respect at, or as of any time prior to, the Effective Time, (ii) omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time, provided however, that American General Corporation shall be permitted to take or omit to take such action which (without any uncertainty) can be cured, and in fact is cured, at or prior to the Effective Time or (iii) take, or agree or commit to take, any action that would result in, or is reasonably likely to result in, any of the conditions of the Merger set forth in Article VIII not being satisfied; and
(o) none of the American General Corporation Insurance Subsidiaries shall make any material change in its underwriting, claims management or reserving practices.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER4.1 Conduct of Business by Standard and the Standard Subsidiaries. From the date of this Agreement to the Effective TimeDate, unless Parent TCF shall otherwise agree in writing, writing or as otherwise expressly contemplated or permitted by other provisions of this Agreement, or any Exhibit heretoincluding but not limited to, or the Company Disclosure Letterthis Section 4.1:
(a) the respective businesses business of Company Standard and the Company Standard Subsidiaries shall be conducted only in in, and neither Standard nor any Standard Subsidiary shall take any action except in, the ordinary course, on an arms- length basis and usual course of business in accordance, in all material respects, with all applicable laws, rules and consistent regulations and with past prudent banking practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company neither Standard nor any Standard Subsidiary shall not directly or indirectly:
(i) sell amend or pledge propose to amend its Charter or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; Bylaws;
(ii) amend issue or sell any of its Certificate equity securities, securities convertible into or exchangeable for its equity securities, warrants, options or other rights to acquire its equity securities, or any bonds or other securities, except (A) in the case of Incorporation or By-Laws; or Bank, deposits and other bank obligations in the ordinary course of business and (B) pursuant to the exercise of the options set forth on Schedule 3.3 on the date of this Agreement;
(iii) redeem, purchase, acquire or offer to acquire, directly or indirectly, any shares of capital stock of Standard or any Standard Subsidiary or other securities of Standard, or any Standard Subsidiary, except pursuant to the agreements, arrangements or commitments identified on Schedule 3.3;
(iv) split, combine or reclassify any outstanding shares of its outstanding capital stock of Standard or any Standard Subsidiary, or declare, set aside or pay any dividend or other distribution payable in cash, stock or propertystock, or redeem property or otherwise acquire any with respect to shares of its capital stock or shares of the capital stock of Standard or any Standard Subsidiary except (A) regular quarterly cash dividends of the Company Subsidiariesnot more than $.10 per share payable to holders of Standard Common Stock or (B) dividends paid in cash by any Standard Subsidiary to Standard or another Standard Subsidiary;
(cv) neither Company nor borrow any of the Company Subsidiaries shall (i) authorize for issuance, issue amount or sell incur or become subject to any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)material liability, except for borrowings and liabilities incurred in the ordinary course of business, but in no event will Standard or any Standard Subsidiary enter into any borrowings with a term of greater than one (a1) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, year or any other borrowings (bother than intercompany or Federal Home Loan Bank borrowings) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions 250,000 without prior consultation with TCF, other than as set forth on Schedule 4.1(b);
(vi) discharge or satisfy any material lien or encumbrance on the properties or assets of Standard or any Standard Subsidiary or pay any material liability, except (A) in the ordinary course of business and consistent (B) in the case of Bank and Standard Subsidiaries, reverse repurchase agreements for Federal Home Loan Bank borrowings;
(vii) sell, assign, transfer, mortgage, pledge or subject to any lien or other encumbrance any of its assets with past practicesan aggregate market value in excess of $250,000, except (A) in the ordinary course of business, including REO; (iiiB) incurliens and encumbrances for current property taxes not yet due and payable or being contested in good faith and (C) liens and encumbrances which do not materially affect the value of, assume or prepay materially interfere with the current use or ability to convey, the property subject thereto or affected thereby;
(viii) cancel any indebtedness material debt or claims or waive any other rights of material liabilities other than value, except in the ordinary course of business and consistent with past practices; or upon payment in full;
(ivix) assumeacquire (by merger, guaranteeexchange, endorse consolidation, acquisition of stock or otherwise become liable or responsible (whether directly, contingently assets or otherwise) any corporation, partnership, joint venture or other business organization or division or material assets thereof, or assets or deposits that are material to Standard on a consolidated basis, except in exchange for the obligations of any other person debt previously contracted, including REO;
(x) other than a Company Subsidiary in as set forth on Schedule 3.10 on the ordinary course date of business and consistent with past practices; (v) this Agreement, make any loans, advances single or group of related capital contributions to, expenditures or investments in, any other person, commitments therefor in excess of $250,000 (other than pursuant to Company Subsidiaries binding commitments existing on the date hereof and other than expenditures necessary to maintain assets in good repair) or enter into any lease or group of leases as lessee with the same party which involves aggregate lease payments payable of more than $250,000 for any individual lease or involves more than $250,000 for any group of leases with the same party in the ordinary course of business and consistent aggregate;
(xi) enter into or propose to enter into, or modify or propose to modify, any agreement, arrangement, or understanding with past practices; (vi) authorize capital expenditures substantially in excess respect to any of the amount currently budgeted therefor; (viimatters set forth in this Section 4.1(b) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than except in the ordinary course of business;
(xii) without prior consultation with TCF, purchase or otherwise acquire any investments, direct or indirect, in any derivative securities other than occasional overnight investments of excess cash; or or
(viiixiii) without prior consultation with TCF, enter into any contractinterest rate swap, agreement, commitment floors and option agreements or arrangement with respect to any of the foregoingother similar interest rate management agreements;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(ec) neither Company Standard nor any of the Company Subsidiaries Standard Subsidiary shall make any change in the compensation payable directly or to become payable to any of its officersindirectly enter into, directors modify or employees, enter into or amend terminate any employment, severance, termination severance or other similar agreement, adopt any new Plan agreements or amend in any material respect any existing Planarrangements with, or make grant any loans to bonuses, wage, salary or compensation increases, or severance or termination pay to, or promote, any director, officer, employee, group of its officers, directors or employees or make consultant or hire any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, employee with an annual salary over $100,000 other than (i) in the ordinary course of business and in a manner consistent with past practice, practices or (ii) as may be required under applicable Law or the terms contemplated by this Agreement, and shall promptly notify TCF of any existing Plan termination or agreementresignation of any officer or key employee;
(d) neither Standard nor any Standard Subsidiary shall adopt or amend any profit sharing, stock option, pension, retirement, deferred compensation, or other employee benefit plan, trust, fund, contract or arrangement for the benefit or welfare of any employees, except as required by law or to consummate any of the transactions contemplated hereby in accordance with applicable law, provided that any such arrangement or amendment is approved by TCF which approval shall not be unreasonably withheld by TCF;
(e) each of Standard and (iii) the granting of retention bonuses Standard Subsidiaries shall use reasonable efforts to certain officers and employees in an aggregate amount cause its current insurance policies not to exceed $2,000,000; andbe canceled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies providing coverage substantially equal to the coverage under the canceled, terminated or lapsed policies are in full force and effect;
(f) neither Company Standard nor any Standard Subsidiary shall enter into any settlement or similar agreement with respect to, or take any other significant action with respect to the conduct of, any action, suit, proceeding, order or investigation which is required to be set forth on Schedule 3.14 or to which Standard or any Standard Subsidiary becomes a party after the date of this Agreement which is required to be disclosed in an updated Schedule 3.14, without prior consultation with TCF's General Counsel;
(g) each of Standard and the Standard Subsidiaries shall use commercially reasonable efforts to preserve intact in all material respects the business organization and the goodwill of Standard and the Standard Subsidiaries and to keep available the services of its officers and employees as a group and preserve intact material agreements, and Standard shall establish a committee of senior management personnel which will confer on a regular and frequent basis with a committee of senior management personnel of TCF, as reasonably requested by TCF, to report on operational matters and the general status of ongoing operations and to plan for the operations of the Company Subsidiaries Resulting Institution upon consummation of the Merger;
(h) neither Standard nor any Standard Subsidiary shall (i) knowingly take any significant action with respect to investment securities held or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; controlled by them inconsistent with past practices or (ii) knowingly then current prudent practices, materially alter its investment portfolio duration policy or, without prior consultation with TCF, voluntarily take any action that would jeopardize qualification will have or can reasonably be expected to have a material adverse effect on Bank's asset/liability position;
(i) without prior consultation with TCF, Standard and the Standard Subsidiaries shall not make any agreements or commitments binding it to extend credit to any person in an amount in excess of $500,000;
(j) with respect to real properties leased by Standard and any material personal property leased or licensed by Standard or any Standard Subsidiary for its use, neither Standard nor any Standard Subsidiary shall fail to renew, exercise an option to extend, cancel or surrender any such lease or license nor allow any such lease or license to lapse without prior consultation with TCF; and
(k) neither Standard nor any Standard Subsidiary shall agree to any action prohibited by any of the Merger foregoing; provided, however, that in the event Standard would be prohibited from taking any action by reason of this Section 4.1 without the prior written consent of TCF, such action may nevertheless be taken if Standard is expressly required to do so by law or by the OTS and Standard, as the case may be, promptly informs TCF of such action. For purposes of this Agreement, the words "prior consultation" with respect to any action means advance notice of such proposed action and a reorganization within the meaning of section 368(a) of the Codereasonable opportunity to discuss such action in good faith prior to taking such action.
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Standard Financial Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1. From Conduct of Business by the Company Pending the Merger. Except as contemplated by this Agreement, neither the Company nor any Subsidiary shall, between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or Time do any Exhibit hereto, or of the Company Disclosure Letterfollowing without the prior written consent of Parent:
(a) the respective businesses amend or otherwise change its Certificate of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company Incorporation or any Company SubsidiaryBy- laws or equivalent organizational documents;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify issue any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any class of the Company Subsidiaries;
(c) neither Company nor or any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of, its of such capital stock of the Company or any class Subsidiary (whether through except for the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued issuable pursuant to employee stock options outstanding on the Warrant Agreement date hereof and except in connection with the establishment of new wholly owned subsidiaries for new locations by the Company);
(c) the Employee Shares; (ii) acquiresell, dispose of, transfer, lease, license, mortgage, pledge transfer or encumber in any fixed material respect any assets of the Company or other assets any Subsidiary for consideration in excess of $5,000,000 1,000,000 in any one the aggregate except for transactions relating to the establishment of new locations or a series modifications or improvements to its existing locations by the Company in the ordinary course of related its business, and except for other transactions other than in the ordinary course of business and consistent with past practicespractice provided, however, that the Company shall not sell, transfer or encumber any assets for consideration which, in the opinion of the board, is less than fair value;
(d) declare or pay any dividend or other distribution with respect to any of its capital stock;
(e) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire any of its capital stock;
(i) acquire any corporation, partnership, other business organization or any division thereof, except for the establishment of new wholly owned subsidiaries for new locations by the Company; (iiiii) incurexcept for borrowings under existing credit facilities, assume or prepay incur any indebtedness for borrowed money or issue any debt securities, guarantee any indebtedness for borrowed money or debt securities of another person, issue or sell any warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any "keep well" or other material liabilities other than agreement to maintain any financial statement condition of another person (except a Subsidiary) or enter into any arrangement having the economic effect of any of the foregoing, except in the ordinary course of business and consistent with past practices; (iv) assumepractice, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company Subsidiaries or any Subsidiary; (iii) authorize capital expenditures which are, in the aggregate, in excess of $500,000 for the Company and the Subsidiaries, except for capital expenditures relating to the establishment of new locations by the Company in the ordinary course of its business, and other capital expenditures in the ordinary course of business consistent with past practice; or (iv) enter into any agreement with respect to any matter set forth in this Section;
(g) except as provided in Section 2.8, increase the compensation payable or to become payable to its current and former officers, directors or employees, except for increases in compensation (including bonuses) of employees of the Company or any Subsidiary of the Company in accordance with past practices, or, other than in accordance with past practices and policies, grant any severance or termination pay to, or enter into any employment or severance agreement with, any current or former director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into or materially amend any collective bargaining agreement or benefit plans;
(h) other than as required by generally accepted accounting principles, make any material change to its accounting policies or procedures;
(i) make any material elections or changes in elections for Tax purposes except in accordance with past practice;
(j) pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except for the payment, discharge or satisfaction (x) of liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with their terms as in effect on the date hereof or (y) of claims settled or compromised to the extent permitted by Section 5.1(k), or waive, release, grant, or transfer any rights of material value or modify or change in any material respect any existing license, lease, contract or other document, other than in the ordinary course of business and consistent with past practices; practice;
(vik) authorize capital expenditures substantially settle or compromise any litigation (whether or not commenced prior to the date of this Agreement) other than settlements or compromises of litigation (i) where the amount paid in excess settlement or compromise does not exceed $100,000 and (ii) potential settlements or compromises which are described in the Company Disclosure Schedule;
(l) establish any new lines of credit or other credit facilities or replace any existing credit facilities;
(m) take any action which would make any representation or warranty of the amount currently budgeted therefor; Company in this Agreement subject to a material qualifier untrue or incorrect and any representation or warranty of the Company in this Agreement that is not so qualified untrue or incorrect in any material respect;
(viin) permit adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (subject to the Company's right to take action specifically permitted by Section 6.5(b));
(o) enter into any insurance policy naming Company new collective bargaining agreement or any successor collective bargaining agreement to any collective bargaining agreement disclosed in the Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than Disclosure Schedule except in the ordinary course of business; or ;
(viiip) enter into agree to any contract, agreement, commitment or arrangement with respect modifications to any of the foregoingLTAC Leases, or waive any rights under the LTAC Leases, in any respect which would materially and adversely affect the rights of the Company thereunder;
(dq) Company shall use reasonable efforts take any action to preserve intact exempt under or make not subject to (x) Section 203 of Delaware Law or (y) any other Takeover Statute or state law that purports to limit or restrict business combinations or the business organization of Company and the Company Subsidiariesability to acquire or vote shares, to keep available the services of its any person or entity (other than Parent, Purchaser and their present officers affiliates) or any action taken thereby, which person, entity or action would have otherwise been subject to the restrictive provisions thereof and key employees, and not exempt therefrom except to preserve the goodwill of those having business relationships with it and the Company Subsidiariesextent specifically permitted pursuant to Section 6.5(b);
(er) neither Company nor authorize any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Planof, or make commit or agree to take any loans to any of its officersof, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000foregoing actions; andor
(fs) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize result in the treatment of Parentconditions to the Offer or the merger not being satisfied, subject to the Company's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly right to take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codesuch actions specifically permitted by Section 6.5(b).
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER9.1 Conduct of Business by BankFirst Pending the Merger. From the date of this Agreement Prior to the Effective TimeDate, unless Parent shall otherwise agree in writing, or as is otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(ai) the The respective businesses of Company BankFirst and the Company Subsidiaries its subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practicescourse, and there shall be no material changes in the conduct of the operations of Company or any Company SubsidiaryBankFirst's operations;
(bii) Company BankFirst shall not (iA) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiariesits subsidiaries; (iiB) amend its Certificate Amended and Restated Charter of Incorporation or By-LawsBylaws; or (iiiC) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property;
(iii) Neither BankFirst nor any of its subsidiaries shall (A) issue or agree to issue any additional shares of, or redeem or otherwise rights of any kind to acquire any shares of of, its capital stock or shares of the capital stock of any class; (B) acquire or dispose of any fixed assets or acquire or dispose of any other substantial assets other than in the ordinary course of business; (C) incur a material amount of additional indebtedness, any other material liabilities or enter into any other material transaction other than in the ordinary course of business; (D) enter into any contract, agreement, commitment or arrangement with respect to any of the Company Subsidiariesforegoing;
(civ) neither Company BankFirst shall use its best efforts to preserve intact the business organization of BankFirst and its subsidiaries, to keep available the services of it with its present officers and key employees, and to preserve the good will of those having business relationships with it and its subsidiaries;
(v) Neither BankFirst nor its subsidiaries will enter into any new employment agreements with any of their respective officers or employees or grant any increases in the compensation of their respective officers and employees other than increases in the ordinary course of business and consistent with past practice.
Section 9.2 Conduct of Business by First National Pending the Merger. Prior to the Effective Date, unless Parent shall otherwise agree or is otherwise contemplated by this Agreement:
(i) The respective businesses of First National and its subsidiaries shall be conducted only in the ordinary course, and there shall be no material changes in the conduct of First National's operations;
(ii) First National shall not (A) sell or pledge or agree to sell or pledge any stock owned by it in any of its subsidiaries; (B) amend its Amended and Restated Charter of Incorporation or Bylaws; or (C) split, combine or reclassify its outstanding capital stock or declare, set aside or pay any dividend payable in cash, stock or property;
(iii) Neither First National nor any of the Company Subsidiaries its subsidiaries shall (iA) authorize for issuance, issue or sell agree to issue any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance B) acquire or granting dispose of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed assets or other assets in excess of $5,000,000 in any one acquire or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations dispose of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated substantial assets other than in the ordinary course of business; (C) incur a material amount of additional indebtedness, any other material liabilities or enter into any other material transaction other than in the ordinary course of business; (viiiD) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(div) Company First National shall use reasonable its best efforts to preserve intact the business organization of Company First National and the Company Subsidiariesits subsidiaries, to keep available the services of it with its and their present officers and key employees, and to preserve the goodwill good will of those having business relationships with it and the Company Subsidiariesits subsidiaries;
(ev) neither Company Neither First National nor its subsidiaries will enter into any new employment agreements with any of the Company Subsidiaries shall make their respective officers or employees or grant any change increases in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or their respective officers and employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) increases in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Sources: Merger Agreement (Bankfirst Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1 Conduct of Business by Avalon Pending the Merger. From the date of this Agreement Avalon covenants and agrees that, prior to the Effective Time, unless Parent NCCI shall otherwise agree in writing, writing or as otherwise expressly contemplated or permitted by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) Avalon shall conduct its business and operations, including its cash management practices, the respective businesses collection of Company receivables, maintenance of facilities and the Company Subsidiaries shall be conducted payment of payables, only in the usual and ordinary and usual course of business and consistent with past practices, custom and there shall be no practice in all material changes in the conduct of the operations of Company or any Company Subsidiaryrespects;
(b) Company Avalon shall not directly or indirectly do any of the following: (i) sell sell, pledge, dispose of or pledge or agree to sell or pledge encumber any stock owned by it material portion of its assets, except in any the ordinary course of the Company Subsidiariesbusiness; (ii) amend or propose to amend its Certificate of Incorporation charter or By-Lawsbylaws; or (iii) split, combine or reclassify any outstanding shares of its outstanding capital stock stock, or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;or
(c) neither Company nor any of the Company Subsidiaries Avalon shall not (i) authorize for issuanceissue, issue sell, pledge or sell dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants, conversion privileges or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Sharescapital; (ii) acquireacquire (by merger, dispose ofconsolidation, transferacquisition of stock or assets or otherwise) any corporation, lease, license, mortgage, pledge or encumber any fixed partnership or other business organization or division or material assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practicesthereof; (iii) incurincur any material indebtedness for borrowed money, assume issue any debt securities or prepay guarantee any indebtedness to others; or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into or modify any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company Avalon shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
not (ei) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend modify any employment, severance, termination severance or other similar agreement, adopt any new Plan agreements or amend in any material respect any existing Planarrangements with, or make grant any loans to bonus, salary increase, severance or termination pay to, any officers or directors; or (ii) in the case of its officersemployees who are not officers or directors, directors or employees or make take any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, action other than (i) in the ordinary course of business and consistent in all material respects with past practice, practice (iinone of which shall be unreasonable or unusual) as may be required under applicable Law or with respect to the terms grant of any existing Plan bonuses, salary increases, severance or termination pay or with respect to any increase of benefits payable in effect on January 1, 1996;
(e) Avalon shall not adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, and (iii) trust, fund or arrangement for the granting benefit or welfare of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andany employee;
(f) neither Company nor except as otherwise required by its charter or bylaws, by this Agreement or by applicable law, Avalon shall not call any meeting of its shareholders and, with respect to any meeting of its shareholders called by Avalon, Avalon shall provide to NCCI copies of all written materials and other information given to the shareholders prior to the time such materials and information are given to the shareholders;
(g) Avalon shall use commercially reasonable efforts to cause its current insurance (or reinsurance) policies not to be cancelled or terminated or any of the Company Subsidiaries coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect;
(h) Avalon shall (i) knowingly use commercially reasonable efforts to preserve intact its business organization and goodwill, keep in full force and effect all material rights, licenses, permits and franchises relating to its business, keep available the services of its officers and employees as a group and maintain satisfactory relationships with suppliers, distributors, customers and others having business relationships with it; (ii) report on a regular and frequent basis, at reasonable times, to representatives of NCCI regarding operational matters and the general status of ongoing operations; (iii) use commercially reasonable efforts not to take or allow to be taken any action which would jeopardize render, or which reasonably may be expected to render, any representation or warranty made by it in this Agreement untrue in any material respect at any time prior to the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposesEffective Time if then made; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.and
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. From the date of this Agreement to hereof until the Effective Time, unless Parent Purchaser shall otherwise agree in writing, or except as set forth in the Company Disclosure Letter or as otherwise contemplated by this Agreement, or any Exhibit heretothe Company and the Company Subsidiaries shall conduct their respective businesses in the ordinary course consistent with past practice and shall use all reasonable efforts to preserve intact their business organizations and relationships with third parties (including but not limited to their respective relationships with policyholders, or insureds, agents, underwriters, brokers and investment customers) and to keep available the services of their present officers and key employees, subject to the terms of this Agreement. Except as set forth in the Company Disclosure LetterLetter or as otherwise provided in this Agreement, from the date hereof until the Effective Time, without the prior written consent of Purchaser:
(a) the respective businesses Company shall not adopt or propose any change in its Restated Articles of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company Incorporation or any Company SubsidiaryBylaws;
(b) the Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution with respect to any shares of capital stock of the Company (except for regular quarterly dividends payable in cash, stock or propertyan amount no greater than $.22 per share until the end of the first fiscal quarter of 1997 and $.23 per share thereafter), or split, combine or reclassify any of the Company's capital stock, and the Company and the Company Subsidiaries shall not repurchase, redeem or otherwise acquire any shares of its capital stock or shares of other securities of, or other ownership interests in, the capital stock of any of the Company SubsidiariesCompany;
(c) neither subject to Section 7.3, the Company nor shall not, and shall not permit any Company Subsidiary to, merge or consolidate with any other person or (except in the ordinary course of business) acquire a material amount of assets of any other person;
(d) the Company shall not, and shall not permit any Company Subsidiary to, sell, lease, license or otherwise surrender, relinquish or dispose of (i) any material facility owned or leased by the Company or any Company Subsidiary or (ii) any assets or property which are material to the Company and the Company Subsidiaries shall taken as a whole, except pursuant to existing contracts or commitments (i) authorize for issuance, issue or sell any additional shares ofthe terms of which have been disclosed to Purchaser prior to the date hereof), or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; practice;
(iiie) incurthe Company shall not, assume and shall not permit any Company Subsidiary to, settle any material audit, make or prepay change any material Tax election or file amended Tax Returns;
(f) the Company and the Company Subsidiaries shall not issue any capital stock or other securities or enter into any amendment of any material term of any outstanding security of the Company, and the Company and the Company Subsidiaries shall not incur any material indebtedness or any other material liabilities other than except in the ordinary course of business and consistent with past practices; (iv) assumepursuant to existing credit facilities or arrangements, guarantee, endorse amend or otherwise increase, accelerate the payment or vesting of the amounts payable or to become liable payable under or responsible fail to make any required contribution to, any Company Plan (whether directlyas hereinafter defined) or materially increase any non-salary benefits payable to any employee or former employee, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary except in the ordinary course of business and consistent with past practices; practice or as otherwise permitted by this Agreement;
(vg) make the Company shall not, and shall not permit any loans, advances or capital contributions Company Subsidiary to, grant any increase in the compensation or investments inbenefits of directors, officers, employees, consultants or agents of the Company or any other person, Company Subsidiary other than to Company Subsidiaries and other than increases in the ordinary course of business and consistent with past practices; practice;
(vih) authorize capital expenditures substantially in excess the Company shall not, and shall not permit any Company Subsidiary to, enter into or amend any employment agreement or other employment arrangement with any employee of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than Subsidiary, except in the ordinary course of business; business consistent with past practices (which past practices shall not be deemed to include actions taken in connection with the Merger);
(i) the Company shall not change any method of accounting or accounting practice by the Company or any Company Subsidiary, except for any such required change in GAAP or the Virginia Statutory Accounting Principles;
(viiij) the Company shall not, and shall not permit any Company Subsidiary to, take any action that would reasonably be expected to cause the Merger to fail to qualify as a tax-free reorganization within the meaning of Section 368(a) of the Code;
(k) except as contemplated by Section 6.3, the Company shall not permit any Company Insurance Subsidiary to conduct transactions in Company Investments except in compliance with the investment policies of such Company Insurance Subsidiary in effect on the date hereof and all applicable insurance laws and regulations;
(l) the Company shall not, and shall not permit any Company Subsidiary to, enter into any contractagreement to purchase, agreementor to lease for a term in excess of one year, commitment any real property, provided that the Company, or arrangement with respect any Company Subsidiary, (i) may as a tenant, or a landlord, renew any existing lease for a term not to exceed eighteen months and (ii) nothing herein shall prevent the Company, in its capacity as a landlord, from renewing any lease pursuant to an option granted prior to the date hereof;
(m) the Company shall not, and shall not permit any Company Subsidiary to, agree or commit to do any of the foregoing;
(dn) except to the extent necessary to comply with the requirements of applicable laws and regulations, the Company shall use reasonable efforts not, and shall not permit any Company Subsidiary to, (i) take, or agree or commit to preserve intact the business organization take, any action that would make any representation and warranty of Company and the Company Subsidiarieshereunder inaccurate in any material respect at, or as of any time prior to, the Effective Time, (ii) omit, or agree or commit to omit, to keep available take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time, provided however, that the services of its and their present officers and key employeesCompany shall be permitted to take or omit to take such action which (without any uncertainty) can be cured, and in fact is cured, at or prior to preserve the goodwill Effective Time or (iii) take, or agree or commit to take, any action that would result in, or is reasonably likely to result in, any of those having business relationships with it and the Company Subsidiaries;conditions of the Merger set forth in Article VIII not being satisfied; and
(eo) neither Company nor any none of the Company Subsidiaries shall make any material change in the compensation payable its underwriting, claims management or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codereserving practices.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER4.1 Conduct of Business by the Company Pending the Merger. From the date of this Agreement The Company covenants and agrees that, prior to the Effective Time, unless Parent and Merger Sub shall otherwise agree in advance in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Lettersubject to Parent's material compliance with Section 4.2:
(a) the respective The businesses of the Company and each of the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct Company and each of the operations Company Subsidiaries shall maintain and preserve intact their respective business organizations, use their best efforts to keep available the services of Company or any Company Subsidiarytheir respective officers and employees, and maintain significant beneficial business relationships with suppliers, contractors, distributors, customers, licensors, licensees and others having business relationships with it;
(b) Without limiting the generality of the foregoing Section 4.1(a), from and after the date hereof the Company shall not (i) sell directly or pledge or agree to sell or pledge any stock owned by it in indirectly, and shall not permit any of the Company Subsidiaries; Subsidiaries to, do any of the following, unless Parent and Merger Sub shall otherwise agree in advance in writing:
(i) sell, lease, transfer, dispose of, or mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets, or enter into any material commitment or transaction out of the ordinary course of business consistent with past practice, provided that in no event shall all actions or matters permitted under Section 4.1(b) together involve an amount greater than an aggregate of $15,000, without the consent of Parent;
(ii) amend or propose to amend its Certificate Articles of Incorporation or By-Laws; laws or, in the case of the Company Subsidiaries, their respective constituent documents or reincorporate in any jurisdiction;
(iii) split, combine or reclassify any outstanding shares of of, or interests in, its outstanding capital stock or stock;
(iv) declare, set aside or pay any dividend or other distribution distribution, payable in cash, stock stock, property or propertyotherwise with respect to any of its capital stock;
(v) redeem, purchase or redeem otherwise acquire or offer to redeem, purchase or otherwise acquire any shares of its capital stock or shares of the capital stock of the Company or any of the Company Subsidiaries or any options, warrants or rights to acquire capital stock of the Company or any of the Company Subsidiaries;
(cvi) neither issue, sell, pledge, dispose of or encumber, or authorize, propose or agree to the issuance, sale, pledge or disposition or encumbrance by the Company nor or any of the Company Subsidiaries shall (i) authorize for issuanceof, issue or sell any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, or any securities convertible into or exchangeable for any shares of, its capital stock of any class (whether through the issuance class, or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose any other securities in respect of, transferin lieu of, leaseor in substitution for any class of its capital stock outstanding on the date hereof;
(vii) enter into any contracts, license, mortgage, pledge commitments or encumber any fixed or other assets in excess transactions pertaining to its business out of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; practice, provided that in no event shall all actions or matters permitted under Section 4.1(b) together involve an amount greater than an aggregate of $15,000, without the consent of Parent;
(iiiviii) incurincur any indebtedness, assume obligations or prepay liability or make any indebtedness payment in respect thereof, including the making of any royalty or any other material liabilities other than in option payment out of the ordinary course of business and consistent with past practicespractice, provided that in no event shall all actions or matters permitted under Section 4.1(b) together involve an amount greater than an aggregate of $15,000, without the consent of Parent;
(ix) acquire or agree to acquire additional assets;
(x) sell, agree to sell or otherwise dispose of any of its assets;
(xi) make any payments of any type to any officer, director or shareholder of the Company or any person not dealing at arms' length with any of the foregoing; 25
(ivxii) modify the terms of any existing indebtedness for borrowed money or incur any indebtedness for borrowed money or issue any debt securities;
(xiii) assume, guarantee, endorse or otherwise as an accommodation become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person other than a Company Subsidiary in or enter into any arrangement having the ordinary course economic effect of business and consistent with past practices; (v) any of the foregoing or make any loans, loans or advances or capital contributions to, or investments in, any other person, except to the Company or any of the Company Subsidiaries;
(xiv) authorize, recommend or propose any material change in its capitalization, or any release or relinquishment of any material contract right or effect or permit any of the foregoing;
(xv) adopt or establish any new employee benefit plan or amend in any material respect any employee benefit plan or increase the compensation or fringe benefits of any employee or pay any material benefit not consistent with any existing employee benefit plan;
(xvi) make, grant, pay or commit to pay any bonus or any wage increase, salary increase or other compensation increase, whether in the form of cash, options, stock, or otherwise, to any officer, director or employee of the Company or any Company Subsidiary;
(xvii) enter into or amend in any material respect any employment, consulting, severance or indemnification agreement entered into or made by the Company or any of the Company Subsidiaries with any of their respective directors, officers or employees, or any collective bargaining agreement or other obligation to any labor organization or employee incurred or entered into by the Company or any of the Company Subsidiaries;
(xviii) fail to timely pay and discharge or dispute all federal and state taxes and other accounts payable for which it is liable;
(xix) make any tax election or settle or compromise any liability for taxes;
(xx) make or commit to make capital expenditures acquisitions of other businesses, capital assets, properties, or intellectual property;
(xxi) make any material changes in its reporting for taxes or accounting procedures other than as required by GAAP or applicable law;
(xxii) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Filed SEC Documents or incurred after the date of such financial statements, settle any litigation or other legal proceedings (notwithstanding the foregoing) or waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company or any of the Company Subsidiaries and other than in is a party out of the ordinary course of business and consistent with past practices; practice, provided that in no event shall all actions or matters permitted under Section 4.1(b) together involve an amount greater than an aggregate of $15,000, without the consent of Parent;
(vixxiii) authorize capital expenditures substantially in excess write off any accounts or notes receivable;
(xxiv) acquire or agree to acquire (x) by merging or consolidating with, or by purchasing a substantial portion of the amount currently budgeted therefor; (vii) permit assets of, or by any insurance policy naming Company other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (y) any assets that are material, individually or in the aggregate, to the Company Subsidiary and the Company Subsidiaries taken as a beneficiary whole, subject to Section 5.9;
(xxv) adopt any stockholder rights or similar plan or take any other action with the intention of, or which may have the effect of, discriminating against Parent as a loss payee stockholder of the Company (or any successor);
(xxvi) take any action that would, or that could reasonably be expected to, result in (i) any of the representations and warranties of the Company set forth in this Agreement that are qualified as to be cancelled materiality becoming untrue, (ii) any of such representations and warranties that are not so qualified becoming untrue or terminated (iii) any of the conditions to the Merger set forth in Article 6 not being satisfied;
(xxvii) take any other action or enter into any other transaction or agreement, other than in the ordinary course of business; or or
(viiixxviii) enter into into, modify or authorize any contract, agreement, commitment or arrangement with respect to do any of the foregoing;.
(c) The Company shall promptly advise Parent orally and in writing of any change or event having, or which, insofar as can reasonably be foreseen, would have, material adverse effect on the Merger or a Company Material Adverse Effect.
(d) Company shall use reasonable efforts to preserve intact the business organization For purposes of Company and the Company Subsidiariesthis Section 4.1, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf payment by Parent of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) expenditure requested by Company in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or writing pursuant to the terms of any existing Plan or agreementthe Loan Agreement shall be considered written consent to the proposed expenditures as required by this Section 4.1, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of unless Parent notifies the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment in writing of Parent's acquisition a lack of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codesuch consent.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From ARMO has agreed that, from the date of this the Merger Agreement until the earlier of the date on which Purchaser first irrevocably accepts for purchase the Shares tendered in the Offer, (the “Offer Closing Date”) and the termination of the Merger Agreement in accordance with its terms, except as expressly provided by the Merger Agreement or as disclosed prior to execution of the Merger Agreement in ARMO’s confidential disclosure letter delivered to Lilly in connection with the Merger Agreement, ARMO will conduct its business in the ordinary course and use commercially reasonable efforts to (i) preserve intact its present business organization, (ii) keep available the services of its present executive officers and key employees and (iii) preserve its present relationships and goodwill with customers, suppliers, licensors, licensees, distributors, contractors, partners and others having material business dealings with it. ARMO has further agreed that, from the date of the Merger Agreement to the Effective Timeearlier of the Offer Closing Date or the termination of the Merger Agreement in accordance with its terms, unless Parent shall otherwise agree in writing, except as expressly provided for by the Merger Agreement or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct set forth prior to execution of the operations of Company or any Company Subsidiary;
(b) Company shall Merger Agreement in ARMO’s confidential disclosure letter, ARMO will not (i) sell or pledge or agree to sell or pledge any stock owned by it in do any of the Company Subsidiariesfollowing without the prior written consent of Lilly (which consent shall not be unreasonably withheld, delayed or conditioned), among other things and subject to specified exceptions (including specified ordinary course exceptions): • enter into any new material line of business or enter into any agreement, arrangement or commitment that materially limits or otherwise restricts ARMO or its affiliates (as further described in Section 5.01(a) of the Merger Agreement), from time to time from engaging or competing in any line of business or in any geographic area or otherwise enter into any agreements, arrangements or commitments imposing material restrictions on ARMO’s assets, operations or business; • declare, set aside, establish a record date in respect of, accrue, or pay any dividends on, or make any other distribution (iiwhether in cash, stock, equity securities or property) amend its Certificate in respect of Incorporation or By-Lawsany ARMO capital stock; or (iii) • split, combine or reclassify any shares of its outstanding ARMO capital stock or declareissue or authorize the issuance of any other securities in respect of, set aside in lieu of or pay any dividend or other distribution payable in cashsubstitution for shares of ARMO’s capital stock; • repurchase, stock or propertyredeem, or offer to redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or shares of the capital stock of ARMO or any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitmentsconvertible or exchangeable securities, subscriptions, stock-based performance units or other rights to purchase or otherwise), acquire any such shares of capital stock except for (aA) unissued Shares reserved for issuance acquisitions of shares of ARMO common stock in connection with the surrender of shares of ARMO common stock by holders of ARMO stock options in order to pay the exercise price of ARMO stock options, (B) the withholding of shares of ARMO common stock to satisfy tax obligations with respect to awards granted pursuant to the ARMO stock plans and (C) the acquisition by ARMO of ARMO stock options in connection with the forfeiture of such awards, in each case in accordance with their terms; • issue, grant, deliver, sell, authorize or pledge or otherwise encumber any shares of capital stock or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire such shares, any bonds, debentures, note or other indebtedness having the right to vote or any other rights that give any person the right to receive any economic interest of a nature accruing to the holders of ARMO common stock, other issuances of ARMO common stock upon the exercise of Employee Stock Options, ARMO stock options in accordance with their terms; • amend its certificate of incorporation or bylaws or other comparable organizational documents (b) Shares except for immaterial or ministerial amendments); • form any subsidiary or acquire or agree to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose ofdirectly or indirectly, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one a single transaction or a series of related transactions transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any assets outside of the ordinary course of business, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any other person (other than ARMO), if the aggregate amount of consideration paid or transferred by ARMO would exceed $250,000; Table of Contents • adopt, enter into, establish, terminate, amend or modify any collective bargaining agreement, benefit plan or benefit agreement, or any plan or arrangement that would be a benefit plan or benefit agreement if in effect as of May 9, 2018; • ▇▇▇▇▇ to any director, employee or individual service provider any increase in compensation; • ▇▇▇▇▇ to any director, employee or individual service provider any increase in severance or termination pay; • pay or award, or commit to pay or award, any bonuses or incentive compensation; • enter into any employment, retention, consulting, change in control, severance or termination agreement with any director, employee or individual service provider; • take any action to accelerate any rights or benefits under any benefit plan or benefit agreement, or the funding of any payments or benefits under any benefit plan or benefit agreement; • terminate the employment or service of any employee or individual service provider of ARMO whose total annual compensation exceeds $100,000, other than for cause; • hire any employee or individual service provider whose total annual compensation would exceed $100,000; • make any change in accounting methods, principles or practices, except as may be required (i) by GAAP (or any authoritative interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (ii) by law, including Regulation S-X promulgated under the Securities Act of 1933, as amended, in each case as agreed to by ▇▇▇▇’s independent public accountants; • sell, lease (as lessor), license or otherwise transfer (including through any “spin-off”), or pledge, encumber or otherwise subject to any lien (other than a permitted lien), any properties or assets (other than intellectual property) except (i) sales or other dispositions of inventory and excess or obsolete properties or assets in the ordinary course of business, (ii) pursuant to contracts to which ARMO is a party made available to Lilly and in effect prior to the date of the Merger Agreement or (iii) properties or assets having a fair market value of less than $250,000 in the aggregate; • sell, assign, license or otherwise transfer any of intellectual property owned by ▇▇▇▇, except (i) for licenses (including sublicenses) to intellectual property granted in the ordinary course of business, (ii) pursuant to contracts to which ARMO is a party made available to Lilly and in effect prior to May 9, 2018, or (iii) abandonment or other disposition of any of ARMO’s intellectual property at the end of the applicable statutory term, in the ordinary course of prosecution or otherwise in the ordinary course of business; • incur or materially modify the terms of (including by extending the maturity date thereof) any indebtedness for borrowed money or guarantee any such indebtedness of another person; • issue or sell any debt securities or warrants or other rights to acquire any debt securities of ARMO, guarantee any debt securities of another Person; • enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, in each case other than (A) interest rate and other hedging arrangements on customary commercial terms in the ordinary course of business and consistent with past practices; practice or (iiiB) incur, assume or prepay any indebtedness or any other material liabilities other than short-term borrowings incurred in the ordinary course of business and consistent with past practicesnot in excess of $250,000 in aggregate principal amount outstanding at any one time; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) • make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and or in (A) ARMO, (B) any acquisition not in violation of the Merger Agreement or (C) any person pursuant to any advancement obligations under ARMO’s certificate of incorporation or bylaws or indemnification agreements as in effect on or prior May 9, 2018; Table of Contents • other than in accordance with ARMO’s capital expenditure budget made available to Lilly, make or agree to make any capital expenditure or expenditures that in the aggregate are in excess of $250,000; • pay, discharge, settle, compromise or satisfy (i) any pending or threatened claims, liabilities or obligations relating to a legal proceeding (absolute, accrued, asserted or unasserted, contingent or otherwise), other than any such payment, discharge, settlement, compromise or satisfaction of a claim solely for money damages in the ordinary course of business and consistent with past practicesin an amount not to exceed $250,000 individually or $500,000 in the aggregate or (ii) any litigation, arbitration, proceeding or dispute that relates to the Transactions; (vi) authorize capital expenditures substantially in excess • make, change or revoke any material tax election, change any annual tax accounting period or adopt or change any material method of tax accounting, file any amended material tax return, enter into any closing agreement within the meaning of Section 7121 of the amount currently budgeted thereforCode (or any similar provision of state, local or foreign law), or settle or compromise any material tax liability or refund; (vii) permit • amend, cancel or terminate any material insurance policy naming Company or any Company Subsidiary ARMO as an insured, a beneficiary or a loss payable payee without obtaining comparable substitute insurance coverage; • adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger); • abandon, cancel, fail to renew, permit to lapse (A) any of ARMO’s registered intellectual property or (B) any of ARMO’s material registered intellectual property that is exclusively licensed to ARMO to the extent that ARMO has the right to take or cause to be cancelled taken such action pursuant to the terms of the applicable contract under which such intellectual property is licensed to ARMO; • fail to renew, terminate or terminated permit to lapse any contract under which material intellectual property is licensed to ARMO; • disclose to any third party, other than under a confidentiality agreement or other legally binding confidentiality undertaking, any trade secret of ARMO that is included in ARMO’s intellectual property in a way that results in loss of material trade secret protection thereon, except for any such disclosures made as a result of a publication of a patent application filed by ARMO or in connection with any required regulatory filing; • sell, transfer, license or otherwise encumber any of ARMO’s material intellectual property other than non-exclusive licenses ancillary to research, development, manufacture, clinical testing, sale, distribution and commercialization activities relating to products or services entered into in the ordinary course of business consistent with past practice; • except as is in the ordinary course of business, enter into, terminate or modify in any material respect, or release any material rights under, specified material contracts or any contract that, if existing on May 9, 2018, would have been a specified material contract; • participate in any scheduled meetings or (viii) enter into teleconferences with, or correspond in writing, communicate or consult with the FDA or any contractsimilar governmental entity without providing Lilly with prior written notice and, agreementwithin 24 hours from the time such written notice is delivered, commitment or arrangement the opportunity to consult with ARMO with respect to such correspondence, communication or consultation, in each case to the extent permitted by applicable law; or • authorize, commit or agree to take any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing actions.
Appears in 1 contract
Sources: Offer to Purchase (Lilly Eli & Co)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 6.01. From Conduct of Business by the Company Pending the Merger. The Company agrees that, between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as otherwise expressly contemplated by this AgreementAgreement and Section 6.01 of the Disclosure Schedule (including the capital expenditure plan set forth therein), neither the Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any Exhibit hereto, or of the Company Disclosure Letterfollowing without the prior written consent of Parent:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company amend or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend otherwise change its Certificate of Incorporation or By-Laws; laws or equivalent organizational documents;
(iiib) splitissue, combine sell, pledge, dispose of, grant, encumber, or reclassify authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares class of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor or any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock, its capital stock or any other ownership interest (including, without limitation, any phantom interest), of the Company or any class Subsidiary (whether through except for the issuance of Shares issuable pursuant to Company Stock Options outstanding on the date hereof or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant ESPP or the issuance of Company Stock Options pursuant to offer letters outstanding on the date of this Agreement that have been given to potential new employees of the Company or any Subsidiary) or (ii) any assets of the Company or any Subsidiary, except in the ordinary course of business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any assets, except, in the Employee Sharescase of assets, (A) raw materials, supplies, intermediates or similar assets used in the business on a day-to-day basis consistent with past practice, (B) replacement parts or necessary replacement equipment or (C) other equipment acquired for a price of no more than $50,000, individually, or $300,000, in the aggregate; (ii) acquireincur any indebtedness for borrowed money or issue any debt securities or assume, dispose ofguarantee or endorse, transferor otherwise become responsible for, leasethe obligations of any person, licenseor make any loans or advances, mortgage, pledge or encumber grant any fixed or other assets in excess of $5,000,000 security interest in any one of its assets except in the ordinary course of business and consistent with past practice; (iii) enter into any contract or a series of related transactions agreement other than in the ordinary course of business and consistent with past practicespractice; (iv) authorize, make any commitment with respect to, or undertake capital expenditures which are, in the aggregate, in excess of $500,000 for the Company and the Subsidiaries taken as a whole, except for completion of any construction that is in process as of the date of this Agreement or any capital expenditure that is contemplated by the capital expenditure plan set forth in Section 6.01 of the Disclosure Schedule; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 6.01(e);
(f) except as required by applicable Law and except as required to fulfill obligations of the Company and the Subsidiaries which are existing on the date hereof and have been disclosed to Parent, (i) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries or wages or benefits of employees of the Company or any Subsidiary who are not directors or officers of the Company or any Subsidiary, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or of any Subsidiary, or (iii) incurestablish, assume adopt, enter into or prepay amend in any indebtedness material respect any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee other than immaterial amendments, changes in collective bargaining agreements resulting from negotiations in respect thereof in the ordinary course of business and consistent with past practice and changes in benefit plans as a result of such changes in collective bargaining agreements;
(g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice or as required to comply with GAAP or the rules and regulations of the SEC, with respect to accounting policies or procedures;
(h) make any tax election or settle or compromise any material liabilities United States federal, state, local or non-United States income tax liability;
(i) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business and consistent with past practicespractice;
(j) amend or modify any material term of, or consent to the termination of, any Material Contract, or amend, waive, or modify in any material respect or consent to the termination of the Company's or any Subsidiary's rights thereunder; provided that, if beneficial ownership (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) determined for the obligations purposes of this paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of 15% or more of the then-outstanding Shares has been acquired by any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than Parent or any of its affiliates, the Board may take all necessary action with respect to the Rights Agreement (without redeeming the Rights) so that such ownership of Shares will not result in such person being an Acquiring Person (as defined in the Rights Agreement), the occurrence of a "flip-in event" or a "flip-over event" (each, as defined in the Rights Agreement), the Rights becoming exercisable or evidenced by, and transferable pursuant to, certificates separate from the Shares or the triggering of any other provisions of the Rights Agreement, and provided, further, that the Company Subsidiaries may, after consultation with Parent, amend or modify, or consent to the termination of, or amend, waive or modify rights of the Company or of any Subsidiary under, any Material Contract that is of the type described by Section 4.18(a)(i), (iv), (ix), (x) or (xiv) (and is not of the type described by any other subsection of Section 4.18) other than the supply agreement between Glaxo Operations UK Limited, ChiRex (▇▇▇▇▇) Limited and ChiRex (Holdings) Limited;
(k) commence or settle any Action that would reasonably be expected to have a Material Adverse Effect;
(i) abandon, sell, or assign any item of the Company Intellectual Property, other than in the ordinary course of business and consistent with past practicespractice; (viii) authorize capital expenditures substantially grant any security interest in excess and to any item of Company Intellectual Property; or (iii) disclose, or allow to be disclosed, any confidential Company Intellectual Property, unless such Company Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against unauthorized disclosure thereof;
(m) enter into (i) any License in which the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as is a beneficiary licensee or a loss payee to be cancelled or terminated other than in the ordinary course of business; sublicensee or (viiiii) except for any License related solely to the pharmaceutical industry, any License in which the Company or any Subsidiary is a licensor or sublicensor; or
(n) announce an intention, enter into any contractformal or informal agreement or otherwise make a commitment, agreement, commitment or arrangement with respect to do any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Sources: Merger Agreement (Chirex Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 4.01. From Conduct of Business by the Company Pending the Merger. ----------------------------------------------------- The Company covenants and agrees that, between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, neither the Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or any Exhibit heretoindirectly do, or propose to do, any of the Company Disclosure Letterfollowing without the prior written consent (which consent shall not be unreasonably withheld) of Parent:
(a) the respective businesses amend or otherwise change its Articles of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company Incorporation or any Company SubsidiaryBy-laws or equivalent organizational documents;
(b) Company shall not issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any class of the Company Subsidiaries;
(c) neither Company nor or any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock, its capital stock or any other ownership interest (including, without limitation, any phantom interest), of the Company or any class Subsidiary (whether through except for the issuance in accordance with their respective terms of a maximum of 108,500 Shares issuable pursuant to employee stock options outstanding on the date hereof, or granting the continuation of optionsthe Company's policy of reissuing Shares for directors fees, warrants, commitments, subscriptions, rights to purchase if elected by any director) or otherwise)(ii) any assets of the Company or any Subsidiary, except for (a) unissued Shares reserved for issuance upon sales in the exercise ordinary course of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire, for more than $200,000 in any single transaction, or $1,000,000 in the Employee Sharesaggregate, for any group of transactions, (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof or any material amount of assets; (ii) acquireincur any indebtedness for borrowed money, dispose ofor issue any debt securities or assume, transferguarantee or endorse, leaseor otherwise as an accommodation become responsible for, licensethe obligations of any person, mortgageor make any loans or advances, pledge or encumber any fixed or other assets except, in excess of $5,000,000 in any one or a series of related transactions other than each case, in the ordinary course of business and consistent with past practicespractice; (iii) incur, assume enter into any contract or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated agreement other than in the ordinary course of business, consistent with past practice; (iv) authorize any single capital expenditure which is in excess of $200,000 or capital expenditures which are, in the aggregate, in excess of $2,000,000 for the Company and the Subsidiaries, taken as a whole; or (viiiv) enter into or amend any contract, agreement, commitment or arrangement with respect to any of the foregoingmatter set forth in this Section 4.01(e);
(df) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(eexcept as set forth in Section 4.01(f) neither Company nor any of the Company Subsidiaries shall make any change in Disclosure Schedule, increase the compensation payable or to become payable to any of its officers, directors officers or employees, except for increases in accordance with existing agreements, past practices in salaries or wages of employees of the Company or any Subsidiary who are not officers of the Company, or grant any severance or termination pay to or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, severancetermination, termination severance or other similar plan, agreement, adopt any new Plan trust, fund, policy or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements arrangement for or on behalf the benefit of any of such personsdirector, whether contingent on consummation of the Merger officer or otherwiseemployee;
(g) take any action, other than (i) reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (ii) as may be required under applicable Law or including, without limitation, procedures with respect to the terms payment of any existing Plan or agreement, accounts payable and (iii) the granting collection of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andaccounts receivable);
(fh) neither Company nor make any of the Company Subsidiaries shall tax election or settle or compromise any material federal, state, local or foreign income tax liability; or
(i) knowingly take pay, discharge or allow to be taken satisfy any action which would jeopardize claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the treatment payment, discharge or satisfaction, in the ordinary course of Parent's acquisition business and consistent with past practice, of Company as a pooling liabilities reflected or reserved against in the 1998 Balance Sheet or subsequently incurred in the ordinary course of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codebusiness and consistent with past practice.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 5.01 Conduct of Business by C Co Pending the Merger. From C Co agrees that, between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, or except as otherwise expressly contemplated by this Agreement, as required by law, as set forth in Section 5.01 of the C Co Disclosure Schedule or as approved by F Co in writing (which approval shall not be unreasonably withheld or delayed), Merger Co shall conduct no business, and the business of C Co and the C Co Subsidiaries (other than Merger Co) shall be conducted in the ordinary course of business and C Co and such C Co Subsidiaries shall use their reasonable best efforts to preserve substantially intact their respective business organizations, and to preserve their present relationships with customers, suppliers and other persons with which they have significant business relations. Without limiting the generality of the foregoing, except as contemplated by any Exhibit heretoother provision of this Agreement, as required by law, or as set forth in Section 5.01 of the Company C Co Disclosure Letter:Schedule, neither C Co nor any C Co Subsidiary (other than Merger Co, which shall conduct no business between the date hereof and the Effective Time) shall, between the date of this Agreement and the Effective Time, without the prior written consent of F Co (which consent shall not be unreasonably withheld or delayed):
(a) the respective businesses amend or otherwise change its Articles of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company Incorporation or any Company SubsidiaryBylaws (or comparable organizational documents);
(b) Company shall not issue, sell, pledge, dispose of, grant, or encumber: (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares class of its capital stock or shares of the capital stock of C Co or any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofsuch C Co Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock, C Co Rights, or any other ownership interest (including any phantom interest), of C Co or any such C Co Subsidiary, except for the issuance of shares of C Co Common Stock and associated C Co Rights issuable pursuant to C Co Stock Options or C Co Restricted Stock Units outstanding on the date hereof under C Co Stock Option Plans; or (ii) any assets of C Co or any such C Co Subsidiary worth $2,500,000 in any individual transaction or $10,000,000 in the aggregate, except in the ordinary course of business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)stock, except for (ai) unissued Shares reserved regular cash dividends on C Co Common Stock or dividends by any direct or indirect wholly-owned C Co Subsidiary to C Co or any other C Co Subsidiary, each in a manner consistent with past practice as described in Section 3.03(c) hereof, and (ii) declaration and payment of the Special Dividend or provisions made at Closing for issuance upon the payment thereof;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock of C Co or any C Co Subsidiary, other than in connection with the exercise of Employee C Co Stock OptionsOptions or the forfeiture of restricted stock awards, (b) Shares to be issued or pursuant to other contractual rights existing on the Warrant Agreement and date hereof;
(ce) (i) acquire (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof having a value (including the Employee Sharesamount of any assumed indebtedness) in excess of $15,000,000, individually, or $50,000,000, in the aggregate; (ii) acquirerepurchase, dispose ofrepay, transfercancel or incur any indebtedness for borrowed money, leaseother than (A) capital leases in the ordinary course of business consistent with past practice, license, mortgage, pledge (B) under the existing credit facilities of C Co and such C Co Subsidiaries in the ordinary course of business or encumber (C) scheduled payments in connection with currently outstanding indebtedness for borrowed money; (iii) grant any fixed or other assets in excess of $5,000,000 Lien in any one of its material assets to secure any indebtedness for borrowed money; (iv) issue any debt securities or a series assume, endorse, or otherwise become responsible for, the obligations of related transactions other than any person, or make any loans or advances, except in the ordinary course of business and consistent with past practicespractice; (iiiv) incurexcept to the extent the amount is reflected in the 2005 capital expenditure budget, assume authorize, or prepay make any indebtedness commitment with respect to, any single capital expenditure which is in excess of $2,500,000 or capital expenditures which are, in the aggregate, in excess of $10,000,000 for C Co and the C Co Subsidiaries taken as a whole; (vi) enter into any other material liabilities new line of business outside of its existing business segments; or (vii) make investments in persons other than wholly-owned C Co Subsidiaries, other than ordinary course investments in accordance with C Co’s existing investment policy;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of C Co or, except in the ordinary course of business, any such C Co Subsidiary;
(g) except in the ordinary course of business and in a manner consistent with past practices; practice: (ivi) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in increase the compensation payable or to become payable or the benefits provided to any current or former director or executive officer or, any other current or former employee; (ii) grant any retention, severance or termination pay to, or enter into any employment, bonus, change of its officerscontrol or severance agreement with, any current or former director or executive officer or any other current or former employee; or (iii) establish, adopt, enter into, terminate or materially amend any collective bargaining agreement or C Co Plan (other than individual contracts, agreements or commitments with employees who are not directors or employeesexecutive officers) or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be such a C Co Plan if it were in existence as of the date of this Agreement, except as required by law or under any existing C Co Plan or Contract;
(i) except as required by law or the Treasury Regulations promulgated under the Code, make any change in any method of Tax accounting for a material amount of Taxes or (ii) make, change or rescind any material Tax election, settle or compromise any material Tax liability, file any amended Tax Return involving a material amount of additional Taxes (except as required by law), enter into any closing agreement relating to a material amount of Taxes, or amend any employment, severance, termination waive or extend the statute of limitations in respect of Taxes (other similar agreement, adopt any new Plan or amend than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business);
(i) make any material respect any existing Planchange to its methods of accounting in effect at December 31, or make any loans to any of its officers2004, directors or employees or make any except (i) as required by changes in its existing borrowing GAAP (or lending arrangements for any interpretation thereof) or on behalf Regulation S-X under the Exchange Act (“Regulation S-X”), (ii) as may be required by a change in applicable law or (iii) as disclosed in the C Co SEC Reports filed prior to the date hereof or as required by a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board (“FASB”) or any similar organization);
(j) write up, write down or write off the book value of any assets of C Co and such persons, whether contingent on consummation of the Merger or otherwiseC Co Subsidiaries, other than (i) in the ordinary course of business and consistent with past practice, practice or (ii) as may be required under applicable Law by GAAP, FASB or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andRegulation S-X;
(fk) neither Company nor pay, discharge, waive, settle or satisfy any claim (which shall include, but not be limited to, any pending or threatened material Action in excess of $2,500,000, other than in the ordinary course of business and consistent with past practice;
(l) enter into any agreement that restricts the ability of C Co or any of the Company C Co Subsidiaries shall to engage or compete in any line of business in any respect material to the business of C Co and the C Co Subsidiaries, taken as a whole, other than in the ordinary course of business;
(m) other than in the ordinary course of business, in a manner consistent with past practice and on terms not materially adverse to C Co and the C Co Subsidiaries taken as a whole, (i) knowingly take enter into, amend, modify, cancel or allow consent to the termination of any Specified C Co Contract (other than any Specified C Co Contract described in Section 3.17(b)(viii)) or any Contract that would be taken a Specified C Co Contract (other than any action which would jeopardize Specified C Co Contract described in Section 3.17(b)(viii)) if in effect on the treatment date of Parent's acquisition of Company as a pooling of interests for accounting purposesthis Agreement; or (ii) knowingly amend, waive, modify, cancel or consent to the termination of C Co’s or any C Co Subsidiary’s rights thereunder;
(n) enter into, amend, modify or waive any rights under any Contract or transaction (or series of related Contracts or transactions) with an executive officer or director (or, other than on arm’s-length terms in the ordinary course of business, any person in which such executive officer or director, or, to the knowledge of C Co, any immediate family member of such executive officer or director, has over a 10% interest) involving amounts in excess of $60,000;
(o) fail to maintain in full force and effect or fail to use commercially reasonable efforts to replace or renew material insurance policies existing as of the date hereof and covering C Co and the C Co Subsidiaries and their respective properties, assets and businesses, taken as a whole;
(p) take any action that that, to the knowledge of C Co, would jeopardize qualification reasonably be likely to prevent or materially delay satisfaction of the Merger as a reorganization within conditions contained in Section 7.01 or 7.03 or the meaning of section 368(a) consummation of the CodeMerger; or
(q) agree to take any of the actions described in Sections 5.01(a) through 5.01(p) above.
Appears in 1 contract
Sources: Merger Agreement (Certegy Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by Parent Pending the Merger. From the date Except as set forth in Section 6.1 of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, Parent's Disclosure Schedule or as otherwise contemplated by this Agreement, after the date hereof and prior to the Effective Time or any Exhibit heretoearlier termination of this Agreement, or unless otherwise agreed in writing by the Company Disclosure LetterCompany, Parent shall and shall cause each of its subsidiaries to:
(a) the conduct their respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell amend or pledge propose to amend their respective charters or agree to sell or pledge any stock owned by it in any of the Company Subsidiariesby-laws; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its their outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or property, otherwise; or redeem or otherwise acquire (iii) knowingly take any shares action which would result in a failure to maintain the trading of its capital stock or shares of Parent Common Stock on the capital stock of any of the Company SubsidiariesNasdaq SmallCap Market;
(c) neither Company nor any of the Company Subsidiaries shall not (i) except for the issuance of shares of common stock upon the exercise of currently outstanding stock options or warrants, authorize for issuancethe issuance of, issue issue, sell, pledge or sell dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its their capital stock of any class (whether through the issuance or granting of optionsany debt or equity securities convertible into or exchangeable for such capital stock, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquiresell (including, without limitation, by sale/leaseback), pledge, dispose of, transfer, lease, license, mortgage, pledge license or encumber any fixed material assets (including, without limitation, intellectual property), or other assets in excess of $5,000,000 in any one or a series of related transactions interests therein, other than in the ordinary course of business and consistent with past practicespractice; (iii) incurredeem, assume purchase, acquire or prepay offer to purchase or acquire any indebtedness or any other material liabilities (x) shares of their capital stock, other than in accordance with the ordinary course governing terms of business and consistent with past practices; such securities or (ivy) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other personlong-term debt, other than to Company Subsidiaries and other than in as required by the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of businessgoverning instruments relating thereto; or (viiiiv) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable their best efforts to preserve intact the their respective business organization of Company organizations and the Company Subsidiariesgoodwill, to keep available the services of its and their respective present officers and key employees, and to preserve the goodwill of those and business relationships with suppliers, distributors, customers, and others having business relationships with it and the Company Subsidiariesthem;
(e) neither Company nor any confer on a regular and frequent basis with one or more representatives of the Company Subsidiaries shall make to discuss operational matters of materiality and the general status of ongoing operations;
(f) promptly notify the Company of any change significant changes in the compensation payable or to become payable to any of its officersbusiness, directors or employeesproperties, enter into or amend any employmentassets, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Planfinancial condition, or make results of operations of Parent and its subsidiaries taken as a whole;
(g) not acquire, or publicly propose to acquire, all or any loans to any substantial part of its officers, directors the business and properties or employees or make any changes in its existing borrowing or lending arrangements for or on behalf capital stock of any of such personsperson not a party to this Agreement, whether contingent on consummation by merger, purchase of the Merger assets, tender offer or otherwise;
(h) not, directly or indirectly, through any officer, director, employee, representative, agent, or otherwise, solicit, initiate or encourage, including by way of furnishing information, or take any other action to facilitate, the submission of any proposal or offer from any person (including, without limitation, a "person" as defined in Section 13(d)(3) of the Exchange Act) or entity relating to any acquisition or purchase of all or (other than (i) in the ordinary course of business) any portion of the assets of, or any equity interest in, or any merger or other business combination with, Parent or any of its subsidiaries (collectively, an "Acquisition Transaction") or participate in any discussion or negotiations regarding any Acquisition Transaction; provided, however, that if Parent's Board of Directors determines in good faith, after consultation with and consistent based on the written advice of outside counsel that it is required to do so in order to comply with past practiceits fiduciary obligations to its stockholders under New York law, (iia) as following receipt of a bona fide unsolicited written offer to consummate an Acquisition Transaction, Parent may take and disclose to its stockholders the position of Parent's Board of Directors contemplated by Rule 14e-2 under the Exchange Act or otherwise make appropriate disclosures to its stockholders, (b) Parent may furnish or cause to be required under applicable Law furnished information concerning its business, properties or assets to a bona fide third party on terms substantially similar to those set forth in the terms of any existing Plan or agreementletter agreement entered into in July 1998 between Parent and the Company (the "Confidentiality Agreement"), and (iiic) Parent may engage in discussions or negotiations with a third party concerning an Acquisition Transaction with respect to Parent, provided that Parent shall notify the granting Company promptly (orally and in writing) of retention bonuses to certain officers any such offer, the material terms of such offer and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any the identity of the person making the offer, and shall keep the Company Subsidiaries shall (i) knowingly take or allow informed as to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification status and details of the Merger as a reorganization within the meaning of section 368(a) of the Code.offer;
Appears in 1 contract
Sources: Merger Agreement (Room Plus Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. From the date of this Agreement Prior to the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise expressly contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses Company shall conduct, and cause each of Company and the Company its Subsidiaries shall be conducted to conduct, its business only in the ordinary and usual course of business and consistent with past practicespractice, and there the Company shall be no material changes in use, and cause each of its Subsidiaries to use, its reasonable efforts to preserve intact the conduct present business organization, keep available the services of its present officers and key employees, and preserve the operations goodwill of Company or any Company Subsidiarythose having business relationships with it;
(b) the Company shall not not, nor shall it permit any of its Subsidiaries to, (i) sell amend its charter, bylaws or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; other organizational documents, (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or stock, (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or (iv) directly or indirectly redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company its Subsidiaries;
(c) neither except as provided in Schedule 6.1(c), the Company shall not, nor shall it permit any of the Company its Subsidiaries shall to, (i) authorize for issuance, issue or sell or agree to issue or sell any additional shares of, or rights of any kind Rights to acquire or which are convertible into any shares of, its capital stock or shares of the capital stock of any class of its Subsidiaries (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for the issuance of shares of Company Common Stock upon the exercise of Employee Company Stock Options, (b) Shares to be issued pursuant to Options outstanding on the Warrant date of this Agreement and (c) the Employee Sharesissuance of options in connection with the hiring of sales representatives consistent with past practices; (ii) acquiremerge or consolidate with another entity; (iii) acquire or purchase an equity interest in or a substantial portion of the assets of another corporation, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed partnership or other business organization or otherwise acquire any assets in excess of $5,000,000 in any one or a series of related transactions other than in outside the ordinary and usual course of business and consistent with past practicespractice or otherwise enter into any material contract, commitment or transaction outside the ordinary and usual course of business consistent with past practice; (iiiiv) sell, lease, license, waive, release, transfer, encumber or otherwise dispose of any of its assets outside the ordinary and usual course of business and consistent with past practice; (v) incur, assume or prepay any material indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practicespractice; (ivvi) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary of the Company, in each case in the ordinary course of business and consistent with past practicespractice; (vvii) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in of the ordinary course of business and consistent with past practicesCompany; (viviii) authorize or make capital expenditures substantially in excess of the amount amounts currently budgeted therefor; (viiix) permit any insurance policy naming the Company or any Subsidiary of the Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viiix) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) the Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiariesnot, to keep available the services of nor shall it permit its and their present officers and key employeesSubsidiaries to, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) adopt, enter into, terminate or amend (except as may be required by Applicable Law) any Company Plan or other arrangement for the current or future benefit or welfare of any director, officer or current or former employee, (ii) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or employee (except for normal increases in salaried compensation in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) take any action to fund or in any other way secure, or to accelerate or otherwise remove restrictions with respect to, the granting payment of retention bonuses compensation or benefits under any employee plan, agreement, contract, arrangement or other Company Plan (including the Company Stock Options);
(e) the Company shall not, nor shall it permit its Subsidiaries to, take any action with respect to, or make any material change in, its accounting or tax policies or procedures, except as required by law or to certain officers and employees in an aggregate amount not to exceed $2,000,000; andcomply with GAAP;
(f) neither Company nor any of the Company Subsidiaries shall not (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of the Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that which would jeopardize qualification of the Merger as a reorganization within the meaning of section Section 368(a) of the Code.
Section 6.2 Conduct of Business by Parent Pending the Merger. Prior to the Effective Time, unless the Company shall otherwise agree in writing, and except as otherwise expressly contemplated by this Agreement:
(a) Parent shall conduct its business and the business of its Subsidiaries in a manner designed, in the good faith judgment of its Board of Directors, to enhance the long-term value of the Parent Common Stock and the business prospects of Parent and Subsidiaries;
(b) Parent shall not (i) split, combine or reclassify any shares of its outstanding capital stock; or (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property;
(c) Parent shall not authorize for issuance, issue or sell or agree to issue or sell any shares of, or Rights to acquire or which are convertible into any shares of, its capital stock, except for (i) the issuance of shares of Parent Common Stock (x) upon the exercise of stock options or other Rights outstanding on the date of this Agreement, or (y) upon the exercise of Rights described in the immediately following clause (ii) or (z) upon the conversion of the Parent Preferred Stock in accordance with its present terms, (ii) the issuance of Rights or shares of Parent Common Stock pursuant to existing employee benefit plans or arrangements in a manner consistent with past practice, and (iii) the issuance of shares of Parent Common Stock or Rights in connection with arm's length transactions with non-affiliates;
(d) neither Parent nor Sub shall (i) take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of the Company as a pooling of interests for accounting purposes; or (ii) take any action which would jeopardize qualification of the Merger as a reorganization within the meaning of Section 368(a) of the Code.
Appears in 1 contract
Sources: Merger Agreement (Schein Henry Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER7.1 Conduct of Business of the Company Pending the Merger. From Except as expressly contemplated by this Agreement or as expressly agreed to in writing by Parent, during the period from the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writingthe Company will conduct its operations according to its ordinary course of business consistent with past practice, and will use all commercially reasonable efforts to keep intact its business organization, to keep available the services of its officers and employees and to maintain satisfactory relationships with suppliers, distributors, customers and others having business relationships with it and will take no action which would impair the ability of the parties to consummate the Merger or as otherwise the other transactions contemplated by this Agreement. Without limiting the generality of the foregoing, or any Exhibit heretoand except as otherwise expressly provided in this Agreement, or prior to the Effective Time, the Company Disclosure Letterwill not, without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(a) the respective businesses amend its articles of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company incorporation or any Company Subsidiaryby-laws;
(b) Company shall not (i) authorize for issuance, issue, sell, deliver, grant any warrants, options or other rights for, or otherwise agree or commit to issue, sell or pledge deliver any shares of any class of its capital stock or agree to sell or pledge any securities convertible into shares of any class of its capital stock owned by it in any (except for the exercise of the Company Subsidiaries; currently outstanding stock options);
(ii) amend its Certificate of Incorporation or By-Laws; or (iiic) split, combine or reclassify any shares of its outstanding capital stock or stock, declare, set aside or pay any dividend or other distribution payable (whether in cash, stock or propertyproperty or any combination thereof) in respect of its capital stock or purchase, or redeem or otherwise acquire any shares of its own capital stock or shares of the capital stock of any of the Company Subsidiaries;
its subsidiaries, except as otherwise expressly provided in this Agreement; (cd) neither Company nor any of the Company Subsidiaries shall (i) authorize create, incur, assume, maintain or permit to exist any debt for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions borrowed money other than under existing lines of credit in the ordinary course of business and consistent with past practicespractice; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (ivii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (viii) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viiiiv) enter into any contract, agreement, commitment pledge or arrangement with respect to any otherwise encumber shares of capital stock of the foregoingCompany;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement The Company has agreed that, prior to the Effective Time, unless Parent shall otherwise agree in writingit will, or as otherwise contemplated by this Agreementand it will cause its subsidiaries to, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only conduct business in the ordinary course and usual course of business and in a manner consistent with past practicescustom and practice, use commercially reasonable efforts to, among other things, preserve the current relationships of the Company and its subsidiaries with customers, distributors, suppliers, licensors, licensees, contractors and other persons with which the Company or its subsidiaries has significant business relations. Further, the Company will not, and there shall be no material changes in 48 54 will cause its subsidiaries to not, prior to the conduct of the operations of Company Effective Time, directly or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in indirectly do any of the Company Subsidiaries; (ii) following without the prior written consent of Merger Sub: - amend or otherwise change its Certificate Articles of Incorporation or By-Lawslaws; - issue, sell, pledge, dispose of, grant or (iii) splitencumber, combine or reclassify authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock equity securities of any type or class of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofits subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock or other equity securities, or any other ownership interest (including, without limitation, any phantom interests), of the Company or its subsidiaries, or any assets of the Company or its subsidiaries, except for sales in the ordinary course of business consistent with past custom and practice and other asset sales for consideration or having a fair market value aggregating not more than $500,000; - declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity securities; - reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other equity securities; - acquire (including, without limitation, by merger, consolidation or acquisition of stock or assets) or agree to acquire any corporation, partnership, limited liability company, or other business organization or division, other than certain acquisitions of assets previously agreed to; - other than under the Company's existing credit facilities as in effect as of the date of the Merger Agreement, incur or agree to incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any class (whether through person, or make any loans, advances, or capital contributions to or investments in, any other person; or authorize or make capital expenditures which are not in accordance with the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant Company's calendar year 2000 budget which has been presented to the Warrant Agreement and Board of Directors prior to the date of the Merger Agreement; - enter into, establish, adopt, amend or renew any employment, consulting, severance or similar agreement or arrangements with any director, officer, or employee, or grant any salary or wage increase (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practicescustom and practice); - establish, adopt, amend or increase benefits under any pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, welfare benefit contract, plan or arrangement (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practicescustom and practice or as may be required by applicable law); (iv) assume- commence any voluntary petition, guaranteeproceeding or action under any bankruptcy, endorse insolvency or otherwise become liable other similar law; - make or responsible (whether directlyinstitute any material change in accounting methods, contingently procedures or otherwise) for practices in its accounting methods, procedures and practices unless mandated by GAAP; - enter into any agreement or other arrangement with any director, officer or shareholder of the obligations Company, its subsidiaries or any affiliate of any other person other than a Company Subsidiary of the foregoing, except in the ordinary course of business and consistent with past practicescustom and practice and with respect to the payment of reasonable compensation to the members of the Special Committee in connection with their performance of services as members of the Special Committee; (v) make - take any loansaction or omit to take any action which would result in a violation of any applicable law or would cause a breach of any agreement, advances contract or capital contributions tocommitment, which violation or breach would have or could reasonably be expected to have a Company Material Adverse Effect; or - license, assign or otherwise transfer to any person or entity any rights to any material intellectual property rights owned or used by the Company or its subsidiaries, except in the ordinary course of 49 55 business consistent with past custom or practice, or investments infail to maintain or enforce any material intellectual property rights owned or used by the Company or its subsidiaries, any other person, other than to Company Subsidiaries and other than except in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company custom or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any practice. CONDITIONS TO THE MERGER CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The respective obligations of the Company Subsidiaries shall make and Merger Sub and the Management Shareholders to complete the Merger are subject to the satisfaction or waiver of the following conditions: - the Merger Agreement and the Merger will have been approved and adopted by the affirmative vote of the requisite holders of the outstanding shares of Common Stock in accordance with Wisconsin law and the Company's Articles of Incorporation; - no order, statute, rule, regulation, executive order, stay, decree, judgment or injunction will have been enacted, entered, issued, promulgated or enforced by any change governmental authority or a court of competent jurisdiction will be in effect which makes the compensation payable Merger illegal or to become payable to any otherwise prohibits completion of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Planthe Merger, or make any loans to any of its officers, directors limits or employees restricts the Surviving Corporation's conduct or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation operation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take after the Merger; - all necessary and material governmental and regulatory clearances, consents or allow approvals will have been received; and - any applicable waiting period under the HSR Act relating to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeand related transactions will have expired or terminated.
Appears in 1 contract
Sources: Proxy Statement (Jason Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1 Conduct of Business by the Company Pending the Merger. From the date of this Agreement The Company covenants and agrees that, prior to the Effective Time, unless Parent Purchaser shall otherwise agree in writing, writing or as otherwise expressly contemplated or permitted by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses and affairs of the Company and the Company Subsidiaries its subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practicespractice;
(b) except in connection with the adoption by the Company of a shareholder rights plan that would not be applicable to, or adversely affect the transactions contemplated hereby among the parties to this Agreement, neither the Company nor any of its subsidiaries shall: (i) issue (except pursuant to employee and non-employee director stock options outstanding on the date hereof in accordance with their
(c) neither the Company nor any of its subsidiaries shall (i) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division or material assets thereof for aggregate consideration in excess of $250,000; (iiiii) incur, assume or prepay incur any indebtedness for borrowed money or issue any other material liabilities other than debt securities except the borrowing of working capital in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of businesspractice; or (viiiiii) enter into or materially modify any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and neither the Company Subsidiaries, to keep available the services nor any of its and their present officers and key subsidiaries shall enter into or modify any employment, severance or similar agreements or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, any officers, directors or employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither the Company nor any of the Company Subsidiaries its subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into adopt or amend any employmentbonus, severanceprofit sharing, termination compensation, stock option, pension, retirement, deferred compensation, employment or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andother
(f) neither the Company nor shall use reasonable efforts (i) to cause its current insurance (or reinsurance) policies not to be cancelled or terminated; and (ii) to not permit any of the coverage thereunder to lapse, in any such case unless prior to or promptly after such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing and with Best ratings no less favorable than those of the insurance company providing the coverage which is being replaced are obtained;
(g) the Company Subsidiaries shall (i) knowingly take or allow shall use reasonable efforts, and cause each of its subsidiaries to be taken any action which would jeopardize use reasonable efforts, to keep intact their respective business organizations and good will, keep available the treatment services of Parent's acquisition of Company their officers and employees as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codegroup and maintain satisfactory relationships with suppliers and customers and others having business relationships with them.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by the Company. From During the period from the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or except as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses shall and shall cause each of Company and the Company Subsidiaries shall be conducted only to carry on their respective businesses in the usual, regular and ordinary and usual course of business and course, consistent with past practicespractice, and there shall be no material changes use their best efforts to preserve intact their present business organizations, keep available the services of their present advisors, managers, officers and employees and preserve their relationships with customers, suppliers, licensors and others having business dealings with them and continue existing contracts as in effect on the conduct date hereof (for the term provided in such contracts). Without limiting the generality of the operations of foregoing, neither the Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in nor any of the Company Subsidiaries; Subsidiaries will (ii) amend its Certificate of Incorporation except as expressly permitted by this Agreement or By-Laws; or to the extent that Parent shall otherwise consent in writing):
(iiia) split, combine or reclassify any shares of its outstanding capital stock of the Company or declare, set aside or pay any dividend or other distribution payable (whether in cash, stock or propertystock, or redeem property or otherwise acquire any combination thereof) in respect of any shares of its capital stock or shares of the capital stock of the Company, except for dividends paid by any of Company Subsidiary to the Company Subsidiariesor any Company Subsidiary that is, directly or indirectly, wholly owned by the Company;
(c) neither Company nor any of the Company Subsidiaries shall (ib) authorize for issuance, issue or sell any additional shares of, or rights of any kind agree or commit to acquire any shares of, its capital stock of any class issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)) any stock of any class or any other securities or equity equivalents (including, except for without limitation, stock appreciation rights) (a) unissued other than the issuance of Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to Options and Warrants outstanding on the Warrant date of this Agreement and in accordance with their present terms);
(c) the Employee Shares; (ii) acquire, dispose of, transfersell, lease, licenseencumber, mortgage, pledge transfer or encumber dispose of any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in outside the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other which are material liabilities other than in to the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers(whether by asset acquisition, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger stock acquisition or otherwise), other than (i) except pursuant to obligations in effect on the ordinary course of business and consistent with past practice, (ii) date hereof or as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees set forth in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any Section 6.1 of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.Disclosure Schedule;
Appears in 1 contract
Sources: Merger Agreement (Safety 1st Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1 Conduct of Business by the Company Pending the Merger. From the date of this Agreement Prior to the Effective Time, unless Parent shall otherwise agree in writingwriting or as set forth in Section 5.1 of the Company Disclosure Schedule or in Section 2.7, 6.17 or 6.19 hereof, or as otherwise contemplated by this Agreementnecessary or appropriate to satisfy its obligations hereunder, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses shall conduct, and cause each of Company and the Company its Subsidiaries shall be conducted to conduct, its business only in the ordinary and usual course of business and consistent with past practicespractice, and there the Company shall be no material changes in use, and cause each of its Subsidiaries to use, its reasonable best efforts to preserve intact the conduct present business organization, keep available the services of its present officers and key employees, and preserve their existing business relationships. Without limiting the generality of the operations of Company foregoing, unless Parent shall otherwise agree in writing (which agreement will not be unreasonably withheld), or any Company Subsidiary;
(b) Company shall not (i) sell as otherwise contemplated in Sections 2.7, 6.17 or pledge 6.19 hereof or agree as necessary or appropriate to sell satisfy its obligations hereunder, or pledge any stock owned by it as set forth in any Section 5.1 of the Company Subsidiaries; Disclosure Schedule, prior to the Effective Time, the Company shall not, nor shall it permit any of its Subsidiaries to:
(iia) (i) amend its Certificate of Incorporation or Incorporation, as amended, By-Laws; Laws or other organizational documents, (iiiii) split, combine or reclassify any shares of its outstanding capital stock stock, (iii) other than dividends from one Subsidiary to another Subsidiary or to the Company, declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or (iv) directly or indirectly redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of its Subsidiaries;
(b) authorize for issuance, issue, deliver, sell, pledge, dispose of, encumber or grant any Lien on, or authorize or propose the issuance, delivery, sale, pledge, disposition of, encumbrance or grant of any Lien on, any shares of its capital stock or any shares of the capital stock of any of its Subsidiaries, or other voting securities or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such securities or voting securities or any other ownership interest (or interest the value of which is derived by reference to any of the foregoing), or enter into any agreement with respect to any of the foregoing, other than the issuance of Company SubsidiariesCommon Stock upon the exercise of Options outstanding on the date hereof in accordance with their present terms;
(c) neither Company nor acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial 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 (other than the acquisition of assets which, taken together, do not constitute a business and which are of the type currently used in the operations of the business of the Company and its Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practicespractice); provided, however, that the foregoing shall not prohibit the creation of new Subsidiaries of the Company organized to conduct or continue activities otherwise permitted by this Agreement;
(iiid) incur, assume other than (i) dispositions required to be made pursuant to an agreement or prepay any indebtedness contract to which the Company or any other material liabilities other than of its Subsidiaries is a party or by which it is bound as of the date of this Agreement and (ii) dispositions of inventory and excess or obsolete assets in the ordinary course of business and consistent with past practices; (iv) assumepractice, guaranteethe Company shall not, endorse and shall not permit any Subsidiary of the Company to, sell, lease, encumber, license or otherwise become liable dispose of, or responsible agree to sell, lease, encumber, license or otherwise dispose of, any of its assets;
(whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (vi) make any loans, advances or capital contributions to, or investments inin (other than acquisitions permitted by Section 5.1(c)), any other person, other than (x) by the Company or a Subsidiary of the Company to or in the Company or any direct or indirect wholly owned Subsidiary of the Company, (y) pursuant to and in accordance with the terms of any contract or other legal obligation of the Company or any of its Subsidiaries existing at the date of this Agreement, or (z) in the ordinary course of business consistent with past practice in an aggregate amount not in excess of $5,000,000, or (ii) create, incur, assume or suffer to exist any indebtedness, issuances of debt securities, guarantees, loans, advances or other non-equity securities not in existence as of the date of this Agreement except (x) pursuant to the credit facilities, indentures and other arrangements in existence on the date of this Agreement, (y) for short-term borrowings (1) in the ordinary course of business consistent with past practice or (2) the proceeds of which are used to refund existing or maturing indebtedness or fund any acquisition transaction permitted by Section 5.1(c) or (z) intercompany indebtedness between the Company and any of its wholly owned Subsidiaries or between such wholly owned Subsidiaries;
(f) pay, satisfy, discharge or settle any material claim, liabilities or obligations (absolute, accrued, contingent or otherwise), other than in the ordinary course of business and consistent with past practices; practice or pursuant to mandatory terms of any Company Contract in effect on the date hereof;
(vig) authorize modify or amend, or waive any benefit of, any non-competition agreement to which the Company or any of its Subsidiaries is a party;
(h) enter into any new material line of business, or incur or commit to any capital expenditures substantially other than capital expenditures incurred or committed to in the ordinary course of business consistent with past practice and which, together with all such expenditures incurred or committed to during any fiscal year, are not in excess of the amount currently budgeted therefor; respective amounts by category or in the aggregate set forth in the Company's 2000 capital expenditure budget, a true and complete copy of which is set forth in Section 5.1 of the Company Disclosure Schedule;
(viii) voluntarily permit any insurance policy naming the Company or any Subsidiary of the Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; ;
(i) adopt, commit to adopt, enter into, terminate or amend (viiiexcept as may be required by Applicable Law or existing Contracts) enter into any contractemployee plan, agreement, commitment or contract, arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Company Plan for the current or amend in any material respect any existing Plan, future benefit or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf welfare of any of such personspast, whether contingent on consummation of the Merger present or otherwisefuture director, other than officer or employee, (iii) except as required by existing Contracts or in the ordinary course of business and consistent with past practice, increase or commit or agree to increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or employee; provided, however, that, except as required by existing Contracts, (x) no such increase or payment shall be made to or for the benefit of any person listed in Section 5.1 of the Company Disclosure Schedule, and (y) with respect to officers, any such increase shall not exceed 5% of the current compensation or any such officer and such increase shall not be made without consultation with Parent, (iii) other than pursuant to Section 2.7 hereof, take any action to fund or in any other way secure, or to accelerate or otherwise remove restrictions with respect to, the payment of compensation or benefits under any employee plan, agreement, contract, arrangement or other Company Plan, (iv) issue any additional Options, or (v) make or agree to make any contribution, other than regularly scheduled contributions, to any Company Plan, except as required by law;
(i) make any change in its accounting or tax policies or procedures, except as required by Applicable Law or to comply with GAAP, (ii) as may be required under applicable Law change its fiscal year, or the terms of any existing Plan or agreement, and (iii) make any material Tax election, other than in the granting ordinary course of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andbusiness consistent with past practice;
(fl) neither Company nor take any action with knowledge that such action could reasonably be expected to result in any of the Company Subsidiaries conditions to the Merger set forth in Article VII not being satisfied;
(m) enter into, implement, or otherwise become subject to or bound by any new agreement, arrangement, commitment or program which provides for severance, golden parachute, unemployment, stay-pay, change of control or similar payments, or amend any existing agreement, arrangement, commitment or program which provides for such payments;
(n) enter into any Material Contract, except as expressly permitted pursuant to this Agreement; or
(o) authorize any of, or commit, resolve or agree to take any of, the actions prohibited by paragraphs (a) though (n) of this Section 5.1.
Section 5.2 Conduct of Business by Parent Pending the Closing. Except as set forth in Section 5.2 of the Parent Disclosure Schedule or as specifically permitted by any other provision of this Agreement, Parent shall not (iunless required by Applicable Law or stock exchange regulations), between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following, without the prior written consent of the Company, which consent will not be unreasonably withheld:
(a) knowingly take amend or allow otherwise change Parent's Certificate of Incorporation or By-laws or equivalent organizational documents in a manner that adversely affects the rights of holders of Parent Common Stock or amend or otherwise change Merger Sub's Certificate of Incorporation or By-Laws;
(b) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to be taken any action which would jeopardize the treatment of Parent's acquisition capital stock (other than regular quarterly cash dividends having record dates and payment dates in accordance with Parent's historical practices);
(c) make any change in accounting policies or procedures, other than in the ordinary course of Company business consistent with past practice or except as required by GAAP or a pooling of interests for accounting purposesGovernmental Entity; or or
(iid) knowingly take any action with knowledge that would jeopardize qualification such action could reasonably be expected to result in any of the conditions to the Merger as a reorganization within the meaning of section 368(a) of the Codeset forth in Article VII not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (Conagra Inc /De/)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From Except as expressly contemplated by this Agreement, and subject to the fiduciary obligations of its directors and officers, during the period from the date of this Agreement to through the Effective Time, unless each of Parent and the Company shall, and shall otherwise agree cause each of its Subsidiaries to, in writingall material respects, or carry on its business in the ordinary course as currently conducted and, to the extent consistent therewith, use commercially reasonable efforts to preserve intact its current business organizations, keep available the services of its current officers and key employees and preserve its relationships with customers, suppliers and others having business dealings with it. Without limiting the generality of the foregoing, and except as otherwise expressly contemplated by this Agreement, or any Exhibit hereto, or each of Parent and the Company Disclosure Lettershall not, and shall not permit any of its Subsidiaries to, without the prior written consent of the other party:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend dividends on, or make any other distribution payable actual, constructive or deemed distributions in cashrespect of, any of its capital stock, or otherwise make any payments to its stockholders in their capacity as such, (ii) other than in the case of a reverse split of the Parent Common Stock, split, combine or reclassify any of its capital stock or propertyissue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) purchase, redeem or otherwise acquire any shares of its capital stock any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) authorize for issuance, issue, deliver, sell, pledge, dispose of or otherwise encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into, or any rights, warrants or options to acquire any such shares, voting securities, equity equivalent or convertible securities, other than the issuance of shares of capital stock upon the exercise of any stock options outstanding on the date of the Company Subsidiariesthis Agreement;
(c) neither Company nor any acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the Company Subsidiaries shall (i) authorize for issuance, issue assets of or sell any additional shares ofequity in, or rights of by any kind other manner, any business or any corporation, limited liability company, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any shares ofassets for an amount exceeding $50,000 in the aggregate, in the case the Company, or $25,000 in the aggregate, in the case of Parent;
(d) except, in the case of the Company, for any advances under its capital stock secured line of credit, incur any class indebtedness for borrowed money, guarantee any such indebtedness, incur, assume, guarantee, endorse, or prepay any material indebtedness (whether through the issuance or granting of optionsdirectly, warrantsindirectly, commitments, subscriptions, rights to purchase contingently or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or other investments in, any other person, other than (A) in amounts not to Company exceed $50,000 in the aggregate, in the case of the Company, or $25,000 in the aggregate, in the case of Parent; and (B) indebtedness, loans, advances, capital contributions and investments between it and any of its wholly-owned Subsidiaries and other than or between any of such wholly-owned Subsidiaries, in each case in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially practices and not in excess any event to exceed $50,000 in the aggregate, in the case of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company Company, or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than $25,000 in the ordinary course aggregate, in the case of businessParent; or
(e) authorize, recommend, propose or (viii) announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement with respect to do any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Sources: Merger Agreement (Planetcad Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement AeroAstro and each Principal Shareholder covenants and agrees that, prior to the Effective Time, unless Parent shall Radyne otherwise agree agrees in writing, writing or as otherwise expressly contemplated or permitted by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective The businesses of Company and the Company Subsidiaries AeroAstro shall be conducted only in the ordinary course, on an arm’s length basis and usual course in accordance in all material respects with all applicable laws, rules and regulations and past custom and practice; AeroAstro shall maintain its facilities in good operating condition, ordinary wear and tear excepted; and AeroAstro shall use its reasonable best efforts to preserve intact its business organization and goodwill, keep available the services of its officers and employees as a group and maintain satisfactory relationships with suppliers, distributors, customers and others having business and consistent relationships with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiaryit;
(b) Company AeroAstro shall not not, directly or indirectly, do or permit to occur any of the following: (i) sell issue, sell, pledge, dispose of or pledge or agree to sell or pledge encumber any stock owned by it in additional shares of any of its capital stock or any of its assets, except in the Company Subsidiariesordinary course of business; (ii) grant, reprice, revise, or accelerate the vesting of any options, warrants, conversion privileges or rights of any kind to acquire any shares of any of its capital stock; (iii) amend or propose to amend its Certificate Articles of Incorporation or By-LawsBylaws; or (iiiiv) split, combine or reclassify any outstanding shares of its outstanding capital stock AeroAstro Common Stock, or declare, set aside or pay any dividend or other distribution payable in cash, stock or propertystock, or redeem property or otherwise with respect to shares of AeroAstro Common Stock; (v) other than as set forth in Schedule 5.1, redeem, purchase or acquire or offer to acquire any shares of its capital stock AeroAstro Common Stock or shares other securities of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind AeroAstro except from former AeroAstro employees pursuant to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practicesrepurchase rights; (vi) authorize capital expenditures substantially in excess acquire (by merger, exchange, consolidation, acquisition of the amount currently budgeted thereforstock or assets or otherwise) any corporation, partnership, joint venture or other business organization or division or material assets thereof; (vii) permit incur any insurance policy naming Company indebtedness for borrowed money or issue any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in debt securities, except the ordinary course borrowing of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) working capital in the ordinary course of business and consistent with past practice, or grant any mortgages, liens or security interests; (viii) make any investments other than short-term United States Treasury obligations or short-term certificates of deposit of a commercial bank or trust company; (ix) enter into or propose to enter into, or modify or propose to modify, any agreement, arrangement or understanding with respect to any of the matters set forth in this Section 5.1(b); or (x) fail to maintain any existing insurance coverage in all material respects of all types in effect as of the date hereof;
(c) AeroAstro shall not, directly or indirectly, enter into or modify any contract, agreement or understanding, written or oral, fixed or contingent, individually or in the aggregate as to any third party and its affiliates or subsidiaries as a group, that involves consideration or performance of AeroAstro of a value exceeding $25,000 or a term exceeding one year;
(d) Except as required by law, rule or regulation, AeroAstro shall not (i) enter into or modify any employment, severance or similar agreements or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, any officers or directors or consultants or (ii) other than as may be required under applicable Law or set forth on Schedule 5.1, take any action with respect to the terms grant of any existing Plan bonuses, salary increases, severance or termination pay or with respect to any increase of benefits payable in effect on the date hereof;
(e) Other than as set forth on Schedule 5.1, AeroAstro shall not adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, trust, fund or group arrangement for the benefit or welfare of any employees or any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, and (iii) trust, fund or arrangements for the granting benefit or welfare of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andany director;
(f) neither Company Neither AeroAstro nor any Principal Shareholder, officer, director, employee, agent or representative thereof shall, for a period expiring on the earlier of the Company Subsidiaries shall (i) knowingly take or allow the termination of this Agreement pursuant to be taken any action which would jeopardize the treatment terms of Parent's acquisition of Company as a pooling of interests for accounting purposes; Article 9 herein or (ii) knowingly August 2, 2007, solicit, negotiate, consider or encourage the possible sale to any other person or entity of all or any portion of the business or of the assets of AeroAstro, whether by merger, sale of stock, sale, license or lease of assets, or otherwise; nor shall they provide any confidential information to any person or entity. AeroAstro will promptly notify Radyne if any of them is approached by any person or entity interested in acquiring or investing in AeroAstro, and will provide Radyne with the name of the person and the details of such inquiry or proposal;
(g) Neither AeroAstro nor any Principal Shareholder shall take any action that would jeopardize qualification render, or that reasonably may be expected to render, any representation or warranty made by it in this Agreement untrue at, or at any time prior to, the Effective Time. AeroAstro and each Principal Shareholder agrees to promptly notify Radyne (i) of any emergency or other change in the normal course of AeroAstro’s business or of any governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated); (ii) the occurrence or failure to occur of any event, which occurrence or failure would be likely to cause any representation or warranty on AeroAstro’s or any Principal Shareholder’s part contained in this Agreement to be untrue or inaccurate in any material respect at, or at any time prior to, the Effective Time; and (iii) any failure of AeroAstro or any Principal Shareholder to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; and
(h) Without the consent of Radyne, AeroAstro shall not make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to AeroAstro, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the Merger as a reorganization within limitation period applicable to any Tax claim or assessment relating to AeroAstro, or take any other similar action relating to the meaning filing of section 368(a) any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the Codeeffect of increasing the Tax liability of AeroAstro for any period ending after the Effective Time or decreasing any Tax attribute of AeroAstro existing on the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Radyne Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by the Company. From During the period from the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or except as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses shall and shall cause each of Company and the Company Subsidiaries shall be conducted only to carry on their respective businesses in the usual, regular and ordinary and usual course of business and course, consistent with past practicespractice, and there shall be no material changes use their best efforts to preserve intact their present business organizations, keep available the services of their present advisors, managers, officers and employees and preserve their relationships with customers, suppliers, licensors and others having business dealings with them and continue existing contracts as in effect on the conduct date hereof (for the term provided in such contracts). Without limiting the generality of the operations of foregoing, neither the Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in nor any of the Company Subsidiaries; Subsidiaries will (ii) amend its Certificate of Incorporation except as expressly permitted by this Agreement or By-Laws; or to the extent that Parent shall otherwise consent in writing):
(iiia) split, combine or reclassify any shares of its outstanding capital stock of the Company or declare, set aside or pay any dividend or other distribution payable (whether in cash, stock or propertystock, or redeem property or otherwise acquire any combination thereof) in respect of any shares of its capital stock or shares of the capital stock of the Company, except for dividends paid by any of Company Subsidiary to the Company Subsidiariesor any Company Subsidiary that is, directly or indirectly, wholly owned by the Company;
(c) neither Company nor any of the Company Subsidiaries shall (ib) authorize for issuance, issue or sell any additional shares of, or rights of any kind agree or commit to acquire any shares of, its capital stock of any class issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)) any stock of any class or any other securities or equity equivalents (including, except for without limitation, stock appreciation rights) (a) unissued other than the issuance of Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to Options and Warrants outstanding on the Warrant date of this Agreement and in accordance with their present terms);
(c) the Employee Shares; (ii) acquire, dispose of, transfersell, lease, licenseencumber, mortgage, pledge transfer or encumber dispose of any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in outside the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness which are material to the Company or any other material liabilities other than in of the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible Company Subsidiaries (whether directlyby asset acquisition, contingently stock acquisition or otherwise), except pursuant to obligations in effect on the date hereof or as set forth in Section 6.1 of the Company Disclosure Schedule;
(d) except up to $10,000,000 pursuant to credit facilities in existence on the date hereof, incur any amount of indebtedness for the obligations of borrowed money, guarantee any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) indebtedness, issue or sell debt securities, make any loans, advances or capital contributions tocontributions, mortgage, pledge or investments inotherwise encumber any material assets, create or suffer any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated material lien thereupon other than in the ordinary course of business; or (viii) enter into any contract, agreementexcept, commitment or arrangement with respect in each case, pursuant to any of credit facilities in existence on the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiariesdate hereof;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable except pursuant to any of its officersmandatory payments under any credit facilities in existence on the date hereof, directors pay, discharge or employeessatisfy any claims, enter into liabilities or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.obligations
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From ICEWEB and DSSC agree on their own behalf and on behalf of their subsidiaries that, except as may be agreed to by the parties hereto or may be permitted by this Agreement, during the period from the date of this Agreement to and continuing until the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of Company ICEWEB and the Company Subsidiaries DSSC and their subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company ICEWEB, DSSC and their subsidiaries shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiariesits subsidiaries; (ii) amend its their Certificate of Incorporation or By-LawsBylaws; or (iii) split, combine combine, or reclassify any shares of its their outstanding capital stock or declare, set aside aside, or pay any dividend or other distribution payable in cash, stock or propertystock, or redeem property in respect of their capital stock, or directly or indirectly redeem, purchase, or otherwise acquire any shares of its their capital stock or other securities or shares of the capital stock or other securities of any of the Company Subsidiariestheir subsidiaries;
(c) neither Company nor any of the Company Subsidiaries ICEWEB, DSSC and their subsidiaries shall not (i) authorize for issuance, issue issue, sell, pledge, dispose of, encumber, deliver, or sell agree or commit to issue, sell, pledge, or deliver any additional shares of, or rights of any kind to acquire any shares of, its their capital stock of any class or exchangeable into shares of stock of any class or any voting debt (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase purchase, or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares that each Company may issue shares required to be issued pursuant upon exercise of existing stock options, warrants, or similar plans, or under other contractual commitments previously made, which options, warrants, plans, or commitments have been disclosed in writing to the Warrant Agreement and (c) the Employee Sharesother party; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge pledge, or encumber any fixed or other substantial assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume assume, or prepay any indebtedness material indebtedness, liability, or obligation or any other material liabilities or issue any debt securities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse endorse, or otherwise become liable or responsible (whether directly, contingently contingently, or otherwise) for the obligations of any other person (other than a Company Subsidiary subsidiary) in a material amount other than in the ordinary course of business and consistent with past practices; (v) make any material loans, advances advances, or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and subsidiaries, other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any fail to maintain adequate insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of businessconsistent with past practices for their businesses and properties; or (viiivii) enter into any contract, agreement, commitment commitment, or arrangement with respect to any of the foregoing;
(d) Company ICEWEB and DSSC shall use their reasonable efforts efforts, consistent with prudent business practice, to preserve intact the business organization of the Company and the Company Subsidiariestheir subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it ICEWEB and the Company SubsidiariesDSSC;
(e) neither Company nor any of the Company Subsidiaries ICEWEB and DSSC shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken or fail to take any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; act or (ii) knowingly take any action that omission would jeopardize qualification of the Merger as a reorganization "reorganization" within the meaning of section Section 368(a) of the Code; and
(f) ICEWEB and DSSC shall use reasonable efforts to prevent any representation or warranty of ICEWEB and of DSSC herein from becoming untrue or incorrect in any material respect.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.01 Conduct of Business by the Company Pending the Merger. From The Company agrees that, between the date of this Agreement to and the Effective Time, unless Parent shall otherwise agree in writing, or except as otherwise expressly contemplated by this AgreementAgreement or as set forth in Section 5.01 of the Disclosure Schedule, without the prior written consent of Parent and Merger Sub (which consent shall not be unreasonably withheld, conditioned or any Exhibit heretodelayed), or the Company Disclosure Letter:
(a) the respective businesses of the Company and the Company Subsidiaries shall be conducted only in all material respects in the ordinary and usual course of business and in a manner consistent with past practices, and there shall be no material changes in practice. Without limiting the conduct generality of the operations foregoing, except as contemplated by any other provision of this Agreement or as set forth in Section 5.01 of the Disclosure Schedule, the Company agrees that neither it nor any Company Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do any of the following, except with the prior written consent of Parent and Merger Sub (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or otherwise change the certificate of incorporation or bylaws of the Company, or the Company Subsidiaries;
(b) issue, deliver, sell, transfer, dispose of, pledge or encumber any shares of its capital stock or equity interests, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares of capital stock or equity interests, voting securities or convertible securities, other than the issuance of Company Stock Options consistent with past practices or shares of Company Common Stock issuable pursuant to Company Stock Options or warrants;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or equity interests, except for dividends by any wholly-owned Company Subsidiary to the Company or any other wholly-owned Company Subsidiary;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock or equity interests of the Company or any Company Subsidiary;
(be) Company shall not (i) sell adopt or pledge enter into a plan of complete or agree to sell partial liquidation, dissolution, restructuring, recapitalization or pledge any stock owned by it in any other reorganization of the Company Subsidiaries; or any Company Subsidiary (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of than the capital stock of any of the Company SubsidiariesMerger);
(cf) neither Company nor make any change to its methods of the Company Subsidiaries shall accounting in effect as of June 30, 2007, except as required by changes in GAAP;
(ig) authorize for issuancedirectly or indirectly acquire (x) by merging or consolidating with, issue or sell any additional shares by purchasing assets of, or rights by any other manner, any person or division, business or equity interest of any kind to acquire person or (y) any shares ofasset or assets that, its capital stock individually, has a purchase price in excess of any class (whether through $500,000 or, in the issuance or granting aggregate, have a purchase price in excess of options, warrants, commitments, subscriptions, rights to purchase or otherwise)$1,000,000, except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Optionsnew capital expenditures, (b) Shares to which shall be issued pursuant subject to the Warrant Agreement limitations of clause (j) below, and except for purchases of inventory, components, raw materials, supplies or other assets in the ordinary course of business;
(ch) the Employee Shares; (iix) acquire, dispose of, transfersell, lease, license, mortgage, pledge sell and leaseback or otherwise encumber or subject to any fixed Lien or otherwise dispose of any of its properties or other assets or any interests therein (including securitizations), except for sales of inventory and used equipment in the ordinary course of business consistent with past practice or (y) enter into, modify or amend any lease of real property, except for any renewals of existing leases in the ordinary course of business;
(i) incur any indebtedness for borrowed money (except for drawings under the Credit Agreement in an aggregate amount not to exceed $2,000,000 at any time outstanding) or guarantee any such indebtedness of another person, issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities of the Company or any Company Subsidiary, guarantee any debt securities of another person or enter into any "keep well" or other Contract to maintain any financial statement condition of another person;
(j) make any new capital expenditure or capital expenditures which in the aggregate are in excess of $5,000,000 100,000, other than capital expenditures made pursuant to contractual obligations set forth on Section 5.01(j) of the Disclosure Schedule;
(k) waive, release, assign, settle, pay, discharge, satisfy or compromise any claims, liabilities, obligations or any litigation or arbitration (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the waiver, release, assignment, settlement, payment, discharge, satisfaction or compromise in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities disclosed, reflected or reserved against in the most recent financial statements (or, if applicable, the notes thereto) of the Company included in the SEC Reports (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the ordinary course of business consistent with past practice;
(l) (i) (x) enter into, modify or amend any Contract that is material to the Company or any Company Subsidiary, including but not limited to, licensing agreements, co-promotion agreements or agreements with any Affiliates of the Company ("Material Contracts") or (y) enter into, modify or amend in any one manner materially adverse to the Company or a series any Company Subsidiary any other Contract, except in the case of related transactions clause (y), for renewals on substantially similar terms of existing Contracts or replacements of existing Contracts with new counterparties on substantially similar terms to the existing Contract being replaced, or (ii) (x) terminate or waive, release or assign any rights under any Material Contract, or (y) terminate or waive, release or assign any material rights under any other Contract, which in the case of either clause (i)(y) or (ii)(y) if so entered into, modified, amended, terminated, waived, released or assigned could reasonably be expected to adversely affect in any material respect the Company;
(m) except as set forth in Section 3.10 of the Disclosure Schedule, (i) increase in any manner the compensation or benefits of any of its directors or executive officers, (ii) increase in any manner the compensation or benefits of any of its employees who are not executive officers other than in the ordinary course of business and consistent with past practices; practice, (iii) incurgrant any severance or termination pay not provided for under any Plan or agreement in effect prior to the date hereof, assume (iv) make any loans or prepay advances to any indebtedness or any other material liabilities of its employees other than in the ordinary course respect of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than travel expenses in the ordinary course of business; , or (viiiv) establish or become obligated under any collective bargaining agreement;
(n) sell, transfer or license to any Person or otherwise amend or modify, in any material respect, any rights to the Intellectual Property of the Company or any Company Subsidiary (other than implied licenses in connection with sales of Company or Company Subsidiary products or in connection with non-disclosure agreements entered into in the ordinary course of business); or
(o) announce an intention, enter into any contract, agreement, formal or informal agreement or otherwise make a commitment or arrangement with respect offer, to do any of the foregoing;
(d) . Nothing set forth in this Section 5.01 shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or any of the Company Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall use reasonable efforts to preserve intact exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over the business organization and operations of the Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 7.1 Conduct of Business by Parent and by the Company Pending the Merger. From the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or Except as otherwise contemplated by this Agreement, after the date hereof and prior to the Closing Date or any Exhibit heretoearlier termination of this Agreement, or each of Parent and the Company Disclosure Lettershall, and shall cause its respective subsidiaries to:
(a) the conduct their respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell except as necessary to consummate the transactions contemplated hereby, amend or pledge propose to amend their respective charters or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; by-laws, (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its their outstanding capital stock stock, or (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or propertyotherwise, except for the payment of dividends or redeem or otherwise acquire any shares of its capital stock or shares distributions by a wholly-owned subsidiary of the capital stock of any of the Company SubsidiariesCompany;
(c) neither Company nor any except in connection with existing contractual obligations, not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of the Company Subsidiaries shall (i) authorize for issuanceor otherwise cause to become outstanding, issue or sell any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock;
(whether through d) not (i) except relating to the issuance satisfaction of the Magellan Loan, incur or granting become contingently liable with respect to any material indebtedness for borrowed money other than (x) borrowings in the ordinary course of optionsbusiness, warrantsor (y) borrowings to refinance or extend existing indebtedness, commitmentsthe terms of which shall be reasonably satisfactory to Parent or the Company, subscriptions(ii) redeem, rights purchase, acquire or offer to purchase or otherwise)acquire any shares of its capital stock or any options, except warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Optionsits capital stock, (biii) Shares take any action which would jeopardize the treatment of the Merger as a pooling of interests under APB 16, (iv) take or fail to be issued pursuant take any action which action or failure would cause the Company or the Seller to recognize gain or loss for federal income tax purposes as a result of the Warrant Agreement and consummation of the Merger, (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge v)make any acquisition of any assets or encumber any businesses other than expenditures for fixed or other capital assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; which, in such cases of $50,000 or more, shall be on terms reasonably acceptable to Parent or the Company, as the case may be, (iiivi) incursell, assume pledge, dispose of or prepay encumber any indebtedness assets or any other material liabilities businesses other than sales in the ordinary course of business and consistent with past practices; (iv) assumewhich, guaranteein such cases involving $50,000 or more, endorse shall be on terms reasonably acceptable to Parent or otherwise become liable or responsible (whether directlythe Company, contingently or otherwise) for as the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions tocase may be, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(de) Company shall use all reasonable efforts to preserve intact the their respective business organization of Company organizations and the Company Subsidiariesgoodwill, to keep available the services of its and their respective present officers and key employees, and to preserve the goodwill of those and business relationships with customers and others having business relationships with it them and not engage in any action, directly or indirectly, with the Company Subsidiariesintent to adversely impact the transactions contemplated by this Agreement;
(ef) neither Company nor any confer on a regular and frequent basis with one or more representatives of each to report operational matters of materiality and the Company Subsidiaries shall make any change in the compensation payable or to become payable to any general status of its officers, directors or employees, ongoing operations;
(g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar agreementarrangements or agreements with any directors, adopt any new Plan officers or amend in any material respect any existing Plankey employees, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) except in the ordinary course of business and consistent with past practice;
(h) not adopt, (ii) as may be required under applicable Law enter into or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the terms benefit or welfare of any existing Plan employee or agreementretiree, and (iii) the granting of retention bonuses except as required to certain officers and employees comply with changes in an aggregate amount not to exceed $2,000,000applicable law; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company maintain with adequately capitalized insurance companies insurance coverage for its assets and its businesses in such amounts and against such risks and losses as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeare consistent with past practice.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 5.01. From Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement to and the Effective Time, unless Parent Buyer, Johnson or Liberty shall otherwise agree have consented, neither the Company no▇ ▇▇▇ ▇ompany Subsidiary shall, except as set forth in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or Section 5.01 of the Company Disclosure LetterSchedule:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of conduct its business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions manner other than in the ordinary course of business and consistent with past practices; practice;
(iiib) incuramend or propose to amend its certificate of incorporation or by- laws;
(i) authorize for issuance, assume issue, grant, sell, pledge, redeem or prepay acquire for value any indebtedness of its or their securities, including options, warrants, commitments, stock appreciation rights, subscriptions, rights to purchase or otherwise (other than the issuance of equity securities upon the conversion of outstanding convertible securities or in connection with any dividend reinvestment plan or any other material liabilities other than in the ordinary course of business and Benefit Plan with an employee stock fund or employee stock ownership plan feature, consistent with past practices; applicable securities laws, or the exercise of options or warrants outstanding as of the date of this Agreement and in accordance with the terms of such options or warrants in effect on the date of this Agreement) or (ivii) assumesell, guarantee, endorse pledge or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations dispose of any other person other than a Company Subsidiary in the ordinary course material assets, except for sales of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than assets in the ordinary course of business; ;
(d) declare, set aside, make or (viii) enter into pay any contractdividend or other distribution, agreementpayable in cash, commitment stock, property, or arrangement otherwise, with respect to any of its capital stock, except dividends declared and paid by a wholly-owned Company Subsidiary only to the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company SubsidiariesCompany, to keep available the services or subdivide, reclassify, recapitalize, split, combine or exchange any of its and their present officers and key employees, and to preserve the goodwill shares of those having business relationships with it and the Company Subsidiariescapital stock;
(e) neither Company nor incur, assume or become obligated with respect to any material amount of the Company Subsidiaries shall indebtedness for borrowed money or make any change loans or advances, except borrowings under existing bank lines of credit in the ordinary course of business;
(f) increase the compensation payable or to become payable to its executive officers or employees, except for increases in the ordinary course of business in accordance with past practices, or grant any severance or termination pay to or enter into any employment or severance agreement with any of its officersdirector or executive officer, directors or employeesestablish, adopt, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect or take action to accelerate any existing Planrights or benefits under any collective bargaining agreement or any employee benefit plan, agreement or make policy; provided, however, that the Company shall be permitted to (i) amend the ESPP to provide that the first Investment Date (as defined in the ESPP) scheduled to occur following the Effective Time will be accelerated so that such Investment Date will occur immediately prior to the Effective Time, (ii) terminate the ESPP immediately following such Investment Date and simultaneous with the Effective Time and refund any loans unused payroll deductions then held by the ESPP to the appropriate ESPP participants, and (iii) amend or modify the Company's incentive plans set forth in Section 5.01(f) of the Company Disclosure Schedule in such manner as is reasonably necessary to preserve the rights of the participants in such plans, including, without limitation, amending such incentive plans to provide for any pay-out of awards under such plans prior to the Effective Time; provided, that Buyer shall have consented in writing to any of its officerssuch amendment or modification referred to in clauses (i), directors or employees or make (ii) to (iii) above, such consent not to be unreasonably withheld.
(g) take any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwiseaction, other than (i) reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, including tax accounting policies and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andprocedures);
(fh) neither Company nor acquire by merger or consolidation, or by purchase of assets, or by any of the Company Subsidiaries shall other manner, any material business;
(i) knowingly take mortgage or allow otherwise encumber or subject to be taken any action which would jeopardize the treatment lien any of Parent's acquisition of Company its properties or assets, except for liens in connection with indebtedness incurred as a pooling of interests for accounting purposes; or permitted by clause (iie) knowingly above;
(j) take any action that would jeopardize qualification would, or could reasonably be expected to result in, any of its representations and warranties set forth in this Agreement being untrue or in any of the conditions to the Merger set forth in Article VII not being satisfied;
(k) make any tax election or settle or compromise any income tax liability material to the Company and the Company Subsidiaries, taken as a reorganization within whole;
(l) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the meaning payment, discharge or satisfaction in the ordinary course of section 368(abusiness of liabilities reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the CodeCompany included in the Company SEC Reports, or incurred in the ordinary course of business consistent with past practice;
(m) settle or compromise any pending or threatened suit, action or claim relating to the transactions contemplated hereby; or
(n) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement The Shareholders and Acquired Entities covenant and agree that, prior to the Effective Timeeffective time of the Transactions, unless Parent Cintas shall otherwise agree in writing, which consent shall not be unreasonably withheld, or as otherwise expressly permitted or contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses business of Company and the Company Subsidiaries Acquired Entities shall be conducted in all material respects only in the ordinary and usual course of business and consistent with past practices, practice and there shall be no material changes in the conduct none of the operations Acquired Entities shall (i) make any material change in its operations, or (ii) purchase or sell any significant properties or assets outside of Company or any Company Subsidiarythe ordinary course of business;
(b) Company none of the Acquired Entities shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or units of partnership or (ii) except for dividends in amounts sufficient to enable the Shareholders to pay income taxes in respect of earnings of the Acquired Entities through the Closing Date (which dividend amounts shall be computed in a manner consistent with past practices) declare, set aside or pay any dividend or other distribution payable or make any payment in cash, stock or property, or redeem or otherwise acquire property in respect of any shares of its capital stock or shares units of the capital stock of any of the Company Subsidiariespartnership;
(c) neither Company nor any none of the Company Subsidiaries Acquired Entities shall (i) authorize for issuanceamend its respective Articles or Certificate of Incorporation, By-laws or other organizational documents, (ii) except in connection with the exercise of outstanding options under the Phantom Stock Plan, issue or sell any additional shares or units of, or rights of any kind to acquire any shares or units of or to receive any payment based on the value of, its capital stock of stock, its partnership interests or any class (whether through the issuance or granting of optionssecurities convertible into such securities, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay incur any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than except in the ordinary course of business; , (iv) acquire, directly or indirectly, by redemption or otherwise, any shares of its capital stock or partnership interests, (v) cancel or decrease any existing insurance coverage, or (viiivi) enter into modify any existing contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company the Acquired Entities shall use reasonable their reasonably best efforts to preserve intact the their business organization of Company and the Company Subsidiariesorganization, to keep available the services of its and their present current officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiariesthem;
(e) neither Company nor none of the Acquired Entities shall (i) except for capital stock and partnership interests issuable upon the exercise of outstanding options under the Phantom Stock Plan, increase in any manner the compensation of any of its officers or key employees or increase the compensation of other employees except in the ordinary course of business, (ii) pay or agree to pay any pension, retirement allowance or other employee benefit not required by any existing plan, agreement or arrangement to any director, officer or key employee, whether past or present, (iii) except as required by the terms of any existing plan, agreement or arrangement, adopt or commit itself to or enter into any additional pension, profit-sharing, bonus, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or to any employment or consulting agreement with or for the benefit of any director, officer or employee, whether past or present, (iv) amend any such plan, agreement or arrangement or (v) pay any bonus to any officer of the Company;
(f) the Acquired Entities shall not make any capital expenditures or commitments for capital expenditures which individually exceed $100,000 or which in the aggregate exceed $400,000;
(g) make any additional commitments or contracts with customers unless such commitments or contracts are with the same quality of customer on substantially the same terms as are in existence with any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, Acquired Entities' current customers;
(h) other than (i) in the ordinary course of business and consistent with past practice, none of the Acquired Entities shall waive any rights of substantial value or make any payment, direct or indirect, of any material liability of such Acquired Entity before the same comes due in accordance with its terms;
(iii) other than in the ordinary course of business, none of the Acquired Entities shall borrow any money or lease, mortgage, encumber or otherwise grant any interest in any of its assets or properties, except for liens for current taxes not yet due and liens or encumbrances that are not substantial in amount and do not materially detract from the value or impair the use of the property subject thereto;
(j) the Acquired Entities shall, at all times up to and including the effective time of the Merger, maintain its existing insurance coverage of all types in effect or procure substantially similar substitute insurance policies with financially sound and reputable insurance companies in at least such amounts and against such risks as may are currently covered by such policies;
(k) cause all deferred compensation liabilities of any Shareholder to be required under applicable Law or discharged in accordance with the terms of the underlying obligations prior to the Closing Date;
(l) duly and timely file all federal, state, local and foreign tax returns and pay all taxes required to be paid to any existing Plan or agreement, such taxing authority unless otherwise accrued for on the Balance Sheet and (iii) the granting of retention bonuses all sales taxes will continue to certain officers be collected and employees in an aggregate amount not to exceed $2,000,000remitted as required by applicable law; and
(fm) neither Company nor none of the Acquired Entities shall agree, in writing or otherwise, to take any of the Company Subsidiaries shall actions prohibited by the foregoing clauses (ia) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or through (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codel).
Appears in 1 contract
Sources: Merger Agreement (Cintas Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER6.1. From Conduct of Business by the date of this Agreement Company Pending the Merger. Prior ----------------------------------------------------- to the Effective TimeDate, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of The Company and the Company Subsidiaries shall be conducted only carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, and shall use its reasonable efforts to preserve intact its present business organization, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it. The Company shall: (A) maintain insurance coverage on its own property and assets and its books, accounts and records in the usual course of business and manner consistent with past prior practices; (B) comply in all material respects with all laws, ordinances and there shall be no regulations of Governmental Entities applicable to the Company; (C) maintain and keep its properties and equipment in good repair, working order and condition, ordinary wear and tear excepted; and (D) perform in all material changes in the conduct respects its obligations under all contracts and commitments to which it is a party or by which any of the operations of Company or any Company Subsidiary;them is bound.
(b) Except as required by this Merger Agreement, the Company shall not not: (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (iiA) amend its Certificate Articles of Incorporation or By-Lawslaws; or (iiiB) split, combine or reclassify any shares of its outstanding 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 capital stock of the Company, or declare, set aside or pay any dividend or other distribution payable in cash, stock or propertyproperty or extend any credit to any officer, director or redeem stockholder; or (C) directly or indirectly redeem, purchase or otherwise acquire or agree to redeem, purchase or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;Common Stock.
(c) neither Company nor any of Except as required by this Merger Agreement, the Company Subsidiaries shall not (iA) authorize for issuanceissue, issue deliver or sell or agree to issue, deliver or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance class, any indebtedness or granting of options, warrants, commitments, subscriptionsany option, rights or warrants to purchase acquire, or otherwise)securities convertible into, except for (a) unissued Shares reserved for issuance upon shares of capital stock other than issuances of Company Common Stock pursuant to the exercise of Employee Stock Options, (b) Shares to be issued pursuant to Company Options outstanding on the Warrant Agreement and (c) the Employee Sharesdate hereof; (iiB) acquire, lease or dispose ofor agree to acquire, transfer, lease, license, mortgage, pledge lease or encumber dispose of any fixed capital assets or any other assets involving expenditures or proceeds in excess an amount, individually or in the aggregate, greater than $50,000; (C) assume, incur or guarantee additional indebtedness; (D) enter into any contract or commitment of $5,000,000 any kind material, individually or in any one or a series of related transactions the aggregate, to the Company other than in the ordinary course of business and consistent with past practicespractice, or permit or suffer to be canceled any contract material, individually or in the aggregate, to the Company; (iiiE) incurencumber or grant a security interest in any material asset; (F) acquire or agree to acquire by merging or consolidating with, assume or prepay by purchasing a substantial equity interest in, or by any indebtedness other manner, any business or any corporation, partnership, association or other material liabilities other than in the ordinary course of business and consistent with past practicesorganization or division thereof; (ivG) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of decrease any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company cash reserve or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated bulk reserve other than in the ordinary course of business; (H) make any change in the underwriting, reserves or claims adjustment practices which would have a Company Material Adverse Effect; or (viiiI) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;.
(d) The Company shall use reasonable efforts not, except as required to preserve intact the business organization of Company comply with applicable law and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
except as provided in Section 3.6 hereof or elsewhere in this Merger Agreement: (eA) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employeesadopt, enter into into, terminate or amend any employmentbonus, profit sharing, compensation, severance, termination termination, stock option, pension, retirement, deferred compensation, employment or other similar Company Benefit Plan, agreement, adopt trust, fund or other arrangement for the benefit or welfare of any new Plan director, officer or amend current or former employee; (B) increase in any material respect manner the compensation or fringe benefits of any officer or employee; (C) pay any benefit not provided under any existing Planplan or arrangement heretofore disclosed to Parent; (D) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Benefit Plan (including, without limitation, the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or make the removal of existing restrictions in any loans benefit plans or agreements or awards made thereunder); (E) take any action to fund or in any other way secure the payment of its officerscompensation or benefits under any employee plan, directors agreement, contract or employees arrangement or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, Company Benefit Plan other than (i) in the ordinary course of business consistent with past practice or as required thereunder, or (F) adopt, enter into, amend or terminate any contract, agreement, commitment or arrangement to do any of the foregoing.
(e) The Company shall not take any action with respect to accounting policies or procedures other than reasonable and usual actions in the ordinary course and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER4.1 Conduct of Business by the Company Pending the Merger. From the date of this Agreement The Company ----------------------------------------------------- covenants and agrees that, prior to the Effective Time, unless the Parent shall otherwise agree in writing, writing or as otherwise expressly contemplated by this Agreement, Merger Agreement or any Exhibit hereto, or disclosed in Section 4.1 of the Company Disclosure Letter:
(a) the respective businesses of the Company and the Company its Subsidiaries shall be conducted only in in, and the Company and its Subsidiaries shall not take any action except in, the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) except as contemplated herein with respect to the Dividend Access Shares and the one share of Series B Preferred Stock outstanding, the Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company its Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine combine, subdivide or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or propertyotherwise, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company its Subsidiaries;
(c) neither Company nor any of except as contemplated herein with respect to the Dividend Access Shares, the Company shall not, and shall cause each of its Subsidiaries shall not to (i) authorize for issuance, issue issue, pledge, encumber or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, convertible securities, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock OptionsOptions issued and outstanding prior to the date hereof and listed on Section 3.4 of the Disclosure Letter in accordance with their existing terms, (b) Shares to as such Stock Options may be issued accelerated pursuant to the Warrant Agreement and (c) the Employee Sharestheir existing terms; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness indebtedness, Lien or any other material liabilities (actual or contingent) other than in the ordinary course of business and consistent with past practices, provided that the Company may borrow money for general working capital purposes in the ordinary course of business consistent with past practice under the Credit Agreement; (iv) assume, guaranteeendorse (other than in the ordinary course of business consistent with past practices), endorse guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person (other than a Company Subsidiary in the ordinary course of business and consistent with past practicesSubsidiary); (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and its Subsidiaries, or otherwise enter into any Material Contract other than in the ordinary course of business and consistent with past practicespractices (it being understood and agreed that the Company may renew its directors' and officers' liability insurance policy when required; provided, however, the Company shall consult with the Parent prior to renewing such insurance policy (such renewed policy, the "Renewed Policy") to explore possibilities of reducing any losses or expenses (including additional premiums) that may be incurred by the Company as a result of the early termination of the Renewed Policy subsequent to the consummation of the Merger); (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit make any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee loans to be cancelled or terminated employees, other than advances in the ordinary course of business; or (viiivii) enter into any contract, agreement, commitment or arrangement with respect fail to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and maintain adequate insurance consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, practices for their businesses and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.properties;
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. From the date of this Agreement Prior to the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise expressly contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses Company shall conduct, and cause each of Company and the Company its Subsidiaries shall be conducted to conduct, its business only in the ordinary and usual course of business and consistent with past practicespractice, and there the Company shall be no material changes in use, and cause each of its Subsidiaries to use, its reasonable efforts to preserve intact the conduct present business organization, keep available the services of its present officers and key employees, and preserve the operations goodwill of Company or any Company Subsidiarythose having business relationships with it;
(b) the Company shall not not, nor shall it permit any of its Subsidiaries to, (i) sell amend its charter, by laws or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; other organizational documents, (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or stock, (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or (iv) directly or indirectly redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company its Subsidiaries;
(c) neither except as provided in Schedule 6.1(c), the Company shall not, nor shall it permit any of the Company its Subsidiaries shall to, (i) authorize for issuance, issue or sell or agree to issue or sell any additional shares of, or rights of any kind Rights to acquire or which are convertible into any shares of, its capital stock or shares of the capital stock of any class of its Subsidiaries (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for the issuance of shares of Company Common Stock upon the exercise of Employee Company Stock Options, (b) Shares to be issued pursuant to Options outstanding on the Warrant date of this Agreement and (c) the Employee Sharesissuance of options in connection with the hiring of sales representatives consistent with past practices; (ii) acquiremerge or consolidate with another entity; (iii) acquire or purchase an equity interest in or a substantial portion of the assets of another corpora tion, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed partnership or other business organization or otherwise acquire any assets in excess of $5,000,000 in any one or a series of related transactions other than in outside the ordinary and usual course of business and consistent with past practicespractice or otherwise enter into any material contract, commitment or transaction outside the ordinary and usual course of business consistent with past practice; (iiiiv) sell, lease, license, waive, release, transfer, encumber or otherwise dispose of any of its assets outside the ordinary and usual course of business and consistent with past practice; (v) incur, assume or prepay any material indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practicespractice; (ivvi) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary of the Company, in each case in the ordinary course of business and consistent with past practicespractice; (vvii) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in of the ordinary course of business and consistent with past practicesCompany; (viviii) authorize or make capital expenditures substantially in excess of the amount amounts currently budgeted therefor; (viiix) permit any insurance policy naming the Company or any Subsidiary of the Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viiix) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) the Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiariesnot, to keep available the services of nor shall it permit its and their present officers and key employeesSubsidiaries to, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) adopt, enter into, terminate or amend (except as may be required by Applicable Law) any Company Plan or other arrangement for the current or future benefit or welfare of any director, officer or current or former employee, (ii) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or employee (except for normal increases in salaried compensation in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) take any action to fund or in any other way secure, or to accelerate or otherwise remove restrictions with respect to, the granting payment of retention bonuses compensation or benefits under any employee plan, agreement, contract, arrangement or other Company Plan (including the Company Stock Options);
(e) the Company shall not, nor shall it permit its Subsidiaries to, take any action with respect to, or make any material change in, its accounting or tax policies or procedures, except as required by law or to certain officers and employees in an aggregate amount not to exceed $2,000,000; andcomply with GAAP;
(f) neither Company nor any of the Company Subsidiaries shall not (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of the Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that which would jeopardize qualification of the Merger as a reorganization within the meaning of section Section 368(a) of the Code.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 5.01. From Conduct of Business by the Company Pending the Merger. The ------- -- -------- -- --- ------- ------- --- ------ Company covenants and agrees that, between the date of this Agreement to and the earlier of the termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in writing, or the businesses of the Company shall be conducted only in, and the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use commercially reasonable efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and to preserve the current relationships of the Company with customers, suppliers and other persons with which the Company has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this AgreementAgreement or as set forth on Schedule 5.01 of the -------- ---- Company Disclosure Schedule, the Company shall not, between the date of this Agreement and the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do, or propose to do, any Exhibit hereto, or of the Company Disclosure Letterfollowing without the prior written consent of Parent:
(a) amend or otherwise change the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Company's Certificate of Incorporation or By-Laws; laws;
(b) except for the issuance of shares of Company Stock in connection with the exercise of Company Options and Company Warrants outstanding as of the date of this Agreement or upon the conversion of Convertible Securities outstanding as of the date of this Agreement, issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of Common Stock or Preferred Stock, (ii) any Company Options, Convertible Securities or Company Warrants, or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares ofother ownership interest of the Company (including, without limitation, any phantom interest);
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock of any class or other securities;
(whether through the issuance d) reclassify, combine, split, subdivide or granting of optionsredeem, warrants, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire, except for directly or indirectly, any of its capital stock or other securities;
(ae) unissued Shares reserved for issuance upon the exercise (i) acquire (including, without limitation, by merger, consolidation, or acquisition of Employee Stock Optionsstock or assets) any corporation, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Sharespartnership, other business organization or any division thereof or any material amount of assets; (ii) acquireincur any indebtedness for borrowed money or issue any debt securities, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course Second Bridge Loan, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of business and consistent with past practicesany person, or make any loans or advances; (iii) incurenter into, assume amend or prepay terminate any indebtedness contract or any other agreement material liabilities other than in to the ordinary course business, results of business and consistent with past practicesoperations or financial condition of the Company; (iv) assume, guarantee, endorse authorize any capital expenditure; or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into or amend any contract, agreement, commitment or arrangement with respect to any of the foregoingmatter set forth in this subsection (e);
(df) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in increase the compensation payable or to become payable to any of its officers, directors consultants or employees, or grant, pay or agree to pay any bonus, severance or termination pay to, or enter into any employment or severance agreement with any director, officer, consultant or other employee of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, severancetermination, termination severance or other similar plan, agreement, adopt trust, fund, policy or arrangement for the benefit of any new Plan director, officer, consultant or amend employee;
(g) take any action with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable);
(h) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in any material respect any existing Plan, or make any loans to any the ordinary course of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf business and consistent with past practice and without violation of any of such personsthe Company's obligations pursuant to this Article V, whether contingent of liabilities reflected or reserved against in the Unaudited Balance Sheet (and as set forth on consummation Schedules 3.11(a) and 3.32 of the Merger Company Disclosure Schedule), or otherwise, other than (i) subsequently incurred in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and;
(fi) neither increase its payables and/or liabilities (other than payment of normal, base salaries, wages, benefits and other operating expenses necessary to operate the business of the Company nor in the ordinary course of business and consistent with past practice) over current levels;
(j) commence a lawsuit other than in such cases where the Company in good faith determines that the failure to commence a suit would result in the material impairment of a valuable asset or a valuable aspect of its business, provided that the Company consults with Parent prior to filing such suit;
(k) enter into, amend or terminate any real property leases or personal property leases; or
(l) sell, lease, license or otherwise dispose of or encumber any of the Company Subsidiaries shall Company's properties or assets, except for sales of assets (i) knowingly take other than capital assets or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification intellectual property of the Merger as a reorganization within Company) in the meaning ordinary course of section 368(abusiness, consistent with past practices, that are not material, individually or in the aggregate, to the Company or its business.
(m) purchase, lease, license or otherwise acquire any properties or assets, except for purchases of assets (other than capital assets or intellectual property) in the Codeordinary course of business, consistent with past practices, that are not material, individually or in the aggregate, to the Company or its business and that do not involve an expenditure of more than $5,000 individually or $25,000 in the aggregate.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. Conduct of Business by Metamor and its Subsidiaries Pending the Merger.
(a) From and after the date of hereof until the Closing Date, except as contemplated by this Agreement to the Effective Time, or unless Parent PSINet shall otherwise agree in writing, or Metamor covenants and agrees that it shall, and shall cause its Subsidiaries to: (i) carry on their respective businesses in the usual, regular and ordinary course in substantially the same manner as otherwise heretofore conducted and to use reasonable efforts to conduct their businesses in a manner consistent with the budgets and plans heretofore made available to PSINet, including all capital expenditure plans, (ii) use all reasonable efforts to preserve intact their present business organizations, keep available the services of their employees and consultants and preserve their relationships and goodwill with customers, suppliers, licensors, licensees, distributors and others having business dealings with them, and (iii) use commercially reasonable efforts to protect the Intellectual Property Rights to the end that its and its Subsidiaries' goodwill and on-going businesses shall not be impaired in any material respect as of the Closing Date. Without limiting the generality of the foregoing, except as expressly contemplated by this AgreementAgreement or as set forth on EXHIBIT 6.1 or unless PSINet shall otherwise agree in writing, or any Exhibit heretoprior to the Closing, or the Company Disclosure LetterMetamor shall not and shall not permit its Subsidiaries to:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell declare, set aside, or pledge pay any dividends on, or agree to sell or pledge make any stock owned by it other distributions in respect of, any of the Company Subsidiariesits capital stock, other than dividends and distributions by any direct or indirect Subsidiary of Metamor to its parent; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or, other than pursuant to the exercise or declareconversion of Metamor Options, set aside or pay any dividend Xpedior Stock Options, Metamor Notes or other distribution payable convertible securities outstanding on the date of this Agreement, issue or authorize the issuance of any other securities in cashrespect of, stock in lieu of or property, or redeem or otherwise acquire any in substitution for shares of its capital stock stock; purchase, redeem or otherwise acquire, other than pursuant to the exercise or conversion of Metamor Options, Xpedior Stock Options, Metamor Notes or other convertible securities outstanding on the date of this Agreement, any shares of the capital stock of Metamor or any of the Company its Subsidiaries or any other equity securities thereof or any rights, warrants, or options to acquire any such shares or other securities other than purchases, redemptions or acquisitions of equity securities of wholly-owned Subsidiaries of Metamor or rights, warrants or options to acquire such securities;
(ii) grant, award or enter into any compensation or change of control arrangement with any employee of Metamor or any of its Subsidiaries;
(ciii) neither Company nor any except for issuances of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of a Subsidiary of Metamor to Metamor or a wholly-owned Subsidiary of Metamor, issue, deliver, sell, pledge, dispose of or otherwise encumber any class shares of Metamor's or any of its Subsidiaries' capital stock including any Metamor Options, Xpedior Stock Options, Metamor Notes or other convertible securities, any other voting securities of Metamor or its Subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such shares or voting securities (whether through other than the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance Metamor Common Stock upon the exercise of Employee Stock Metamor Options, Metamor Notes or other convertible securities outstanding on the date of this Agreement or the issuance of Xpedior Common Stock upon the exercise or conversion of Xpedior Stock Options or other Xpedior convertible securities outstanding on the date of this Agreement) or amend the terms of any such securities, rights, warrants or options or take any action to accelerate the vesting thereof;
(biv) Shares amend the certificate of incorporation or by-laws of Metamor or any of its Subsidiaries;
(v) acquire or agree to be issued pursuant to acquire by merging or consolidating with, or by purchasing a substantial portion of the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose assets of, transferor by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, or any assets that are material, individually or in the aggregate, to Metamor or any of its Subsidiaries, except, in any such case, in the ordinary course of business, and except transactions between a wholly-owned Subsidiary of Metamor and Metamor or another wholly-owned Subsidiary of Metamor;
(vi) subject to a lien, charge or encumbrance or sell, lease, licenselicense or otherwise dispose of any of its material properties or assets or any Intellectual Property Rights, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than except in the ordinary course of business and consistent with past practices; practices and except transactions between a wholly-owned Subsidiary of Metamor and Metamor or another wholly-owned Subsidiary of Metamor, or adopt a plan of complete or partial liquidation;
(iiivii) incur, assume incur or prepay modify any indebtedness for borrowed money or guarantee any such indebtedness of another Person; issue or sell any debt securities of Metamor or any other material liabilities of its Subsidiaries; guarantee any debt securities of another Person (other than indebtedness to, guarantees of, or issuances or sales to Metamor or a wholly-owned Subsidiary of Metamor); or enter into any "keep well" or other agreement to maintain any financial condition of another Person, except, in any such case, for borrowings or other transactions incurred in the ordinary 28 -27- course of business under existing credit facilities including the repayment of existing indebtedness pursuant to the terms thereof;
(viii) except in the ordinary course of business and consistent with past practices; (iv) assumebusiness, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other personPerson, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company Metamor or any Company direct or indirect Subsidiary as a beneficiary of Metamor or a loss payee to be cancelled settle or terminated other than in the ordinary course of business; compromise any material claims or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoinglitigation;
(dix) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiariesalter, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable amend or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend delay in any material respect any existing Plan, or make any loans to any the implementation of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements plans for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andcapital expenditures;
(fx) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly omit to take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(aresult in Metamor owning less than eighty percent (80%) of the Codeoutstanding Xpedior Common Stock; or
(xi) take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect; or
(xii) authorize any of, or commit or agree to take any of, the foregoing actions.
(b) Metamor shall promptly provide PSINet with copies of all filings made by it or its Subsidiaries with any Governmental Entity in connection with this Agreement and the Transactions contemplated hereby.
(c) Metamor shall, before filing a material amended Tax return, changing any material method of Tax accounting, or settling or compromising any material litigation, claim, income Tax or other liability of Metamor or any of its Subsidiaries, consult with PSINet and its advisors as to the positions and elections that will be taken or made with respect to such matter and shall not enter into any such settlement or compromise without the consent of PSINet.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or Except as otherwise contemplated by this Agreement, or any Exhibit heretorequired by law, or disclosed (subject to Section 8.16 hereof) in the Company Disclosure LetterSchedule, after the date hereof and prior to the Effective Time, without Parent's consent (which shall not be unreasonably withheld), the Company shall, and shall cause its subsidiaries to:
(a) the conduct their respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell amend or pledge propose to amend their respective certificates of incorporation or agree to sell by-laws or pledge any stock owned by it in any of the Company Subsidiaries; equivalent constitutional documents, (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its their outstanding 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 or (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or propertyotherwise, except for the payment of dividends or redeem distributions to the Company or otherwise acquire any shares of its capital stock or shares of the capital stock of any a subsidiary of the Company Subsidiariesby a subsidiary of the Company and except for the declaration and payment of regularly scheduled cash dividends consistent in amount with past practices;
(c) neither Company nor any not issue, sell, pledge, dispose of the Company Subsidiaries shall (i) authorize for issuanceor encumber, issue or sell agree to issue, sell, pledge, dispose of or encumber, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that the Company may issue shares of capital stock of the Company upon exercise of Company Stock Options outstanding on the date hereof and previously disclosed to Parent in writing;
(d) not (i) incur or become contingently liable with respect to any indebtedness (whether through evidenced by a note or other instrument, pursuant to a financing lease, sale-leaseback transaction or otherwise) that would be required to be reflected as indebtedness on a consolidated balance sheet of the issuance Company prepared in accordance with GAAP, other than borrowings in the ordinary course of business under the existing credit facilities of the Company or granting any of optionsits subsidiaries, warrantsand not permit such indebtedness to exceed $60,000,000 (with the incurrence of any such indebtedness in excess of $60,000,000 being deemed to be a failure in a material respect to comply with a material condition for purposes of clause (d) of Exhibit A), commitments(ii) redeem, subscriptionspurchase, rights acquire or offer to purchase or otherwise)acquire directly or indirectly any shares of its capital stock or any options, except warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for (a) unissued Shares reserved for issuance upon its capital stock other than in connection with the exercise of Employee outstanding Company Stock Options pursuant to the terms of the Company Option Plans and the relevant written agreements evidencing the grant of Company Stock Options, (biii) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge make any acquisition of any assets or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions businesses other than for current assets in the ordinary course of business and consistent with past practices; expenditures for fixed or capital assets permitted by Section 5.01(m) or (iiiiv) incursell, assume pledge, dispose of , lease, exchange, transfer or prepay encumber any indebtedness material assets or any other material liabilities businesses other than (A) sales of business or assets disclosed in the Company Disclosure Schedule, (B) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, (C) sales or dispositions of businesses or assets as may be required by applicable law, (D) sales of inventory and other current assets, or (E) sales of idle facilities and related assets.
(e) use reasonable best efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them other than as contemplated by the terms of this Agreement;
(f) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment, collective bargaining agreement or other similar arrangements or agreements except pursuant to (i) previously existing contractual arrangements or policies that have been previously disclosed to Parent or (ii) employment agreements entered into with a non-officer having aggregate annual compensation of less than $75,000 who is hired or promoted by the Company or one of its subsidiaries after the date hereof in the ordinary course of business and consistent with past practices; renewals of collective bargaining agreements expiring before the Effective Time on terms which are not materially different than the expiring agreements;
(ivg) assume, guarantee, endorse or otherwise become liable or responsible not (whether directly, contingently or otherwisei) for increase the obligations salary of any other person other than a Company Subsidiary except for increases to non-executive officer employees in the ordinary course of business and consistent with past practicespractice, not to exceed 3% for any particular employee, or increase or establish other monetary compensation of any person, including without limitation any bonus compensation, (ii) grant any severance or termination pay to any officer, director, employee or consultant except pursuant to previously existing written contractual obligations or existing written policies of the Company, or (iii) hire or terminate or amend the terms of the employment of any executive officer or other employee who has or would have annual compensation of more than $60,000;
(h) not adopt, enter into or amend or increase or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under any Company Plan;
(i) not make, change or revoke any Tax election unless required by law or make any agreement or settlement with any taxing authority regarding any amount of Taxes or which is reasonably expected to increase the obligations of the Company or the Surviving Corporation to pay Taxes in the future; or
(vj) not change their respective accounting principles unless required by GAAP or the SEC;
(k) not compromise, settle, grant any waiver or release relating to or otherwise adjust any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including any litigation, except for any such compromise, settlement, waiver, release or adjustment in the ordinary course of business consistent with past practice and involving a payment by the Company or any of its subsidiaries not in excess of $150,000 in the aggregate following prior notice to and consultation with Parent;
(l) not (A) guarantee any indebtedness of another person for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, or (B) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any subsidiary of the Company Subsidiary as a beneficiary or a loss payee to be cancelled officers and employees of the Company or terminated other than any of its subsidiaries for travel, business or relocation expenses in the ordinary course of business; ;
(m) not make any capital expenditures beyond those required for current projects in progress or previously approved by the Company Board of Directors and contained in the Company Disclosure Schedule, and additional capital projects after January 31, 2001 not exceeding $250,000 per month in the aggregate or $100,000 per project.
(viiin) not enter into or amend in any material respect any Material Contract or enter into any contract, contract or agreement, commitment written or oral, with any affiliate or associate or relative of the Company or relative of any officer or director of the Company, or make any payment to or for the benefit of, directly or indirectly, any of the foregoing except as otherwise permitted under this Section 5.01;
(o) not authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of the Company or any of its subsidiaries; or
(p) not amend its Certificate of Incorporation or take any other action which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a Stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Merger Sub or permit any Stockholder to acquire securities of the Company on a basis not available to Parent in the event that Parent were to acquire securities of the Company;
(q) comply in all material respects with its covenants and other obligations under the contracts and agreements referred to in Section 4.15(a); and
(r) not enter into an agreement or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of IBID's Business Pending the Merger. From IBID agrees on its own behalf and on behalf of its subsidiaries that, during the period from the date of this Agreement to and continuing until the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) except as set forth in Schedule 6.1, the respective businesses of Company IBID and the Company Subsidiaries its subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company IBID and its subsidiaries shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiariesits subsidiaries; (ii) amend its Certificate Articles of Incorporation or By-LawsBylaws; or (iii) split, combine combine, or reclassify any shares of its outstanding capital stock or declare, set aside aside, or pay any dividend or other distribution payable in cash, stock or propertystock, or redeem property in respect of its capital stock, or directly or indirectly redeem, purchase, or otherwise acquire any shares of its capital stock or other securities or shares of the capital stock or other securities of any of the Company Subsidiariesits subsidiaries;
(c) neither Company nor any of the Company Subsidiaries IBID and its subsidiaries shall not (i) authorize for issuance, issue issue, sell, pledge, dispose of, encumber, deliver, or sell agree or commit to issue, sell, pledge, or deliver any additional shares (including any shares issuable upon exercise of warrants, stock options or other contractual obligations) of, or rights of any kind to acquire any shares of, its capital stock of any class or exchangeable into shares of stock of any class or any Voting Debt (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase purchase, or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge pledge, or encumber any fixed or other substantial assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume assume, or prepay any indebtedness material indebtedness, liability, or obligation or any other material liabilities or issue any debt securities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse endorse, or otherwise become liable or responsible (whether directly, contingently contingently, or otherwise) for the obligations of any other person (other than a Company Subsidiary subsidiary) in a material amount other than in the ordinary course of business and consistent with past practices; (v) make any material loans, advances advances, or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and subsidiaries, other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any fail to maintain adequate insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of businessconsistent with past practices for their businesses and properties; or (viiivii) enter into any contract, agreement, commitment commitment, or arrangement with respect to any of the foregoing;
(d) Company IBID shall use reasonable efforts to preserve intact the business organization of Company IBID and the Company Subsidiariesits subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and their respective subsidiaries; provided, however, that no breach of this covenant shall be deemed to have occurred if a failure to comply with this Section 6.1(d) occurs as a result of any matter arising out of the Company Subsidiariestransactions contemplated by this Agreement;
(e) neither Company nor IBID and its subsidiaries shall not knowingly take or allow to be taken or fail to take any action which act or omission would jeopardize qualification of the Company Subsidiaries Merger as a "reorganization" within the meaning of Section 368(a) of the Code; and
(f) IBID and its subsidiaries shall make use all reasonable efforts to prevent any change representation or warranty of IBID herein from becoming untrue or incorrect in any material respect.
6.2 Conduct of CCI's Business Pending the Merger. CCI agrees on its own behalf and on behalf of its subsidiaries that, during the period from the date of this Agreement and continuing until the Effective Time:
(a) the respective businesses of CCI and its subsidiaries shall be conducted only in the compensation payable ordinary and usual course of business and consistent with past practices;
(b) CCI and its subsidiaries shall not (i) sell or pledge or agree to become payable to sell or pledge any stock owned by it in any of its officerssubsidiaries; (ii) amend its Articles of Incorporation or Bylaws; or (iii) split, directors combine, or employeesreclassify any shares of its outstanding capital stock or declare, enter into set aside, or amend pay any employment, severance, termination dividend or other similar agreementdistribution payable in cash, adopt any new Plan or amend in any material respect any existing Planstock, or make property in respect of its capital stock, or directly or indirectly redeem, purchase, or otherwise acquire any loans to shares of its capital stock or other securities or shares of the capital stock or other securities of any of its officers, directors or employees or make any changes in subsidiaries;
(c) CCI and its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than subsidiaries shall not (i) authorize for issuance, issue, sell, pledge, dispose of, encumber, deliver, or agree or commit to issue, sell, pledge, or deliver any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class or exchangeable into shares of stock of any class or any Voting Debt (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase, or otherwise), except that CCI may issue Shares required to be issued upon exercise of existing stock options, warrants, or similar plans, or under other contractual commitments previously made, which options, warrants, plans, or commitments have been disclosed in writing to CCI in the CCI Schedule; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge, or encumber any fixed or other substantial assets other than in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and practices; (iii) incur, assume, or prepay any material indebtedness, liability, or obligation or any other material liabilities or issue any debt securities other than in the granting ordinary course of retention bonuses business and consistent with past practices; (iv) assume, guarantee, endorse, or otherwise become liable or responsible (whether directly, contingently, or otherwise) for the obligations any other person (other than a subsidiary) in a material amount other than in the ordinary course of business and consistent with past practices; (v) make any material loans, advances, or capital contributions to, or investments in, any other person, other than to certain officers subsidiaries, other than in the ordinary course of business and employees in an aggregate amount not consistent with past practices; (vi) fail to exceed $2,000,000maintain adequate insurance consistent with past practices for their businesses and properties; and
or (fvii) neither Company nor enter into any contract, agreement, commitment, or arrangement with respect to any of the Company Subsidiaries foregoing;
(d) CCI shall preserve intact the business organization of CCI and its subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and their respective subsidiaries; provided, however, that no breach of this covenant shall be deemed to have occurred if a failure to comply with this Section 6.2(d) occurs as a result of any matter arising out of the transactions contemplated by this Agreement;
(ie) CCI and its subsidiaries shall not knowingly take or allow to be taken or fail to take any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; act or (ii) knowingly take any action that omission would jeopardize qualification of the Merger as a reorganization "reorganization" within the meaning of section Section 368(a) of the Code; and
(f) CCI and its subsidiaries shall use all reasonable efforts to prevent any representation or warranty of CCI herein from becoming untrue or incorrect in any material respect.
Appears in 1 contract
Sources: Merger Agreement (Care Concepts Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1 Conduct of Business By Metrocall and Arch Pending the Merger. From Except as otherwise contemplated by this Agreement and the date Ancillary Agreements or disclosed in the Disclosure Schedules, during the period from the execution and delivery of this Agreement to the Effective TimeTime or termination of this Agreement in accordance with its terms (the "Interim Period"), unless Parent each of the Companies shall, and shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Lettercause each of their Subsidiaries to:
(a) the conduct their respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practicespractice for the fiscal year ended December 31, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary2003;
(b) Company shall not (i) sell except as necessary or pledge appropriate to comply with applicable laws or agree to sell or pledge any stock owned by it in any regulations, including SEC regulations and requirements of the Company Subsidiaries; NASDAQ, amend or propose to amend their respective certificates of incorporation or bylaws (or comparable organizational documents), (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its their outstanding capital stock stock, or (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or propertyotherwise, except for the payment of dividends or redeem or otherwise acquire any shares distributions to a Company by a wholly-owned Subsidiary of its capital stock or shares of the capital stock of any of the Company Subsidiariessuch Company;
(c) neither Company nor any of the Company Subsidiaries shall except for (i) authorize for issuanceissuances of Metrocall Common Stock and Metrocall Preferred Stock required pursuant to the Metrocall Plan of Reorganization and (ii) issuances of Arch Common Stock required pursuant to the Arch Plan of Reorganization, issue not issue, sell, pledge or sell dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its their capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase any debt or otherwise)equity securities convertible into or exchangeable for such capital stock, except for (a) unissued Shares reserved for issuance that each Company may issue shares upon the exercise of Employee Stock Optionsoutstanding options and warrants, (b) Shares to be issued or pursuant to existing agreements, in effect on the Warrant Agreement and date hereof;
(cd) not accelerate, amend or change the Employee Shares; period of exercisability or vesting of options, restricted stock or similar awards under any employee stock incentive plan or authorize cash payments in exchange for any options granted under any of such plans except as required by the terms of such plans or any related agreements in effect as of the date hereof;
(iie) acquirenot (i) assume, dispose ofincur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings under the existing credit facilities of each Company, transferif applicable (the "Existing Credit Facilities"), lease, license, mortgage, pledge or encumber any fixed up to the existing borrowing limit on the date hereof or other assets in excess of $5,000,000 in any one or a series of related transactions other than borrowings in the ordinary course of business and consistent with past practices; practice or (B) financing arrangements in connection with the payment of the Cash Election Price on terms that are approved by Metrocall and Arch (in each case such approval not to be unreasonably withheld or delayed), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock other than pursuant to the terms thereof or, in the case of equity granted to employees of a Company or their respective Subsidiaries, pursuant to an employee stock incentive plan of such Company, (iii) incurtake or fail to take any action which action or failure to take action would cause either Company or their stockholders (except to the extent that any stockholders receive cash as part of the Metrocall Merger Consideration or in lieu of fractional shares) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as an exchange described in Section 351 of the Code, assume (iv) make any material acquisition of any assets or prepay any indebtedness or any other material liabilities businesses other than expenditures for current, fixed or capital assets in the ordinary course of business and consistent with past practices; (iv) assumepractice, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make sell, pledge, dispose of or encumber any loans, advances material assets or capital contributions tobusinesses, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing, other than sales or dispositions of inventory or obsolete (or otherwise worthless) assets by either Company or its Subsidiaries in the ordinary course of business consistent with past practice;
(df) Company shall use all reasonable efforts to preserve intact the their respective business organization of Company organizations and the Company Subsidiariesgoodwill, to keep available the services of its and their respective present officers and key employees, and to preserve the goodwill of those and business relationships with customers and others having business relationships with it them and not engage in any action, directly or indirectly, that is intended, or would reasonably be expected to adversely impact the Company SubsidiariesTransactions;
(eg) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, not enter into or amend any employment, severance, change in control, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, provided, however, that if approved by the Arch Board, Arch may adopt a retention program for its key employees other than those individuals identified in Section A of Schedule 5.1 (who shall not be entitled to participate in any such program) providing for cash payments in an aggregate amount not to exceed the amount set forth in Section B of Schedule 5.1;
(h) not increase the salary or monetary compensation of any directors, executive officers or employees whose current annual base salary is in excess of $200,000, except (A) for increases in the ordinary course of business consistent with past practice, (B) pursuant to contractual arrangements in effect on December 31, 2003 or (C) in connection with the assumption by such employee of material new or additional responsibilities;
(i) not establish, adopt, enter into or materially amend any collective bargaining agreement;
(j) except as expressly permitted under the proviso in Section 5.1(g), adopt not adopt, enter into or amend any new Plan pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any existing Planbonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or make other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwiseretirees generally, other than (i) in the ordinary course of business consistent with past practice or as required pursuant to an existing contractual relationship;
(k) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice;
(l) not make, change or revoke any material tax election or make any material agreement or settlement regarding taxes with any taxing authority;
(m) use commercially reasonable efforts to: (A) comply in all material respects with the Communications Act, the FCC Regulations and the Telecommunications Laws, (iiB) as may preserve and retain all of its FCC Licenses, (C) file in a timely manner all fees, reports, applications, or other materials required to be required filed under applicable Law or the terms of any existing Plan or agreementCommunications Act, the FCC Regulations and the Telecommunications Laws, and (iiiD) comply in all material respects with the granting Exchange Act;
(n) not enter into any agreement or arrangement that limits or otherwise restricts its or any of retention bonuses to certain officers and employees its Subsidiaries or any of their respective affiliates or any successor thereto from engaging or competing in any line of business or in any geographic area which agreements or arrangements would, individually or in the aggregate, have an aggregate amount Arch Material Adverse Effect or Metrocall Material Adverse Effect, as applicable;
(o) not to exceed $2,000,000waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration which would, individually or in the aggregate, have an Arch Material Adverse Effect or Metrocall Material Adverse Effect, as applicable; and
(fp) neither Company nor not grant or credit any additional "Units", as such term is defined in Arch's Management Long-Term Incentive Plan, or make any similar award under Arch's Management Long-Term Incentive Plan or accelerate, amend or change the period of exercisability or vesting of issued and outstanding "Units" as of the Company Subsidiaries shall (i) knowingly take date hereof or allow to be taken any action which would jeopardize authorize cash payments in exchange therefor, except as required by the treatment terms of ParentArch's acquisition of Company Management Long-Term Incentive Plan in effect as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codedate hereof.
Appears in 1 contract
Sources: Merger Agreement (Arch Wireless Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 5.01. From Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement to and the Effective Time, except as set forth in Section 5.01 of the Company Disclosure Schedule or as otherwise expressly provided for in this Agreement, unless Parent shall otherwise agree (which agreement shall not be unreasonably withheld or delayed) in writing, the Company Businesses shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent in all material respects with past practice; and the Company shall use its best efforts to preserve intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, distributors, suppliers, licensers, licensees, contractors and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, or any Exhibit hereto, or as set forth in Section 5.01 of the Company Disclosure LetterSchedule, neither the Company nor any of the Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company amend or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend otherwise change its Certificate of Incorporation or By-Laws; laws or equivalent organizational documents;
(iiib) splitissue, combine sell, pledge, dispose of, grant or reclassify encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any class of the Company Subsidiaries;
(c) neither Company nor or any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares ofSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares ofof such capital stock, its capital stock or any other ownership interest (including, without limitation, any phantom interest), of the Company or any class Subsidiary or (whether through ii) any assets of the issuance Company or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)any Subsidiary, except for (a) unissued Shares reserved sales in the ordinary course of business and in a manner consistent in all material respects with past practice and other asset sales for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and consideration or having a fair market value aggregating not more than $1,000,000;
(c) other than regularly scheduled periodic cash dividends in amounts not in excess of those previously declared, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that a United States Subsidiary may, after consultation with Parent, declare and pay a dividend to the Employee SharesCompany;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(e) except as contemplated by the UNC Merger Agreement, (i) acquire (including, without limitation, by merger, consolidation or acquisition of stock or assets) any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets; (ii) acquireenter into any contract or agreement that, dispose ofif entered into prior to the date of this Agreement, transferwould have been required to be disclosed as a Material Contract, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business, consistent in all material respects with past practice; or (iii) enter into or amend any Material Contract with respect to any matter set forth in this subsection (e);
(i) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business and consistent in all material respects with past practicespractice and in an amount not in excess of $250,000; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (viii) authorize capital expenditures substantially which are, in the aggregate, in excess of $1,000,000 for the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary and the Subsidiaries taken as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of businesswhole; or (viiiiii) enter into or amend any contract, agreement, commitment or arrangement with respect to any of the foregoingmatter set forth in this subsection (f);
(dg) Company shall use reasonable efforts to preserve intact increase (except in the ordinary course of business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships consistent in all material respects with it and the Company Subsidiaries;
(epast practice) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to its officers or employees generally or to any employee with an annual salary in excess of its officers$100,000, directors or employeesgrant any bonus, severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, severancetermination, termination severance or other similar plan, agreement, adopt any new Plan trust, fund, policy or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements arrangement for or on behalf the benefit of any director, officer or employee; provide, however, that the Company and the executive officers identified in Exhibit 5.01(g) hereto may enter into agreements in a form substantially identical to, and in the amounts identified on, Exhibit 5.01(g) hereto;
(h) acquire, sell, lease or dispose of such persons, whether contingent on consummation of the Merger any Real Estate or otherwiseother material assets, other than sales or leases of fixed assets (other than Real Estate) or sales of inventory, in each case, in the ordinary course of business;
(i) accelerate the collection of accounts receivable, delay the payment of accounts payable or take any action with respect to credit, collection and fiscal policies and practices, other than in the ordinary course of business and in a manner consistent with past practice with respect to accounting policies or practices;
(j) make any material Tax election or settle or compromise any material federal, state, local or foreign income Tax liability;
(k) take any action that would or is reasonably likely to result in any of the covenants and agreements set forth in this Article V or in Article VI or any of the conditions set forth in Article VII not being satisfied as of the Closing Date;
(l) take any action, other than reasonable and usual actions in the ordinary course of business and consistent in all material respects with past practice, with respect to accounting policies or procedures (ii) as may be required under applicable Law or including, without limitation, procedures with respect to the terms payment of any existing Plan or agreement, accounts payable and (iii) the granting collection of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andaccounts receivable);
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (iim) knowingly take any action that would jeopardize qualification of could reasonably be expected to prevent the Merger as from constituting a reorganization within the meaning of section transaction qualifying under Section 368(a) of the Code; or
(n) except for the payment of reasonable professional fees relating to the Merger, the UNC Merger, or otherwise and reasonable fees to financial advisors (which financial advisory fees have heretofore been disclosed or are otherwise acceptable to Parent), pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unassorted, contingent or otherwise) in an amount in excess of $500,000 in the aggregate, other than the payment, discharge or satisfaction, in the ordinary course of business and consistent in all material respects with past practice, of liabilities reflected or reserved against in the Company 1996 Balance Sheet or subsequently incurred in the ordinary course of business and consistent in all material respects with past practice.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business Pending the Merger. From STI agrees on its own behalf and on behalf of its subsidiaries that, during the period from the date of this Agreement to and continuing until the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of Company STI and the Company Subsidiaries its subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company STI and its subsidiaries shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiariesits subsidiaries; (ii) amend its Certificate Articles of Incorporation or By-LawsBylaws; or (iii) split, combine combine, or reclassify any shares of its outstanding capital stock or declare, set aside aside, or pay any dividend or other distribution payable in cash, stock or propertystock, or redeem property in respect of its capital stock, or directly or indirectly redeem, purchase, or otherwise acquire any shares of its capital stock or other securities or shares of the capital stock or other securities of any of the Company Subsidiariesits subsidiaries;
(c) neither Company nor any of the Company Subsidiaries STI and its subsidiaries shall not (i) authorize for issuance, issue issue, sell, pledge, dispose of, encumber, deliver, or sell agree or commit to issue, sell, pledge, or deliver any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class or exchangeable into shares of stock of any class or any Voting Debt (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase purchase, or otherwise), except for (a) unissued that STI may issue Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares required to be issued pursuant upon exercise of existing stock options, warrants, or similar plans, which options, warrants, plans, or commitments have been disclosed in writing to the Warrant Agreement and (c) the Employee SharesAUG in Schedule 6.1(c); (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge pledge, or encumber any fixed or other substantial assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume assume, or prepay any indebtedness indebtedness, liability, or obligation or any other material liabilities or issue any debt securities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse endorse, or otherwise become liable or responsible (whether directly, contingently contingently, or otherwise) for the obligations of any other person (other than a Company Subsidiary in the ordinary course of business and consistent with past practicessubsidiary); (v) make any loans, advances advances, or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and subsidiaries, other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any fail to maintain adequate insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of businessconsistent with past practices for their businesses and properties; or (viiivii) enter into any contract, agreement, commitment commitment, or arrangement with respect to any of the foregoing;
(d) Company STI shall use reasonable efforts to preserve intact the business organization of Company STI and the Company Subsidiariesits subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and their respective subsidiaries; provided, however, that no breach of this covenant shall be deemed to have occurred if a failure to comply with this Section 6.1(d) occurs as a result of any matter arising out of the Company Subsidiariestransactions contemplated by this Agreement;
(e) neither Company nor any of the Company Subsidiaries STI and its subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken or fail to take any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; act or (ii) knowingly take any action that omission would jeopardize qualification of the Merger as a reorganization "reorganization" within the meaning of section Section 368(a) of the Code; and
(f) STI and its subsidiaries shall use all reasonable efforts to prevent any representation or warranty of STI herein from becoming untrue or incorrect in any material respect.
Appears in 1 contract
Sources: Merger Agreement (Aug Corp)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 5.1 Conduct of Business of the Company Pending the Merger. From the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or Except as otherwise contemplated by this Agreement, or any Exhibit hereto, during the period from the date hereof to the earlier of termination of this Agreement or the Effective Time, the Company Disclosure Letteragrees to conduct its business and that of its subsidiaries only in the ordinary course of business consistent with past practice and to use all reasonable efforts consistent with past practices and policies to preserve intact its present business organization (including the services of its existing employees) and preserve its relationships with customers, suppliers and others having business dealings with it, to the end that its goodwill and ongoing business shall be unimpaired at the Effective Date. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, neither the Company nor any of its subsidiaries will, without the prior written consent of the Purchaser:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company amend or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree propose to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(cb) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue issue, sell, deliver or agree or commit to issue, sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, any stock options or stock appreciation rights), except (x) shares of Company Common Stock issuable upon conversion of the Outstanding Debentures (at a conversion rate of one share of Company Common Stock for every $25.00 of Outstanding Debentures) and (ay) unissued Shares reserved for issuance shares of Company Common Stock issuable upon the exercise of Employee Stock Optionsthe Company Outstanding Options or (ii) amend any of the terms of any such securities or agreements outstanding as of the date hereof, (b) Shares to be issued pursuant to the Warrant Agreement and except as specifically contemplated by this Agreement;
(c) the Employee Shares; (ii) acquiresplit, dispose ofcombine or reclassify any shares of its capital stock, transferdeclare, lease, license, mortgage, pledge set aside or encumber pay any fixed dividend or other assets distribution (whether in excess cash, stock or property or any combination thereof) in respect of $5,000,000 in its capital stock, or redeem or otherwise acquire any one of its securities or a series any securities of related transactions other than the Company's subsidiaries, except that the Company may repurchase Outstanding Debentures to the extent necessary to satisfy its 1997 sinking fund obligation under the Indenture by which the Debentures were issued;
(d) (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit in the ordinary course of business and consistent with past practicesbusiness; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (ivii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary or entity except in the ordinary course of business and consistent with past practicespractice, and except for obligations of wholly-owned subsidiaries of it; (viii) make any loans, advances or capital contributions to, or investments in, any other personperson or entity (other than to wholly- owned subsidiaries of it or advances to employees in the ordinary course of business consistent with past practice and in amounts not material to the maker of such loan or advance); (iv) pledge or otherwise encumber shares of its capital stock or any of its subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon;
(e) except as may be required by law or as contemplated by this Agreement or described on the Company Disclosure Schedule, enter into, adopt or amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer, employee or former employee or independent contractor in any manner, or (except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to it and as required under existing agreements) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or performance units);
(f) acquire, sell, lease, license to others or dispose of any assets outside the ordinary course of business which individually or in the aggregate are material to the Corporation, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice which would be material to the Corporation;
(g) except as may be required as a result of a change in law or in generally accepted accounting principles, change any of the accounting principles or practices used by it;
(h) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory or writing-off notes or accounts receivable other than in the ordinary course of business;
(i) acquire or agree to acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein, other than to as specifically described on the Company Subsidiaries and Disclosure Schedule; (ii) enter into any contract or agreement other than in the ordinary course of business and consistent with past practicespractice which would be material to it; (viiii) authorize any new capital expenditure or expenditures substantially which, individually, is in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than $250,000 or, in the ordinary course aggregate, are in excess of business$2,500,000; or (viiiiv) enter into or amend any contract, agreement, commitment or arrangement with respect to any providing for the taking of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.be prohibited hereunder;
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER1. From Conduct of Business by LQ. During the period from the date of this Agreement to until the earlier of the termination of this Agreement or the Effective Time, unless Parent Dynabazaar shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or LQ shall conduct its business and the Company Disclosure Letter:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted its subsidiaries only in the ordinary and usual course of business and consistent with past practicespractice; and LQ shall use reasonable commercial efforts to preserve substantially intact the business organization of LQ and its subsidiaries, and there shall be no material changes in to keep available the conduct services of the operations present officers, employees and consultants of Company LQ and its subsidiaries and to preserve the present relationships of LQ and its subsidiaries with customers, suppliers and other persons with which LQ or any Company Subsidiary;
of its subsidiaries has significant business relations. During such period, neither LQ nor any of its subsidiaries shall, directly or indirectly, without the prior written consent of Dynabazaar: (a) amend LQ Charter Documents; (b) Company shall not (i) sell issue, sell, pledge, dispose of or pledge encumber, or agree to sell authorize the issuance, sale, pledge, disposition or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) splitencumbrance of, combine or reclassify any shares of its outstanding capital stock stock, or declareany options, set aside or pay any dividend warrants, convertible securities or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares ofof capital stock, or any other ownership interest (including, without limitation, any phantom
(i) declare, make or pay any dividend or other distribution in respect of any of its capital stock, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any class other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (whether through iii) amend the issuance terms or granting change the period of optionsexercisability of any option, warrantswarrant or right, commitmentsdirectly or indirectly, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Sharesacquire any such securities; (iie) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber incur any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions indebtedness for borrowed money (other than in the ordinary course of business and consistent with past practicespractice under any existing lines of credit) or issue any debt securities; (iiif) incurincrease the compensation (including bonus) or severance payable to its directors, assume officers, employees or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practicesconsultants; (ivg) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary fail to comply in the ordinary course of business all material respects with applicable laws and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable regulations or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, timely file such documents or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) disclosures as may be required under by applicable Law law or the terms of any existing Plan regulation; or agreement, and (iiih) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take make any action that would jeopardize qualification of the Merger as a reorganization within representations or warranties of LQ contained in this Agreement untrue or incorrect or prevent LQ from performing its covenants hereunder or cause any condition to LQ's obligations to consummate the meaning of section 368(a) of the Codetransactions contemplated hereby not to be satisfied.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From During the period from the date of this Agreement hereof to the Effective TimeClosing Date, unless Parent shall otherwise agree in writing, or except as otherwise expressly contemplated by this AgreementAgreement or as set forth on Jetcast Disclosure Schedule, or any Exhibit hereto, or the Company Disclosure LetterJetcast shall:
(a) the respective conduct its businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary Ordinary Course of Business (which shall permit the introduction and usual course expansion of business new products and consistent with past practices, and there shall be no material changes services contemplated by current plans in the conduct effect as of the operations date of Company or any Company Subsidiaryhereof);
(b) Company shall use reasonable efforts to preserve intact its business organizations and goodwill and preserve the goodwill and business relationships with customers, vendors, manufacturers and others having business relationships with them;
(c) not (i) sell amend or pledge propose to amend its articles of incorporation or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; bylaws, (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declarestock, set aside or pay any dividend or other distribution payable in cash(iii) repurchase, stock or property, or redeem or otherwise acquire any shares of its capital stock Jetcast Stock; or shares of the capital stock of (iv) form any of the Company Subsidiariessubsidiary or purchase an equity interest in any person;
(cd) neither Company nor not declare or pay any dividends or declare or make any other distributions of any kind (other than distributions of cash to the Company Subsidiaries shall Stockholders);
(ie) authorize for issuancenot issue, issue sell, pledge or sell dispose of, or agree to issue, sell, pledge or dispose of, any additional shares ofJetcast Stock, or any options, warrants or rights of any kind to acquire any shares of, its capital stock Jetcast Stock or other interests of any class or any debt or equity securities which are convertible into or exchangeable for such interests;
(whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (af) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, not mortgage, pledge or encumber subject to Lien any fixed of its assets or other assets in excess of $5,000,000 in properties;
(g) not (i) incur or become contingently liable with respect to any one or a series of related transactions Indebtedness for borrowed money other than borrowings in the ordinary course Ordinary Course of business and consistent with past practices; Business that will be repaid at or prior to Closing, (ii) make any acquisition of any assets or businesses other than acquisitions in the Ordinary Course of Business, (iii) incursell, assume pledge, abandon or prepay otherwise dispose of or encumber any indebtedness material assets or any other material liabilities businesses other than sales or dispositions of businesses or assets (x) in the ordinary course Ordinary Course of business and consistent with past practices; Business or (y) already contracted by Jetcast or as may be required by applicable Law, or (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing;
(dh) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, not enter into or amend any employment, severance, termination employment agreements or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than arrangements;
(i) not increase the salary or monetary compensation of any employee;
(j) not make any material capital expenditures or enter into any binding commitment or contract to make such expenditures;
(k) not seek to accelerate the receipt of amounts due with respect to receivables, or agree to lengthen the period for payment of accounts payable;
(l) not adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, merger, consolidation, recapitalization or other reorganization of Jetcast or adopt resolutions providing for or authorizing any such transaction;
(m) not enter into any settlement, consent decree or other agreement or arrangement with any third party or Governmental Authority that will limit or adversely impact the way in which Jetcast may be operated after the ordinary course Closing or would require the payment by Jetcast of business and consistent with past practiceany material funds after the Closing;
(n) not (i) make or change any Tax election, (ii) as may be required under applicable Law or the terms of any existing Plan or agreementchange an annual accounting period, and (iii) the granting adopt or change any Tax accounting method, (iv) file any amended Tax Return, (v) enter into any closing agreement, (vi) settle any Tax claim or assessment relating to Jetcast, or (vii) surrender any right to claim a refund of retention bonuses to certain officers and employees Taxes, if any such action described in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall clauses (i) knowingly take through (vii) could have the effect of increasing the Tax liability of Jetcast for any period ending after the Closing Date;
(o) not enter into any Contract contemplating payments to or allow to be taken from Jetcast in excess of $25,000 during any action which would jeopardize the treatment twelve-month period or with a term of Parent's acquisition of Company as a pooling of interests for accounting purposestwenty-four (24) months or longer; or amend any term, condition or provision of or terminate any such Contract;
(iip) knowingly not modify or amend any existing insurance policy; or
(q) not authorize any of, or commit or agree to take any action that would jeopardize qualification of of, the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing actions.
Appears in 1 contract
Sources: Merger Agreement (Lenco Mobile Inc.)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. From the date of this Agreement Prior to the Effective Time, unless Parent Purchaser shall otherwise agree in writing, or as otherwise expressly contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Lettershall:
(a) the conduct its business, and shall cause its Subsidiaries to conduct their respective businesses of Company businesses, only in, and the Company and its Subsidiaries shall be conducted only in not take any action except in, the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company its Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or or, except pursuant to the terms of the Class A Shares and the Class B Shares, declare, set aside or pay any dividend or other distribution payable in cash, stock or propertyproperty or, except pursuant to any obligation under any existing Benefit Plan or program of the Company with respect thereto, redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company its Subsidiaries;
(c) neither Company nor any except as set forth in Section 6.1 of the Company Disclosure Letter, not, and shall cause each of its Subsidiaries shall not to, (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Common Shares reserved for issuance upon the exercise of Employee Company Stock Options, (b) Options or the Warrants and Common Shares to be issued pursuant to issuable upon the Warrant Agreement and (c) conversion of the Employee Class A Shares or the Class B Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other substantial assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities for borrowed money other than in the ordinary course of business under the Credit Agreement (including hedging transactions) and consistent with past practices; practices or as set forth in Section 6.1 of the Disclosure Letter, (iv) other than commitments set forth in Section 6.1 of the Disclosure Letter, assume, guaranteeendorse (other than in the ordinary course of business consistent with past practices), endorse guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the material obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practicesSubsidiary; (v) make any loans, advances or capital contributions to, or investments in, any other personPerson, other than to Company Subsidiaries and Subsidiaries, or otherwise enter into any Contract other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially other than commitments set forth in excess Section 6.1 of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company Disclosure Letter or any Company Subsidiary as a beneficiary or a loss payee advances of expenses to be cancelled or terminated other than employees in the ordinary course of business, make any loans to employees; (vii) undertake, make or commit to undertake or make any capital expenditures, other than commitments set forth in Section 6.1 of the Disclosure Letter or capital expenditures made between the date hereof and the Effective Time in an average amount of no more than $100,000 per month (on a combined basis for the Company and the Subsidiaries) over such period; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable best business efforts to preserve intact the business organization of the Company and the Company its Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiariesthem;
(e) neither Company nor not and shall cause its Subsidiaries not to (i) enter into any new agreements or amend or modify any existing agreements with any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its their respective officers, directors or employees or make with any changes "disqualified individuals" (as defined in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation Section 280G(c) of the Merger Code); (ii) grant any increases in the compensation of their respective directors, officers and employees or otherwise, any "disqualified individuals" other than (i) increases in the ordinary course of business and consistent with past practicepractice to persons who are not directors or corporate officers of or "disqualified individuals" with respect to the Company or any Subsidiary, provided, that the Company provides Purchaser with written notice of any such increase (except for increases of less than 5% of annual salary); (iii) enter into, adopt, amend or terminate, or grant any new benefit not presently provided for under, any employee benefit plan or arrangement, except as required by law or to maintain the tax qualified status of the plan; provided, however, it is understood that the Company is permitted to pay bonuses and change in control payments and to amend existing plans as contemplated by this Agreement or as described in Section 6.1 of the Disclosure Letter; or (iv) except as contemplated by this Agreement or as described in Section 6.1 of the Disclosure Letter, take any action with respect to the grant of any severance or termination pay other than in the ordinary course of business and consistent with past practice and pursuant to policies in effect on the date of this Agreement;
(f) not, and shall not permit any Subsidiary to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial 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 (other than inventory, equipment and supplies in the ordinary course of business);
(g) after the date hereof, invest, and cause its Subsidiaries to invest, any excess cash or cash equivalents of the Company solely in (i) direct obligations of the United States of America, or of any agency thereof, or obligations guaranteed as to principal and interest by the United States of America, or of any agency thereof, in either case maturing not more than 180 days from the date of investment; (ii) as may be required under applicable Law certificates of deposit issued by any bank or trust company having capital, surplus of at least $500,000,000, maturing not more than 180 days from the terms date of any existing Plan or agreement, and investment; (iii) commercial paper rated A-1 or better or P-1 by Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors Services, Inc., respectively, maturing not more than 180 days from the granting date of retention bonuses investment; (iv) bank money market; (v) repurchase agreements with any bank, trust company or national banking association; or (vi) any mutual fund or separate account all of the investments of which are limited to certain officers and employees those instruments set forth in an aggregate amount not to exceed $2,000,000clauses (i) through (v) above; and
(fh) neither Company nor any take all actions reasonably necessary so that the conditions to Purchaser's or Merger Sub's obligations to consummate the Merger are satisfied on a timely basis, except as contemplated by this Agreement, unless the Board of Directors of the Company Subsidiaries shall (i) knowingly take or allow determines in good faith, following consultation with its outside counsel as to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action legal matters, that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeits fiduciary duties under applicable law require otherwise.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1 Conduct of Business by CPI and CII Pending the Merger. From the date Each of this Agreement CPI and CII covenants and agrees that, prior to the Effective Time, unless Parent TBA shall otherwise agree approve in writing, writing (which approval will not be unreasonably withheld) or as otherwise expressly contemplated or permitted by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) Each of CPI and CII shall conduct its business and operations, including its cash management practices, the respective businesses collection of Company receivables, maintenance of facilities and the Company Subsidiaries shall be conducted payment of payables, only in the usual and ordinary and usual course of business and consistent with past practices, custom and there shall be no practice in all material changes in the conduct of the operations of Company or any Company Subsidiaryrespects;
(b) Company Except for the acquisition by CPI of two hundred (200) shares of the capital stock of CII on July 1, 1998, neither CPI nor CII shall not directly or indirectly do any of the following: (i) sell sell, pledge, dispose of or pledge or agree to sell or pledge encumber any stock owned by it material portion of its assets, except in any the ordinary course of the Company Subsidiariesbusiness; (ii) amend or propose to amend its Certificate of Incorporation charter or By-Lawsbylaws; or (iii) split, combine or reclassify any outstanding shares of its outstanding capital stock stock, or declare, set aside or pay any dividend or other distribution payable in cash, stock or propertystock, or redeem property or otherwise with respect to shares of its capital stock; (iv) redeem, purchase or acquire or offer to acquire any shares of its capital stock or shares of the capital stock of other securities; (v) create any subsidiaries; or (vi) enter into or modify any contract, agreement, commitment or arrangement with respect to any of the Company Subsidiariesmatters set forth in this Section 5.1(b);
(c) neither Company Neither CPI nor any of the Company Subsidiaries CII shall (i) authorize for issuanceissue, issue sell, pledge or sell dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants, conversion privileges or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Sharescapital; (ii) acquireacquire (by merger, dispose ofconsolidation, transferacquisition of stock or assets or otherwise) any corporation, lease, license, mortgage, pledge or encumber any fixed partnership or other business organization or division or material assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practicesthereof; (iii) incurincur any material indebtedness for borrowed money, assume issue any debt securities or prepay guarantee any indebtedness to others; or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into or modify any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company Neither CPI nor CII shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(ei) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend modify any employment, severance, termination severance or other similar agreement, adopt any new Plan agreements or amend in any material respect any existing Planarrangements with, or make grant any loans to bonus, salary increase, severance or termination pay to, any officers or directors; or (ii) in the case of its officersemployees who are not officers or directors, directors or employees or make take any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, action other than (i) in the ordinary course of business and consistent in all material respects with past practicepractice (none of which shall be unreasonable or unusual) with respect to the grant of any bonuses, salary increases, severance or termination pay or with respect to any increase of benefits payable in effect on January 1, 1998;
(e) Neither CPI nor CII shall adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employee;
(f) except as otherwise required by its charter or bylaws, by this Agreement or by applicable law, and except in connection with the acquisition on July 1, 1998 by CPI of two hundred (200) shares of the capital stock of CII, neither CPI nor CII shall call any meeting of its shareholders and, with respect to any meeting of its shareholders called by CPI or CII, as applicable, shall provide to TBA copies of all written materials and other information given to the shareholders prior to the time such materials and information are given to the shareholders;
(g) Each of CPI and CII shall use commercially reasonable efforts to cause its current insurance (or reinsurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect;
(h) Each of CPI and CII shall (i) use commercially reasonable efforts to preserve intact its business organization and goodwill, keep in full force and effect all material rights, licenses, permits and franchises relating to its business, keep available the services of its officers and employees as a group and maintain satisfactory relationships with suppliers, distributors, customers and others having business relationships with it; (ii) as may be required under applicable Law or report on a regular and frequent basis, at reasonable times, to representatives of TBA regarding operational matters and the terms general status of any existing Plan or agreement, and ongoing operations; (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount use commercially reasonable efforts not to exceed $2,000,000take any action which would render, or which reasonably may be expected to render, any representation or warranty made by it in this Agreement untrue in any material respect at any time prior to the Effective Time if then made; and (iv) notify TBA of any emergency or other change in the normal course of their respective business or in the operation of their properties and of any tax audits, tax claims, governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated) if such emergency, change, audit, claim, complaint, investigation or hearing would be material, individually or in the aggregate, to the financial condition, results of operations or business of CPI or CII, or to the ability of CPI, CII, Merger Sub or TBA to consummate the transactions contemplated by this Agreement;
(i) Each of CPI and CII shall deliver to TBA promptly (but in any event within two business days) after the discovery or receipt of notice of any default under any material agreement to which it is a party or any other material adverse event or circumstance affecting CPI or CII (including the filing of any material litigation against CPI or CII or the existence of any dispute with any person or entity which involves a reasonable likelihood of such litigation being commenced), a certificate of the President of each of CPI or CII, as applicable, specifying the nature and period of the existence thereof and what actions CPI or CII has taken and proposes to take with respect thereto;
(j) Each of CPI and CII shall use commercially reasonable efforts to maintain its assets in customary repair, order and condition, replace in accordance with past practice its inoperable, worn out or obsolete assets with assets of quality at least comparable to the original quality of the assets being replaced and maintain in all material respects its books, accounts and records in accordance with past custom and practice as used in the preparation of the Financial Statements;
(k) Each of CPI and CII shall use commercially reasonable efforts to maintain in full force and effect the existence of all material patents, inventions, trademarks, service marks, trade dress, trade names, corporate names, copyrights, mask works, trade secrets, licenses, computer software, data and documentation and other proprietary rights, which it uses or owns;
(l) Each of CPI and CII shall have positive working capital at the Effective Time;
(m) Each of CPI and CII shall comply in all material respects with all legal requirements and contractual obligations applicable to its operations and business and pay all applicable taxes; and
(fn) neither Company Neither CPI nor CII shall enter into any contract (except for artist performances) requiring payments in excess of $5,000 or for a duration of more than one (1) year. For purposes of this Section 5.1, should TBA fail to approve in writing any action for which its approval is required pursuant to this Section 5.1 within three (3) business days after its receipt of a written request for approval in accordance with the notice requirements contained herein, the matter shall be deemed approved by TBA. Notwithstanding the foregoing, in the event "time is of the Company Subsidiaries shall (i) knowingly take or allow essence" with respect to a pending contract, the verbal approval by Greg ▇▇▇▇▇▇ ▇▇ Avalon Entertainment Group, Inc., a wholly-owned subsidiary of TBA, will be sufficient to satisfy this requirement provided a facsimile of the contract to be taken approved has been previously sent to Thom▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ TBA. Notwithstanding any action which would jeopardize other provision of this Agreement, the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; amendment or (ii) knowingly take any action that would jeopardize qualification modification of the Disclosure Schedule by CPI or CII after the time TBA has signed this Agreement shall have no effect with respect to the agreements, covenants and obligations of CPI, CII, TBA and Merger as a reorganization within the meaning Sub pursuant to this Section 5.1 and Sections 7.2 and 7.3 of section 368(a) of the Codethis Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1 Conduct of Business by Benacquista Pending the Merger.
(a) Benacquista shall use its reasonable best efforts to carry on its business in the usual, regular and ordinary course in substantially the same manner as hereto conducted. From Benacquista shall: (i) maintain insurance coverage and its books, accounts and records in the date usual manner consistent with prior practices; (ii) comply in all material respects with all laws, ordinances and regulations of this Agreement Governmental Entities applicable to the Effective Time, unless Parent shall otherwise agree Benacquista; and (iv) perform in writing, all material respects its obligations under all contracts and commitments to which it is a party or by which it is bound.
(b) Except as otherwise contemplated required or permitted by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company Benacquista shall not and shall not propose to (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; its capital stock, (ii) amend its Certificate Articles of Incorporation or By-Laws; or , (iii) split, combine or reclassify any shares of its outstanding 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 capital stock of Benacquista, or declare, set aside or pay any dividend or other distribution payable in cash, stock or propertyproperty or (iv) directly or indirectly redeem, purchase or redeem otherwise acquire or agree to redeem, purchase or otherwise acquire any shares of its Benacquista capital stock or shares of the capital stock of any of the Company Subsidiaries;stock.
(c) neither Company nor any of the Company Subsidiaries Benacquista shall not (i) authorize for issuanceexcept as permitted or required by this Agreement, issue issue, deliver or sell or agree to issue, deliver or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class or incur any liability, payable, contract or obligation in respect of any contract which individually or in the aggregate exceeds $5,000.
(whether through d) Except as disclosed in Benacquista Disclosure Schedule, Benacquista shall not (i) adopt, enter into, terminate or amend any bonus, profit sharing, compensation, severance, termination, stock option, pension, retirement, deferred compensation, employment agreement, trust, fund or other arrangement for the issuance benefit or granting welfare of optionsany director, warrantsofficer or current or former employee, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquireincrease in any manner the compensation or fringe benefit of any director or officer or of any employee (iii) pay any benefit not provided under any existing plan or arrangement, dispose of(iv) grant any awards under any bonus, transferincentive, leaseperformance, license, mortgage, pledge or encumber any fixed or other assets in excess compensation plan or arrangement (including, without limitation, the grant of $5,000,000 stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any one benefit plans or a series agreements or awards made thereunder), (v) take any action to fund or in any other way secure the payment of related transactions compensation or benefits under any employee plan, agreement, contract or arrangement other than in the ordinary course of business and consistent with past practices; (iii) incur, assume practice or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company adopt, enter into, amend or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into terminate any contract, agreement, commitment or arrangement with respect to do any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. 7.1 Conduct of Business by the KF and CMPI Pending the Merger From the date of this Agreement to hereof until the Effective Time, unless Parent KF and CMPI shall otherwise agree in writing, or and expect as otherwise contemplated by this Agreement, or any Exhibit heretoKF and CMPI and their respective Subsidiaries shall conduct their business in the ordinary course consistent with past practice. Except as otherwise provided in this Agreement, or and without limiting the Company Disclosure Lettergenerality of the foregoing, from the date hereof until the Effective Time, without the written consent of KF and CMPI, which consent shall not be unreasonably withheld:
(a) the Neither KF nor CMPI will adopt or propose any change to their respective businesses certificate or articles of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company incorporation or any Company Subsidiarybylaws;
(b) Company shall not Other than payment and distribution of the SHC Share Dividend as contemplated in Section 1.1, neither KF nor CMPI will (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, with respect to any shares of capital stock or propertyof the respective KF and CMPI, or (ii) repurchase, redeem or otherwise acquire any outstanding shares of its capital stock or shares of other securities of, or other ownership interests in, KF or CMPI, as the capital stock of any of the Company Subsidiariescase may be;
(c) neither Company Neither KF nor CMPI will, nor permit any of its Subsidiaries to, merge or consolidate with any other Person or acquire assets of any other Person except in the Company ordinary course of business or pursuant to transactions among wholly-owned subsidiaries of KF or CMPI, as the case may be;
(d) Neither KF nor CMPI will, nor permit any of its Subsidiaries shall to, sell, lease, license or otherwise surrender, relinquish or dispose of any material assets or properties except in the ordinary course of business;
(e) Neither KF nor CMPI will (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class securities (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquireenter into any amendment of any term of any outstanding security of such company or of any of its Subsidiaries, dispose of(iii) incur any indebtedness, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than except trade debt in the ordinary course of business and consistent debt pursuant to existing or previously disclosed contemplated credit facilities or arrangements, (iv) increase in any material respect compensation, bonus or other benefits payable to, or modify or amend any employment agreements or severance agreements with, any executive officer, or (v) enter into any settlement or consent with past practices; (iii) incurrespect to any pending litigation, assume or prepay any indebtedness or any other material liabilities other than settlements in the ordinary course of business or on terms which are not otherwise materially adverse to such company and consistent with past practices; its Subsidiaries taken as a whole;
(ivf) assumeKF and CMPI will not change any method of accounting or accounting practice by KF and CMPI or any of their Subsidiaries, guaranteeexcept for any such change required by GAAP;
(g) Neither KF nor CMPI will, endorse nor permit any of its Subsidiaries to, (i) take, or otherwise become liable agree or responsible (whether directlycommit to take, contingently any action that would make any representation and warranty of the respective company hereunder inaccurate in any material respect at, or otherwise) for the obligations as of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions time prior to, the Effective Time or investments in(ii) omit, or agree or commit to omit, to take any other personaction necessary or appropriate to prevent any such representation or warranty from being inaccurate in any material respect at any such time; and
(h) Neither KF nor CMPI will, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) nor permit any insurance policy naming Company of its Subsidiaries to, agree or any Company Subsidiary as a beneficiary or a loss payee commit to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to do any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Sources: Merger Agreement (Knight Fuller Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF THE BUSINESS BY COMPANY PENDING THE MERGEREFFECTIVE TIME. From and after the date of this Agreement hereof, prior to the Effective Time, except as set forth in Section 6.1 to the Company Disclosure Schedule or as contemplated by this Merger Agreement or required by Law, or unless Parent shall otherwise agree in writing, or the Company covenants and agrees that it shall carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted (which shall be deemed to include in a manner consistent with the budgets and plans heretofore made available to Parent, including all capital expenditure and plant expansion plans), use all reasonable efforts to preserve intact its present business organizations, keep available the services of its employees and consultants and preserve its relationships and goodwill with customers, suppliers, licensors, licensees, distributors and others having business dealings with the Company and to protect its Intellectual Property to the end that its goodwill and on-going businesses shall not be impaired in any material respect at the Effective Time. Unless Parent shall otherwise agree in writing and except as otherwise contemplated by this Agreement, or any Exhibit hereto, or set forth in Section 6.1 of the Company Disclosure LetterSchedule, prior to the Effective Time, the Company shall not:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell declare, set aside, or pledge pay any dividends on, or agree to sell or pledge make any stock owned by it other distributions in respect of, any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) capital stock, split, combine or reclassify any shares of its outstanding capital stock or declarestock, set aside or pay any dividend or other distribution payable in cashpurchase, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiariesor any other equity securities thereof or any rights, warrants, or options to acquire any such shares or other securities;
(cii) neither Company nor grant, award or enter into any compensation or change of control arrangement with any employee of the Company Subsidiaries shall (i) authorize for issuanceCompany, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and of the Company, consistent with past practices; , or change of control arrangement with any employee of the Company;
(iii) incurissue, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course deliver, sell, pledge, dispose of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations encumber any shares of its capital stock including any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments inStock Options, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess voting securities of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plansecurities convertible into, or make any loans rights, warrants or options to acquire, any of its officers, directors such shares or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwisevoting securities, other than (iA) in the ordinary course issuance of business and consistent with past practiceCompany Common Stock upon the exercise of Company Stock Options outstanding on the date of this Merger Agreement or (B) within the ten-day period following the date of this Merger Agreement, (ii) as may be required under applicable Law the issuance of additional Company Stock Options pursuant to the Company's 1994 Stock Option Plan to purchase up to 3,280,397 shares of Company Common Stock granted on the date hereof; or amend the terms of any existing Plan such securities, rights, warrants or agreementoptions or, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company except as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.set forth in
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERSECTION 5.1. From Conduct of Business by the Company Pending the Effective Time. Except as otherwise specifically contemplated by this Agreement, required by law, disclosed in Schedule 5.1 or consented to by Parent in writing (which consent shall not be unreasonably withheld or delayed), during the period from the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or (i) the Company Disclosure Letterand each Subsidiary shall conduct its business in the ordinary course consistent with past practice, and shall use commercially reasonable efforts to maintain its relationships with its employees, customers, suppliers, landlords and others having business dealings with it, and (ii) without limiting the generality of the foregoing, neither the Company nor any of its Subsidiaries will:
(a) amend their respective articles of incorporation or bylaws (or comparable governing instruments) or the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practicesRights Agreement, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiaryexcept as otherwise provided herein;
(b) authorize for issuance, issue, grant, sell, pledge or dispose of any shares of, or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any shares of, the capital stock or other securities of the Company shall or any of its Subsidiaries including, but not limited to, any securities convertible into or exchangeable for shares of stock of any class of the Company or any of its Subsidiaries, except for (i) sell or pledge or agree to sell or pledge any stock owned by it the issuance of Shares (including the associated Rights) upon the exercise of Company Stock Options outstanding on the date of this Agreement in any of the Company Subsidiaries; accordance with their present terms, (ii) amend its Certificate of Incorporation or By-Laws; or issuances in accordance with the Rights Agreement and (iii) transactions by and among the Company and its wholly-owned Subsidiaries or between its wholly-owned Subsidiaries;
(c) split, combine or reclassify any shares of its outstanding capital stock or declare, pay or set aside or pay any dividend or other distribution payable (whether in cash, stock or propertyproperty or any combination thereof) in respect of its capital stock or membership interests, other than dividends or distributions to the Company or a Subsidiary of the Company, or redeem directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiariesother securities;
(cd) neither Company nor any of other than a transaction by and among the Company and its wholly-owned Subsidiaries shall or between its wholly-owned Subsidiaries, (i) authorize for issuancecreate, issue incur or sell assume any additional shares of, debt in excess of US$250,000 individually or rights of any kind to acquire any shares of, its capital stock of any class (whether through in the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)aggregate, except for (a) unissued Shares reserved for issuance upon refinancings of existing obligations on terms that are, in the exercise of Employee Stock Optionsaggregate, (b) Shares to be issued pursuant no less favorable to the Warrant Agreement and (c) Company or its Subsidiaries than the Employee Sharesexisting terms, provided that any debt refinancings shall not increase the amount of indebtedness outstanding by more than the amount otherwise permitted by this Section 5.1(d)(i); (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, indirectly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practicesPerson; (viii) make any capital expenditures or make any loans, advances or capital contributions to, or investments in, any other person, Person (other than (v) payments in the nature of “key money” or pre-paid rent to secure a parking-related contract that do not exceed US$250,000 in the aggregate, (w) to the Company Subsidiaries or a Subsidiary of the Company, (x) customary travel, relocation or business advances to employees, (y) for the fiscal year ending December 31, 2004, such amounts as are contemplated (both as to type and amount of expense) by the Company’s capital budget for such fiscal year, a copy of which has been provided to Parent and (z) such other items as do not exceed US$250,000 individually or in the aggregate); (iv) acquire any portion of the stock, assets or business of, or merge or consolidate with, any other Person; (v) voluntarily incur (other than in the ordinary course of business and consistent with past practicespractice) any liability or obligation (absolute, accrued, contingent or otherwise) in excess of US$250,000 individually or in the aggregate; or (vi) authorize capital expenditures substantially sell, transfer, lease, mortgage, pledge, hypothecate or otherwise dispose of, or encumber, or agree to sell, transfer, lease, mortgage, pledge, hypothecate or otherwise dispose of or encumber, any assets or properties (whether real, personal or mixed) of the Company and its Subsidiaries having an aggregate value in excess of US$250,000;
(e) (i) increase in any manner the amount currently budgeted therefor; compensation of any of its officers or employees, except for increases in the ordinary course consistent with past practice that do not materially increase the Company’s compensation expense or benefits to such officers or employees (viias the case may be), (ii) permit enter into, establish, amend or terminate any insurance policy naming Company employment or consulting agreement or arrangement with, for or in respect of any Company Subsidiary as a beneficiary officer or a loss payee employee other than pursuant to be cancelled the terms of agreements in effect on the date of this Agreement, except for employment or terminated consulting agreements or arrangements with employees or consultants earning in each case annual compensation of US$75,000 or less, or (iii) enter into, establish, amend or terminate any retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity, pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in respect of, any stockholder, officer, director, or employee other than pursuant to the terms of agreements in effect on the date of this Agreement;
(f) pay, discharge or satisfy any claims, liabilities or obligations other than in the ordinary course of business; business consistent with past practice, or settle or compromise any material pending or threatened suits, actions or claims, on terms that result in aggregate payments by the Company of more than US$250,000;
(viiig) enter into any contract, agreement, commitment lease agreement which (i) has an initial term in excess of 10 years or arrangement with respect to any (ii) requires an initial contribution or other payment in excess of the foregoingUS$250,000;
(dh) Company shall use reasonable efforts to preserve intact propose, adopt, approve or implement any Stockholder Rights Plan which could have the business organization effect of Company and restricting, prohibiting, impeding or otherwise affecting the Company Subsidiariesconsummation of the transactions contemplated by this Agreement, to keep available or make a determination that Parent, Merger Sub or any of their respective affiliates or associates, directors, officers or employees is an “Acquiring Person” under the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company SubsidiariesRights Agreement;
(ei) neither Company nor waive, release, grant or transfer any rights of the Company Subsidiaries shall make any change in the compensation payable material value, or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend modify in any material respect any existing Planlease, management agreement or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwiseother contract, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and;
(fj) neither enter into any agreement or arrangement prohibiting or restricting it from freely engaging in the parking business in any geographic area;
(k) adopt a plan of complete or partial liquidation or adopt resolutions providing for or authorizing any such liquidation or any dissolution, merger, consolidation, restructuring, recapitalization or reorganization;
(l) change any of its accounting principles or policies except as required by GAAP or as the Company’s independent public accountants have advised the Company nor is required by GAAP; or
(m) agree in writing or otherwise to take any of the Company Subsidiaries shall actions described in Sections 5.1(a) through (il) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeabove.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From Juno has agreed that, from the date of this the Merger Agreement to until the earlier of the Effective TimeTime and the termination of the Merger Agreement pursuant to its terms, unless Parent shall otherwise agree except as expressly provided by the Merger Agreement or required by applicable legal requirements, as consented to in writingwriting by Celgene (which consent may not be unreasonably withheld, conditioned or delayed) or as otherwise contemplated by this Agreementdisclosed prior to execution of the Merger Agreement in Juno’s confidential disclosure schedule, or any Exhibit heretoit will, or the Company Disclosure Letter:
and will cause each of its subsidiaries to (ai) the respective businesses of Company and the Company Subsidiaries shall be conducted only conduct its business in the ordinary and usual TABLE OF CONTENTS course of business and consistent with past practices, practice and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend use commercially reasonable efforts to preserve intact its Certificate of Incorporation or By-Laws; or material assets, properties, contracts, licenses and business organization and to preserve satisfactory business relationships with licensors, licensees, lessors, governmental bodies and others having material business dealings with Juno and its subsidiaries. In addition, Juno and its subsidiaries will not, among other things and subject to specified exceptions (iii) splitincluding specified ordinary course exceptions): • establish a record date for, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or make any other distribution payable in cash, stock or property, or redeem or otherwise acquire respect of any shares of its capital stock (including the Shares); • repurchase, redeem or shares of the capital stock of otherwise reacquire any of the Company Subsidiaries;
(c) neither Company nor Shares, or any rights, warrants or options to acquire any of the Company Subsidiaries shall Shares (i) subject to specified exceptions); • split, combine, subdivide or reclassify any Shares or other equity interests; • sell, issue, grant, deliver, pledge, transfer, encumber or authorize for the sale, issuance, issue grant, delivery, pledge, transfer or sell encumbrance of (A) any additional shares ofcapital stock, equity interest or rights of other security, (B) any kind option, call, warrant, restricted securities or right to acquire any shares ofcapital stock, its equity interest or other security or (C) any instrument convertible into or exchangeable for any capital stock stock, equity interest or other security (subject to specified exceptions); • establish, adopt, terminate or materially amend any employee plan; • commence any clinical trial in respect of any class (whether through Juno product; • terminate, suspend, modify or otherwise take any step to limit the issuance effectiveness or granting validity of optionsany applicable material governmental authorization; • qualify any new site for manufacturing any Juno product, warrantswhich does not include the qualification of any reagent manufacturer; • amend or permit the adoption of any amendment to the certificate of incorporation or bylaws or other charter or organizational documents; • form any subsidiary, commitmentsacquire any equity interest in any other entity or enter into any joint venture, subscriptions, rights to purchase partnership or otherwise)similar arrangement; • make or authorize any capital expenditure, except for (a) unissued Shares reserved for issuance upon capital expenditures that do not exceed $1,000,000 individually or $5,000,000 in the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Sharesaggregate; (ii) • acquire, dispose of, transfer, lease, license, mortgagesublicense, pledge pledge, sell or encumber otherwise dispose of, divest or spin-off, abandon, waive, relinquish or permit to lapse (other than any fixed patent expiring at the end of its statutory term), transfer, assign, guarantee, exchange or swap, mortgage or otherwise subject to any encumbrance any material right or other assets material asset or property (subject to specified exceptions); • incur or guarantee any long-term or short-term indebtedness (except for short-term debt incurred in excess the ordinary course of business consistent with past practice to fund working capital requirements in an amount not to exceed $5,000,000 in 1,000,000 at any one or a series of related transactions time), repay (other than in the ordinary course of business and consistent with past practicespractice), redeem or repurchase any long-term or short-term debt, or cancel any material debt or claim owed to Juno or its subsidiaries; • amend or waive any of Juno’s material rights under, or accelerate the vesting under, any provision of any employee plan; • grant any employee or director any increase in compensation, bonuses or other benefits (iiiexcept as provided for in the Merger Agreement) incur(subject to specified exceptions); • lend money or make capital contributions or advances to, assume or prepay make investments in, any indebtedness or any other material liabilities other than person; • except in the ordinary course of business and consistent with past practicespractice, amend or modify in any material respect, or waive any material rights under or voluntarily terminate, any material contract, or enter into any contract which would be a material contract; (iv) assume • except as required by applicable legal requirements, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and TABLE OF CONTENTS consistent with past practice, (i) make any material change to any accounting method or accounting period used for tax purposes that has a material effect on taxes; (ii) make, rescind or change any material tax election; (iii) file a material amended tax return; (iv) enter into a “closing agreement” with any governmental body regarding any material tax liability or assessment; (v) settle, compromise or consent to any material tax claim or assessment or surrender a right to a material tax refund; or (vi) waive or extend the statute of limitations with respect to any material tax or material tax return; • settle, release, waive or compromise any legal proceeding or other claim (or threatened legal proceeding or other claim), other than any settlement, release, waiver or compromise that results solely in monetary obligations of not more than $1,000,000 in the aggregate (excluding monetary obligations that are funded by an indemnity obligation to, or an insurance policy of Juno or any of its subsidiaries) or results in no monetary or other material non-monetary obligation of Juno or its subsidiaries, subject to certain specified exceptions; • enter into any collective bargaining agreement or other agreement with any labor organization; • adopt or implement any stockholder rights plan or similar arrangement; • adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Juno or any of its subsidiaries; • amend or modify the compensation terms or any other obligations of Juno contained in the engagement letter with its financial advisor in a manner adverse to Juno or any of its subsidiaries or to Celgene, or engage other financial advisors in connection with the Transactions (unless ▇▇▇▇’s board of directors determines in good faith (after consultation with its outside legal counsel) that the failure to take such action would be inconsistent with its fiduciary duties under applicable law); • enter into any contract or transaction between Juno or any of Juno’s subsidiaries, on the one hand, and any affiliate of Juno or any of its subsidiaries on the other hand (subject to specified exceptions); or • authorize, agree or commit to take any of the foregoing actions. Antitrust Laws. Each of Juno, Celgene and Purchaser has agreed to use its reasonable best efforts to take promptly any and all steps necessary to avoid or eliminate each and every impediment under any antitrust laws that may be asserted by any governmental body, so as to enable the closing to occur as promptly as practicable, but in no case later than the End Date, including providing as promptly as reasonably practicable all information required by any governmental body pursuant to its evaluation of the Transactions under the HSR Act or other applicable antitrust law. Each of Juno, Celgene and Purchaser has also agreed to use reasonable best efforts to obtain from any governmental body all consents, approvals, authorizations or orders required to be obtained under antitrust laws or to avoid the entry or enactment of any injunction or other order or decree relating to any antitrust law that would delay, restrain, prevent, enjoin or otherwise prohibit consummation of the Transactions. Notwithstanding anything to the contrary in the Merger Agreement, Celgene and its affiliates shall not be required to effect or undertake (or be required to agree or consent to), and, without the prior written consent of Celgene, neither Juno nor its subsidiaries shall effect or undertake (and shall not agree or consent to) any sale, license, divesture or disposition or holding separate (through the establishment of a trust or otherwise) of or any other structural or behavioral conduct remedy with respect to, or restriction on the conduct or operation of (in each case, whether before or after the Offer Acceptance Time or the Effective Time), any entity, business, division, operation, product or product line, asset, intellectual property right of Celgene, Juno or any of Juno’s subsidiaries (or any of Celgene’s or Juno’s subsidiaries’ respective subsidiaries or other affiliates). Further, in no event shall Celgene, Purchaser, Juno or any of their respective subsidiaries be obligated to litigate or participate in the litigation of any action, whether judicial or administrative, brought by any governmental body challenging or seeking to restrain, prohibit or place conditions on the consummation of TABLE OF CONTENTS the Transactions (provided that Celgene shall have the right, in its sole discretion, to litigate or participate in the litigation of any such action, and if Celgene elects to take any such action, Juno shall reasonably cooperate with Celgene in connection with Celgene’s participation). Each of Juno, Celgene and Purchaser will (and will cause their respective affiliates, if applicable, to): (i) promptly, and in no event later than 10 business days after the date of the Merger Agreement, make an appropriate filing of all notification and report forms as required by the HSR Act or other applicable antitrust laws with respect to the Transactions and (ii) cooperate with each other in determining whether, and promptly preparing and making, any other filings, notifications or other consents required to be made with, or obtained from, any other governmental bodies in connection with the Transactions. ▇▇▇▇, Celgene and Purchaser have also agreed, until the Effective Time or the termination of the Merger Agreement pursuant to its terms, to: (i) promptly notify the other parties of the making or commencement of any request, inquiry, investigation, action or legal proceeding brought by a governmental body or brought by a third party before any governmental body, in each case, with respect to the Transactions under antitrust laws, (ii) keep the other parties informed as to the status of any such request, inquiry, investigation, action or legal proceeding, (iii) promptly inform, and to the extent practicable provide advance notice of and the opportunity to review and discuss in advance, and consider in good faith the view of the other in connection with, any written or oral communication to or from the Federal Trade Commission (the “FTC”), the Department of Justice (“DOJ”) or any other governmental body in connection with any such request, inquiry, investigation, action or legal proceeding, (iv) promptly furnish to the other party, subject to an appropriate confidentiality agreement to limit disclosure to counsel and outside consultants, with copies of documents provided to or received from any governmental body in connection with any such request, inquiry, investigation, action or legal proceeding (with certain limited exceptions), (v) subject to an appropriate confidentiality agreement to limit disclosure to counsel and outside consultants, consult and cooperate with the other parties and consider in good faith the views of the other parties in connection with any analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal made or submitted in connection with any such request, inquiry, investigation, action or legal proceeding, and (vi) except as may be prohibited by any governmental body or by any law, in connection with any such request, inquiry, investigation, action or legal proceeding in respect of the Transactions, provide advance notice of and permit authorized Representatives of the other parties to be present at each meeting or conference relating to such request, inquiry, investigation, action or legal proceeding and to have access to and be consulted in connection with any argument, opinion or proposal made or submitted to any governmental body in connection with such request, inquiry, investigation, action or legal proceeding. Celgene, however, shall, on behalf of the parties, control and direct all aspects of the parties’ efforts to obtain the required approvals under the applicable Law antitrust laws, including making the final determination as to the appropriate strategy relating to any matters relating to the applicable antitrust laws, including with respect to any filings, notifications, submissions and communications with or to any governmental body. If ▇▇▇▇ reasonably objects to any filing analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal made or submitted, or any other strategy, action or step taken in connection with the terms parties’ efforts to obtain the required approvals under the antitrust laws, then such matters shall be discussed and resolved by the Chief Executive Officers of any existing Plan or agreementCelgene and ▇▇▇▇, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow if unable to be taken any action which would jeopardize resolved in good faith during such discussion, shall thereafter be resolved by Celgene. During the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification period after the date of the Merger as a reorganization within Agreement until the meaning of section 368(a) earlier of the CodeEffective Time and the termination of the Merger Agreement pursuant to its terms, Juno has agreed, to the extent permissible under applicable legal requirements, to inform Celgene’s representative of, and give Celgene’s representative a reasonable opportunity to review and comment on in advance, any material filing proposed to be made by or on behalf of Juno or any of its subsidiaries with respect to product candidate JCARH125 and any material communication proposed to be submitted or given to the FDA, the European Medicines Agency (the “EMA”), or other governmental bodies specified in the Merger Agreement by or on behalf of Juno or any of its subsidiaries, in each case relating to JCARH125 (provided that in no event shall Juno be required to delay any such filing, correspondence or communication), and keep Celgene’s representative reasonably informed of any material communication (written, electronic, or oral) with or from the FDA, EMA or other specified governmental bodies relating to JCARH125. Additionally, each of the parties to the Merger Agreement has agreed not to, and to not permit their respective subsidiaries to, enter into or consummate any transaction, agreement, arrangement, or TABLE OF CONTENTS acquisition of any ownership interest or assets, the effect of which would reasonably be expected to impair, materially delay or prevent any required approvals, or expiration of the waiter period, under the relevant antitrust laws.
Appears in 1 contract
Conduct of Business Pending the Merger. (a) EQK covenants and agrees with ART that, except as provided in subsection (b) of this Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From 5.02, below, prior to the date Closing Date or the termination of this Agreement pursuant to the Effective Timeits terms, unless Parent ART shall otherwise agree consent in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the EQK will conduct its operations according to its ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall will not (i) sell or pledge enter into or agree to sell or pledge any stock owned by it in any transaction outside the ordinary course of the Company Subsidiaries; business, (ii) amend its Certificate incur any additional indebtedness for borrowed money except pursuant to existing lines of Incorporation or By-Laws; or credit and in the ordinary course of business, (iii) split, combine pay dividends on or reclassify any shares of its outstanding capital stock make other distributions or declare, set aside or pay any dividend or other distribution payable payments in cash, stock or property, or redeem or otherwise acquire any shares respect of its capital stock stock, (iv) issue any additional equity securities or shares of any option, warrant, right or other security exercisable for, convertible into or exchangeable for any equity securities, (v) increase or agree to increase the capital stock salary, compensation, bonus or benefits of any officer, trustee or employee of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions EQK other than in the ordinary course of business and consistent with past practices; (iiiexcept for reasonable consideration to be granted to trustees upon their retirement from the board of trustees) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess sell or otherwise dispose of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated of its properties other than in the ordinary course of business; .
(b) For all purposes of this Agreement, ART hereby consents to the acquisition by EQK of that certain retail shopping center known as the "Oak Tree Village"(the "NEW PROPERTY") from ART or an affiliate of ART pursuant to the terms and conditions set forth in that certain Purchase and Sale Agreement attached hereto as EXHIBIT G (viiithe "PURCHASE AND SALE AGREEMENT") enter into any contract, agreement, commitment and ART hereby agrees to transfer (or arrangement with respect cause the transfer of) the New Property to any EQK on such terms immediately after the filing of the foregoing;
(d) Company shall use reasonable efforts Amended Declaration of Trust and immediately prior to preserve intact the business organization of Company and Closing hereunder. ART also hereby consents to the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any prior sale of the Company Subsidiaries shall make any change in Mall upon terms and conditions determined by EQK, the compensation payable or retirement of the mortgage debt thereon, the payment of all other obligations of EQK (other than those associated with the New Property), the distribution of EQK's remaining net liquid assets to become payable the EQK Shareholders prior to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on the consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreementMerger, and (iii) all actions that EQK determines are necessary and appropriate to effectuate the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing.
Appears in 1 contract
Sources: Agreement and Plan of Merger (American Realty Trust Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.1 Conduct of Business Pending the Merger. From eTrato and the date of this Agreement Shareholders covenant and agree that, prior to the Effective Time, unless Parent Quepasa shall otherwise agree in writing, writing or as otherwise expressly contemplated or permitted by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective The businesses of Company and the Company Subsidiaries eTrato shall be conducted only in the ordinary course, on an arm's length basis and usual course in accordance in all material respects with all applicable laws, rules and regulations and past custom and practice; eTrato shall maintain its facilities in good operating condition, ordinary wear and tear excepted; and eTrato shall use its reasonable best efforts to preserve intact its business organization and goodwill, keep available the services of its officers and employees as a group and maintain satisfactory relationships with suppliers, distributors, customers and others having business and consistent relationships with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiaryit;
(b) Company eTrato shall not not, directly or indirectly, do or permit to occur any of the following: (i) sell issue, sell, pledge, dispose of or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; encumber (iiA) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or any options, warrants, conversion privileges or rights of any kind to acquire any shares of, any of its capital stock stock, or (B) any of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)its assets, except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; (ii) amend or propose to amend its Restated Certificate of Incorporation or Bylaws; (viiiiii) enter into split, combine or reclassify any contractoutstanding shares of eTrato Common Stock, agreementor declare, commitment set aside or arrangement pay any dividend of other distribution payable in cash, stock, property or otherwise with respect to shares of eTrato Common Stock; (iv) redeem, purchase or acquire or offer to acquire any shares of the foregoing;
eTrato Common Stock or other securities of eTrato; (dv) Company shall use reasonable efforts to preserve intact the acquire (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership, joint venture or other business organization or division or material assets thereof; (vi) incur any indebtedness for borrowed money or issue any debt securities except the borrowing of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) working capital in the ordinary course of business and consistent with past practice; (vii) make any investments other than short-term United States Treasury obligations or short-term certificates of deposit of a commercial bank or trust company; or (viii) enter into or propose to enter into, or modify or propose to modify, any agreement, arrangement or understanding with respect to any of the matters set forth in this Section 5.1(b);
(c) eTrato shall not, directly or indirectly, enter into or modify any contract, agreement or understanding, written or oral, that involves consideration or performance of eTrato of a value exceeding $50,000 or a term exceeding one year;
(d) Except as required by law, rule or regulation, eTrato shall not (i) enter into or modify any employment, severance or similar agreements or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, any officers or directors or consultants; or (ii) as may be required under applicable Law or take any action with respect to the terms grant of any existing Plan bonuses, salary increases, severance or termination pay or with respect to any increase of benefits payable in effect on the date hereof;
(e) eTrato shall not adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, trust, fund or group arrangement for the benefit or welfare of any employees or any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, and (iii) trust, fund or arrangements for the granting benefit or welfare of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000any director; and
(f) neither Company nor any of the Company Subsidiaries shall eTrato (i) knowingly shall not take or allow to be taken any action which would jeopardize render, or which reasonably may be expected to render, any representation or warranty made by it in this Agreement untrue at, or at any time prior to, the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposesEffective Time; or and (ii) knowingly take shall notify Quepasa of any action emergency or other change in the normal course of its business or in the operation of its properties and of any governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated) if such emergency, change, complaint, investigation or hearing would jeopardize qualification reasonably be expected to be material, alone or in the aggregate, to the business, operations or financial condition of eTrato or to eTrato's, Quepasa's or the Merger as a reorganization within Sub's ability to consummate the meaning of section 368(a) of the Codetransactions contemplated by this Agreement.
Appears in 1 contract
Sources: Merger Agreement (Quepasa Com Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. From ----------------------------------------------------- Except as otherwise permitted by Section 6.1 of the Company Disclosure Schedule or otherwise contemplated by this Agreement, after the date hereof and prior to the Closing Date or earlier termination of this Agreement to the Effective TimeAgreement, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Lettershall, and shall cause its subsidiaries to:
(a) the conduct their respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell amend or pledge propose to amend their respective charter or agree to sell or pledge any stock owned by it in any of by- laws (except that the Company Subsidiaries; may amend its charter to increase the number of authorized shares of Company Common Stock), (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its their outstanding capital stock or (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or propertyotherwise, except for the payment of dividends or redeem or otherwise acquire any shares of its capital stock or shares distributions to the Company by a wholly-owned subsidiary of the capital stock of any of the Company SubsidiariesCompany;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuancenot issue, issue sell, pledge or sell dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (whether through i) the Company may issue shares upon exercise of options and warrants, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire up to an aggregate of 120,000 shares of Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d), (iii) the Company may grant options with an exercise price per share of Company Common Stock no less than the closing price of a share of Company Common Stock on the day prior to grant of such option with respect to up to an aggregate of 100,000 shares of Company Common Stock; provided, however, that such grants may not be made to any current -------- ------- executive officer or director of the Company and may only be made in the ordinary course of business, to employees of the Company and its subsidiaries consistent with past practice; and (iv) after December 31, 1998, the Company may issue options to executive officers and directors in an amount consistent with past practice and after delivery to Parent of a letter from Ernst & Young LLP in a form reasonably satisfactory to Parent to the effect that the issuance of such options would not prevent the Merger from being treated as a "pooling of interests" for financial accounting purposes.
(d) not (i) incur or granting become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of optionsbusiness (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit --------------- Facilities") up to the existing borrowing limit on the date hereof or ---------- extensions of the Existing Credit Facilities to finance acquisitions pursuant to the proviso of this Section 6.1(d), warrants(B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, commitments(C) assumption of loans of certain leases of equipment in connection with acquisitions or rollovers of certain leases of equipment in the ordinary course of business consistent with past practice in amount or (D) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), subscriptions(ii) redeem, rights purchase, acquire or offer to purchase or otherwiseacquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) notwithstanding any other provision of this Section 6.1, take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) notwithstanding any ---------- other provision of this Section 6.1, take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of Stockholders in special circumstances) to recognize gain or loss for (afederal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) unissued Shares reserved for issuance upon of the exercise of Employee Stock OptionsCode, (bv) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge make any acquisition of any assets or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions businesses other than expenditures for current assets in the ordinary course of business and consistent with past practices; (iii) incur, assume expenditures for fixed or prepay any indebtedness or any other material liabilities other than capital assets in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary as set forth in the ordinary course of business and consistent with past practices; (v) make any loansproviso in this Section 6.1(d), advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess sell, pledge, dispose of the amount currently budgeted therefor; (vii) permit or encumber any insurance policy naming Company material assets or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated businesses other than (a) sales of businesses or assets in the ordinary course of business; , (b) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (c) sales of businesses or assets with aggregate 1997 revenues less than $5.0 million, and (d) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (viiivii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other -------- ------- than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate revenue projected to be earned from acquisitions (other than those acquisitions disclosed in Section 6.1 of the Company Disclosure Schedule) for the twelve months following each acquisition does not exceed $150 million prior to December 31, 1998 or $250 million thereafter, and the aggregate value of consideration paid or payable for any one such acquisition (other than those acquisitions disclosed in Section 6.1 of the Company Disclosure Schedule), including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisition (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of such acquisition is entered into) does not exceed $60 million. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming an 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger, (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition, and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act;
(de) Company shall use all reasonable efforts to preserve intact the their respective business organization of Company organizations and the Company Subsidiariesgoodwill, to keep available the services of its and their respective present officers and key employees, and to preserve the goodwill of those and business relationships with customers and others having business relationships with it and the Company Subsidiariesthem;
(ef) neither Company nor any subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the Company Subsidiaries shall make any change in the compensation payable or to become payable to any general status of its officers, directors or employees, ongoing operations;
(g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar agreementarrangements or agreements with any directors, adopt any new Plan officers or amend in any material respect any existing Plankey employees, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) except in the ordinary course of business and consistent with past practice; provided, however, that the Company and its subsidiaries shall in -------- ------- no event enter into or amend any written employment agreement providing for annual base salary in excess of $75,000 per annum, except for employment agreements entered into with the sellers of businesses acquired in accordance with this Agreement;
(h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as may be required under to comply with changes in applicable Law or the terms of any existing Plan or agreementlaw, and (iii) to increase the granting number of retention bonuses shares of Company Common Stock available for grant or award under the Company's 1997 Stock Option Plan, 1996 Stock Option Plan, 1991 Stock Option Plan and the 1988 Employee Stock Bonus Plan, (iv) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof or (v) as required pursuant to certain officers an existing contractual arrangement or agreement;
(i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and employees its businesses in an aggregate amount such amounts and against such risks and losses as are consistent with past practice;
(j) not to exceed $2,000,000make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authority; and
(fk) neither Company nor any of the Company Subsidiaries shall (i) knowingly take not change its accounting principles or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company practices other than as a pooling of interests for required by United States generally accepted accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeprinciples.
Appears in 1 contract
Sources: Merger Agreement (Eastern Environmental Services Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement to hereof until the Effective Time, unless Parent shall except as otherwise agree in writing, required or contemplated hereunder or as otherwise contemplated required by this Agreement, applicable law or any Exhibit hereto, or as set forth in Section 4.1 of the Company Disclosure LetterSchedule in the case of the Company and Section 4.1 of the Parent Disclosure Schedule in the case of Parent, each of the Company and Parent shall:
(a) the respective businesses of Company use all commercially reasonable efforts to conduct its business and the Company Subsidiaries shall be conducted business of its subsidiaries in all material respects only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Amended and Restated Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock Amended and Restated Bylaws or declare, set aside or pay any dividend or other distribution payable or payment in cash, stock or property, or redeem or otherwise acquire any shares property in respect of its capital stock or shares of the capital stock of any of the Company Subsidiaries(other than regular quarterly dividends);
(c) neither Company nor not reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(d) not issue, grant, sell or pledge or agree or authorize the Company Subsidiaries shall (i) authorize for issuance, issue grant, sale or sell pledge of any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than the grant of stock options in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries practice under current employee benefit plan arrangements and other than Company Common Stock or Parent Common Stock, as the case may be, issuable upon the exercise of stock options or issuable upon the exercise of convertibility features in its securities outstanding on the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiariesdate hereof;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable not acquire, sell, transfer, lease or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in encumber any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) assets except in the ordinary course of business and consistent with past practice;
(f) use all commercially reasonable efforts to preserve intact its business organizations and the business organizations of its subsidiaries, and to keep available the services of its present key officers and employees; PROVIDED, HOWEVER, that to satisfy the foregoing obligation, neither the Company nor Parent shall not be required to make any payments or enter into or amend any contractual arrangements or understandings, except in the ordinary course of business and consistent with past practice;
(iig) not adopt a plan of complete or partial liquidation or adopt resolutions providing for the complete or partial liquidation, dissolution, consolidation, merger, restructuring or recapitalization of the Company or Parent, as the case may be, or any of its subsidiaries;
(h) not grant any severance or termination pay (otherwise than pursuant to policies in effect on the date hereof) to, or enter into any employment agreement with, any of its executive officers or directors;
(i) not, except as set forth in Section 4.1 of the Company Disclosure Schedule or the Parent Disclosure Schedule or in the ordinary course of business consistent with past practice or pursuant to obligations imposed by collective bargaining agreements, increase the compensation payable or to become payable to its executive officers or employees, enter into any contract or other binding commitment in respect of any such increase with any of its directors, officers or other employees or any director, officer or other employee of its subsidiaries, and not establish, adopt, enter into, make any new grants or awards under or amend, any collective bargaining agreement or Plan, except as required by applicable law, including any obligation to engage in good faith collective bargaining, to maintain tax-qualified status or as may be required under applicable Law by any Plan as of the date hereof;
(j) not settle or compromise any material claims or litigation or, except in the ordinary course of business, modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, or make any payment, direct or indirect, of any material liability before the same becomes due and payable in accordance with its terms;
(k) not take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice with respect to accounting policies or procedures (including tax accounting policies and procedures), except as may be required by the SEC or the terms Financial Accounting Standards Board;
(l) not make any material tax election or permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Company or Parent, as the case may be, except in the ordinary course of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000business; and
(fm) neither Company nor not authorize or enter into an agreement to do any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From Each of the date of this Agreement parties to the Effective TimeMerger Agreement has undertaken to perform customary covenants in the Merger Agreement that place restrictions on it and its subsidiaries until the effective time of the Merger. In general, unless Parent shall otherwise agree each of LMI and Citrix (with respect to GetGo and the GoTo Business) has agreed that, prior to the effective time of the Merger, except as contemplated by the Merger Agreement or the other Transaction Documents (including with respect to the Reorganization), required by applicable law or consented to by the other party thereto (which consent may not be unreasonably withheld, conditioned or delayed), subject to certain agreed exceptions, it will conduct its business in writingthe ordinary course in all material respects. In addition, LMI has agreed that, prior to the effective time of the Merger, except as contemplated by the Merger Agreement or the other Transaction Documents, required by applicable law, or as otherwise contemplated consented to by this Citrix (which consent may not be unreasonably withheld, conditioned or delayed), subject to certain agreed exceptions set forth in LMI’s disclosure schedules to the Merger Agreement, LMI will not, and will cause its subsidiaries not to, take any of the following actions: • issue, sell, pledge, dispose of, grant or encumber, or authorize any such actions with respect to, any shares of capital stock of, or any Exhibit heretoother ownership interests in LMI or any of its subsidiaries, or the Company Disclosure Letter:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practicesany options, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) splitwarrants, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend convertible securities or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any “phantom” interest) of LMI or any of its subsidiaries subject to certain exceptions, including with respect to the issuance of equity awards to employees in the ordinary course of business and upon the exercise of settlement of equity awards outstanding as of the date of the Merger Agreement; • sell, pledge, dispose of, encumber (other than permitted encumbrances under the Merger Agreement) or authorize any such actions with respect to any material assets of the businesses of LMI and its Table of Contents subsidiaries, except in the ordinary course of business and consistent with past practice and dispositions of obsolete or worn out assets that are no longer useful in the operation or conduct of the business of LMI or its subsidiaries; • amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of LMI or any of its subsidiaries, except for the Charter Amendment; • declare, set aside, make or pay any dividend or other distribution with respect to any of its capital stock of any class (whether through the issuance or granting of optionsin cash, warrantsstock, commitments, subscriptions, rights to purchase property or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement cash dividends or distributions by any wholly owned subsidiary and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series more special cash dividends in an aggregate amount of related transactions up to $1.50 per share of LMI common stock as described in “—LMI Special Dividends” below. • adjust, reclassify, combine, split, subdivide or redeem, or purchase or otherwise directly or indirectly acquire any of its capital stock; • other than in the ordinary course of business and consistent with past practices; practice or as required by existing compensation or benefit programs: acquire or dispose of (iii) incurincluding by merger, assume consolidation or prepay any indebtedness acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division, business unit or material liabilities assets thereof having a value in excess of $50.0 million individually or in the aggregate (provided that no such acquisition or disposition, whether alone or in combination, is significant to LMI such that pro forma financial statements would be required to be included in the registration statement contained in this proxy statement/prospectus-information statement under Regulation S-X) or make any loans or advances or capital contribution to, or investment in, any entity other than LMI or a subsidiary of LMI, except for travel advances to employees in the ordinary course of business consistent with past practice; • other than in the ordinary course of business and consistent with past practices; practice or as required by existing compensation or benefit programs, increase the compensation or benefits payable to any employee of LMI or its subsidiaries, materially amend or supplement any bonus, equity incentive, deferred compensation or other employee benefit plan, enter into or amend any employment, consulting, change in control, retention, severance or termination agreement with any employee of LMI, terminate the employment (ivother than for cause) assumeof or hire or promote any individual who is an officer of LMI or its subsidiaries at the vice president level or above, guarantee, endorse or otherwise become liable or responsible hire (whether directly, contingently or otherwisesubject to certain exceptions) for the obligations of any other person other than a Company Subsidiary in employee of LMI and its affiliates or enter into any collective bargaining agreement; • change any method of accounting or accounting practice or policy used by LMI as it relates to the ordinary course businesses of business LMI and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other personits subsidiaries, other than to Company Subsidiaries and such changes as are required by GAAP or a governmental authority; • other than in the ordinary course of business and consistent with past practicespractice, make any change (or file any such change) in any method of tax accounting or any annual tax accounting period, make, change or rescind any tax election, settle or compromise any tax liability or consent to any claim or assessment relating to taxes, file any amended tax return or claim for refund, enter into any closing agreement relating to taxes or waive or extend the statute of limitations in respect of taxes; in each case, to the extent that doing so would reasonably be expected to result in a material incremental cost to Citrix or any of its subsidiaries; • pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the financial statements set forth in reports filed or furnished by LMI to the SEC or incurred in the ordinary course of business and consistent with past practice; • incur, guarantee or assume or otherwise become responsible for any indebtedness for borrowed money other than (i) indebtedness incurred under LMI’s current credit facilities; (viii) authorize capital expenditures substantially in excess of the amount currently budgeted thereforindebtedness solely between or among LMI and its subsidiaries; (viiiii) permit refinancing, replacements, extensions and renewals of Table of Contents existing indebtedness entered into in the ordinary course of business consistent with past practice; and (iv) letters of credit or similar arrangements entered into in the ordinary course of business consistent with past practice; • commence or settle any insurance policy naming Company action or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated investigation other than in the ordinary course of businessbusiness and consistent with past practice; • enter into, extend, materially amend, cancel or (viii) terminate any material contract of LMI other than in the ordinary course of business and consistent with past practice; • abandon, disclaim, sell, assign or grant any security interest in, to or under any intellectual property material to LMI, or grant to any third party any license, or enter into any contractcovenant not to sue, agreement, commitment or arrangement with respect to any intellectual property material to LMI, in each case, except for non-exclusive licenses granted to customers in the ordinary course of business and consistent with past practice and on LMI’s (or a subsidiary’s) standard form of customer contract without material modification of any provisions relating to any intellectual property material to LMI; • fail to exercise any rights of renewal with respect to any material real property leased, subleased, licensed or otherwise occupied by LMI or any of its subsidiaries that by its terms would otherwise expire unless LMI (or, if the lessee is a subsidiary of LMI, such subsidiary) determines in good faith that a renewal would not be in the best interests of LMI; • fail to maintain (with insurance companies substantially as financially responsible as its existing insurers) insurance in at least such amounts and against at least such risks and losses as are consistent in all material respects with the past practice of LMI and its subsidiaries; or • announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing;
. Citrix has agreed that, prior to the effective time of the Merger, except as contemplated by the Merger Agreement or the other Transaction Documents, required by applicable law or consented to by LMI (d) Company shall use reasonable efforts which consent may not be unreasonably withheld, conditioned or delayed), subject to preserve intact certain agreed exceptions set forth in Citrix’s disclosure schedules to the business organization of Company Merger Agreement, Citrix will not, and the Company Subsidiarieswill cause its subsidiaries not to, to keep available the services of its and their present officers and key employeesextent relating to the GoTo Business, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor take any of the Company Subsidiaries shall following actions: • issue, sell, pledge, dispose of, grant or encumber, or authorize any such actions with respect to, any shares of capital stock of, or any other ownership interests in GetGo (or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization), or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any “phantom” interest) of GetGo (or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization); • sell, pledge, dispose of, encumber (other than permitted encumbrances under the Merger Agreement) or authorize any such actions with respect to any material assets of the GoTo Business, except in the ordinary course of business and consistent with past practice and dispositions of obsolete or worn out assets that are no longer useful in the operation or conduct of the GoTo Business; • amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of GetGo (or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization) other than an amendment to the certificate of incorporation of GetGo to increase the number of authorized shares of GetGo common stock; • adjust, reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock of GetGo or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization; • acquire or dispose of any corporation, partnership, other business organization or any division thereof; or make any change loans or advances or capital contribution to, or investment in, any individual or entity Table of Contents other than GetGo (or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization), except for travel advances to employees in the ordinary course of business consistent with past practices; • issue equity awards that, pursuant to the Merger Agreement, are required to be substituted with equity awards of LMI; • other than in the ordinary course of business and consistent with past practice or as required by existing compensation payable or to become benefit programs: increase the compensation or benefits payable to any employee of Citrix or its officersaffiliates, directors materially amend or employeessupplement any bonus, equity incentive, deferred compensation or other employee benefit plan, enter into or amend any employment, severanceconsulting, change in control, retention, severance or termination agreement with any employee of Citrix performing services primarily related to the GoTo Business, which we refer to herein as a GetGo Employee, terminate the employment (other than for cause) of or hire or promote any individual who is or who will, upon consummation of the Reorganization, be an officer of GetGo at the vice president level or above or enter into any collective bargaining agreement; • subject to certain exceptions, hire, transfer internally or otherwise alter the duties and responsibilities of any employee of Citrix and its affiliates in a manner that would affect whether such employee is or is not classified as a GetGo Employee; • change any method of accounting or accounting practice or policy used by Citrix as it relates to the GoTo Business, other similar agreementthan such changes as are required by GAAP or a governmental authority; • other than in the ordinary course of business and consistent with past practice, adopt make any new Plan change (or amend file any such change) in any method of tax accounting or any annual tax accounting period, make, change or rescind any tax election, settle or compromise any tax liability or consent to any claim or assessment relating to taxes, file any amended tax return or claim for refund, enter into any closing agreement relating to taxes or waive or extend the statute of limitations in respect of taxes; in each case, to the extent that doing so would reasonably be expected to result in a material respect incremental cost to LMI, GetGo or any existing Planof their respective subsidiaries; • pay, discharge or make satisfy any loans material claim, liability or obligation, other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in certain financial statements provided to LMI or subsequently incurred in the ordinary course of business and consistent with past practice; • incur, guarantee or assume or otherwise become responsible for any indebtedness for borrowed money other than (i) indebtedness solely between or among Citrix and any of its officerssubsidiaries that will be repaid prior to the Distribution; and (ii) letters of credit or similar arrangements entered into in the ordinary course of business consistent with past practice; • commence or settle any action, directors claim, litigation, investigation or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, similar proceeding other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; practice or (ii) knowingly take settlements not involving any action that would jeopardize qualification material obligations following the closing of the Merger of GetGo or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization; • other than in the ordinary course of business and consistent with past practice, enter into, extend, materially amend, cancel or terminate any material contract of GetGo; • abandon, disclaim, sell, assign or grant any security interest in, to or under any intellectual property material to the GoTo Business, or grant to any third party any license, or enter into any covenant not to sue, with respect to any intellectual property material to the GoTo Business, in each case, except for non-exclusive licenses granted to customers in the ordinary course of business and consistent with past practice and on Citrix’s (or a subsidiary’s) standard form of customer contract without material modification of any provisions relating to any intellectual property material to the GoTo Business; • fail to exercise any rights of renewal with respect to certain material real property leased by Citrix that by its terms would otherwise expire; Table of Contents • fail to maintain (with insurance companies substantially as financially responsible as its existing insurers) insurance in at least such amounts and against at least such risks and losses as are consistent in all material respects with Citrix’s past practice with respect to the GoTo Business; • adopt a reorganization within plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization or other material reorganization; • amend or modify the meaning of section 368(a) Reorganization or fail to implement the Reorganization consistent with the plan set forth in the Separation Agreement, except in each case as otherwise permitted under the terms of the CodeSeparation Agreement; or • announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (GetGo, Inc.)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERConduct of Business by Parent Pending the Merger. From the date of this Agreement to the Effective Time, unless Company shall otherwise agree in writing, or as otherwise contemplated by this Agreement:
(a) the respective businesses of Parent and the Parent Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Parent or any Parent Subsidiary;
(b) Parent shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Parent Subsidiaries (except the pledge of stock of the Parent Subsidiaries in connection with funding the acquisition or development of surgery centers in the ordinary course of business), (ii) amend its Charter or Bylaws (other than as attached hereto as Exhibit 6.1(b)(1) (the "Parent Amended and Restated Charter") and Exhibit 6.1(b)(2) (the "Parent Amended and Restated Bylaws"), in connection with the amendment and restatement of its Charter to be voted on by its shareholders at the meeting of its shareholders contemplated in Section 7.4 and the amendment and restatement of its Bylaws), or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Parent Subsidiaries (other than a reverse stock split to be voted on by its shareholders at the meeting of its shareholders contemplated in Section 7.4);
(c) except (i) in the ordinary course of business and (ii) in connection with Parent's credit facility or bridge facility, so long as indebtedness thereunder does not exceed $60,000,000, neither Parent nor any of the Parent Subsidiaries shall (A) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for unissued Parent Shares reserved for issuance upon the exercise of Parent Employee Stock Options outstanding as of the date hereof; (B) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any of its properties or assets other than in the ordinary course of business and consistent with past practices; (C) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (D) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than the Parent or a Parent Subsidiary in the ordinary course of business and consistent with past practices; (E) make any loans, advances or capital contributions to, or investments in, any other person (other than the Parent Subsidiaries); (F) authorize any capital expenditures; (G) make any distribution to equity holders of any Parent Subsidiary other than in the ordinary course of business and consistent with past practices, (H) amend the charter, bylaws, operating agreement, partnership agreement or other organizational documents, as the case may be, of any of the Parent Subsidiaries, other than in the ordinary course of business, (I) enter into, amend, terminate or cancel, or permit the termination or cancellation of, any insurance policy except in the ordinary course of business and consistent with past practices; or (J) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Parent shall use commercially reasonable efforts to preserve intact the business organization of Parent and the Parent Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and them; and
(e) except in the ordinary course of business, neither Parent nor any Parent Subsidiary will make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, or adopt any new Parent Plan or amend in any material respect any existing Parent Plan (other than as disclosed in the Parent Disclosure Schedule and to be voted on by its shareholders at the meeting of its shareholders contemplated in Section 7.4), or make any loans to any of its officers, directors or employees, other than as may be required by applicable law or the terms of any existing Parent Plan.
Section 6.2 Conduct of Business by Company Pending the Merger. From the date of this Agreement to the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; Subsidiaries (except the pledge of stock of the Company Subsidiaries in connection with funding the acquisition or development of surgery centers in the ordinary course of business), (ii) amend its Certificate of Incorporation or By-LawsBylaws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries except in connection with the conversion of ownership interests held by third parties in Company Subsidiaries;
(c) except (i) in the ordinary course of business, (ii) in connection with the exercise of warrants and options to purchase Company Shares outstanding as of the date hereof and (iii) in connection with the conversion of ownership interests held by third parties in Company Subsidiaries or the elimination of such third parties' conversion rights, neither Company nor any of the Company Subsidiaries shall (iA) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Company Shares reserved for issuance upon the exercise of Company Employee Stock Options, (b) Shares to be issued pursuant to Options outstanding as of the Warrant Agreement and (c) the Employee Sharesdate hereof; (iiB) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iiiC) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (ivD) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person person, other than a Company Subsidiary in the ordinary course of business and consistent with past practices; (vE) make any loans, advances or capital contributions to, or investments in, any other person, person (other than the Company Subsidiaries); (F) authorize capital expenditures; (G) make any distribution to equity holders of any Company Subsidiaries and Subsidiary other than in the ordinary course of business and consistent with past practices; , (viH) authorize capital expenditures substantially in excess amend the charter, bylaws, operating agreement, partnership agreement or other organizational documents, as the case may be, or any of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated Subsidiaries, other than in the ordinary course of business, (I) enter into, amend, terminate or cancel, or permit the termination or cancellation of, any insurance policy except in the ordinary course of business and consistent with past practices; or (viiiJ) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use commercially reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;them; and
(e) except in the ordinary course of business, neither Company nor any of the Company Subsidiaries shall Subsidiary will make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, or adopt any new Company Plan or amend in any material respect any existing Company Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwiseemployees, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under by applicable Law law or the terms of any existing Company Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Code.
Appears in 1 contract
Sources: Merger Agreement (Symbion Inc/Tn)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER5.01 Conduct of Business by the Company Pending the Merger. From Between the date of this Agreement to and the Effective TimeTime (or the earlier termination of this Agreement in accordance with Article 8), unless Parent shall otherwise agree in writing, or except as otherwise expressly contemplated by this Agreement, Agreement or any Exhibit hereto, or as set forth in Section 5.01 of the Company Disclosure Letter:
(a) Schedule, the respective businesses of the Company and the Company its Subsidiaries shall be conducted only in in, and the Company and its Subsidiaries shall not take any action except in, the ordinary and usual course of business and in a manner consistent with past practicespractice and in compliance in all material respects with applicable Law, and there the Company shall, and shall be no cause each of its Subsidiaries to, use its reasonable best efforts consistent with past practice to preserve substantially intact the business organization of the Company and its Subsidiaries and to preserve the assets and properties of the Company and its Subsidiaries in good repair and condition and to preserve any material changes business relationships of the Company and its Subsidiaries, in each case, in the conduct ordinary course of business and in a manner consistent with past practice. Without limiting the generality of the operations foregoing, except as expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, the Company agrees that neither the Company nor any of its Subsidiaries shall, between the date of this Agreement and the Effective Time (or the earlier termination of this Agreement in accordance with Article 8), directly or indirectly, do any Company Subsidiaryof the following without the prior written consent of Merger Co (which consent shall not be unreasonably withheld):
(a) amend or otherwise change its Articles of Incorporation or Bylaws (or similar organizational documents);
(b) Company shall not issue, sell, pledge, dispose of, grant, encumber or otherwise subject to any Lien, or authorize such issuance, sale, pledge, disposition, grant or encumbrance of or subjection to such Lien, (i) sell or pledge or agree to sell or pledge any shares of any class of capital stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock Subsidiaries, or declareany options, set aside or pay any dividend warrants, convertible securities or other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares ofof such capital stock, Rights, or any other ownership interest (including any phantom interest), of the Company or any of its Subsidiaries except for the issuance of Shares (and Rights associated with the Shares) issuable pursuant to the exercise of any Company Stock Options outstanding on the date hereof under Company Stock Option Plans as in effect as of the date hereof, or in connection with Share purchases under the ESPP to the extent set forth in Section 6.06(e) or (ii) any material assets of the Company or any Subsidiary of the Company, except for the sale of obsolete or worn out assets in the ordinary course of business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for dividends by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other wholly-owned Subsidiary of the Company;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock of the Company or any class (whether through the issuance or granting of optionsits Subsidiaries, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon other than in connection with the exercise of Employee employee stock options or the withholding of shares of Company Common Stock Optionsby the Company in satisfaction of personal income tax obligations in connection with the vesting of Restricted Shares;
(i) acquire (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof, other than acquisitions in the ordinary course of business in an existing line of business that do not have a value (bincluding the amount of any assumed indebtedness) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 7,500,000, individually, or $15,000,000, in the aggregate, (ii) repurchase, repay, cancel or incur any indebtedness for borrowed money, other than (A) capital leases in the ordinary course of business consistent with past practice or (B) under the Credit Agreement in the ordinary course of business consistent with past practice; (iii) grant any security interest in any one of its assets; (iv) issue any debt securities or a series assume, endorse, or otherwise become responsible for, the obligations of related transactions other than any person, or make any loans or advances, except in the ordinary course of business and consistent with past practicespractice; (iiiv) incurexcept to the extent the amount is reflected in the current operating budget of the Company provided to Merger Co prior to the date hereof, assume authorize, or prepay make any indebtedness or commitment with respect to, any other material liabilities capital expenditure, other than capital expenditures in the ordinary course of business and consistent with past practices; (iv) assumenot in excess of $5,000,000, guaranteeindividually, endorse or otherwise become liable or responsible (whether directly$15,000,000 in the aggregate, contingently or otherwise) for the obligations of any other person other than Company and its Subsidiaries taken as a Company Subsidiary in the ordinary course of business and consistent with past practices; (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practiceswhole; (vi) authorize capital expenditures substantially in excess enter into any new line of the amount currently budgeted thereforbusiness outside of its current business segments; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated make investments in persons other than wholly owned Subsidiaries, other than ordinary course investments in accordance with the Company's existing written investment policy provided to Merger Co prior to the date hereof; or (viii) acquire, enter into, or extend any option to acquire, or exercise an option to acquire, real property, or commence construction of, or enter into any contract to develop or construct, other real estate projects;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or, except in the ordinary course of business; , any Subsidiary of the Company (other than the Merger);
(i) except as required by Law or the Treasury Regulations promulgated under the Code, make any change (or file any such change) in any method of Tax accounting or (viiiii) make, change or rescind any material Tax election, settle or compromise any material Tax liability, audit, claim, or assessment, or surrender any right to claim for a Tax refund, file any amended Tax Return involving a material amount of additional Taxes (except as required by Law), enter into any contractclosing agreement relating to Taxes, agreement, commitment or arrangement with waive or extend the statute of limitations in respect of Taxes (other than pursuant to any extensions of time to file Tax Returns obtained in the foregoingordinary course of business);
(dh) Company shall use reasonable efforts make any change to preserve intact its methods of accounting in effect at December 31, 2005, except (i) as required by changes in GAAP (or any interpretation thereof) or Regulation S-X of the business organization of Company Exchange Act, (ii) as may be required by a change in applicable Law, or (iii) as disclosed in the SEC Reports filed after December 31, 2005 and prior to the Company Subsidiaries, to keep available date hereof or as required by a Governmental Entity or quasi-Governmental Entity (including the services of its and their present officers and key employees, and to preserve Financial Accounting Standards Board (the goodwill of those having business relationships with it and the Company Subsidiaries"FASB") or any similar organization);
(ei) neither Company nor write up, write down, or write off the book value of any assets of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of and its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwiseSubsidiaries, other than (i) in the ordinary course of business and consistent with past practice, practice or (ii) as may be required under applicable Law by GAAP or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; andFASB;
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification be reasonably likely to prevent or materially delay satisfaction of the conditions contained in Section 7.01 or 7.02 or the consummation of the Merger or (ii) take any action that would have a Company Material Adverse Effect;
(k) enter into any agreement that restricts the ability of the Company or any of its Subsidiaries to engage or compete in any line of business;
(l) effectuate a "mass layoff," as such term is defined in the Worker Adjustment and Retraining Notification Act of 1988;
(m) open any new Schools or undertake any other intentional activities that would subject the Company or any School to the jurisdiction of a reorganization within new institutional Accrediting Body;
(n) except as required pursuant to existing written agreements or Plans set forth on Section 5.01 of the meaning Company Disclosure Schedule, in effect prior to the execution of section 368(athis Agreement, or as otherwise required by Law, (i) increase the compensation payable or to become payable (including bonuses or bonus opportunities) or the benefits provided to Company Employees, except for increases in compensation in the ordinary course of business consistent with past practice with respect to active Company Employees who are not executive officers or directors; (ii) grant any retention, severance, termination or similar pay to any Company Employee; (iii) establish, adopt, enter into, renew, terminate or amend any Plan (whether or not such Plan would be a Plan on the date hereof) for the benefit of any Company Employee, except amendments and terminations required by applicable Law; or (iv) grant any equity or equity-based awards;
(o) fail to maintain in full force and effect the existing insurance policies (or comparable replacement policies) covering the Company and its Subsidiaries and their respective properties, assets and businesses;
(p) amend, modify or consent to the termination of any Specified Contract or enter into, amend or modify any agreement that would be required to be set forth in Section 3.19(b) of the CodeCompany Disclosure Schedule if in effect, as entered into, amended or modified, on the date of this Agreement pursuant to Sections 3.19(b)(ii), (iii), (vi), (viii) and (xi);
(q) settle or compromise any material Action whether administrative, civil or criminal, in law or in equity; or
(r) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.
5.02 Conduct of Business by Merger Co Pending the Merger. Between the date of this Agreement and the Effective Time (or the earlier termination of this Agreement in accordance with Article 8), Merger Co shall not, directly or indirectly, take any action that would prevent or materially delay the satisfaction of the conditions contained in Section 7.01 or 7.03 or the consummation of the Merger (it being understood that nothing contained in this Section 5.02 shall prevent Merger Co from taking actions in accordance with, and consistent with the time periods permitted by, Section 6.08).
Appears in 1 contract
Sources: Merger Agreement (Education Management Corporation)
Conduct of Business Pending the Merger. Section 6.1 5.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGERPRIOR TO EFFECTIVE TIME. From Each of Cove, the Cove Principals and Euroseas, as applicable, hereby covenants and agrees as follows (and the Cove Principals covenant and agree to cause Cove to comply with such covenants and agreements), from and after the date of this Agreement to and until the Effective Time, unless Parent shall otherwise agree except as specifically consented to in writing, writing by the other party or as otherwise contemplated by this Agreement, or any Exhibit hereto, or set forth in Section 5.1 of the Company respective Disclosure LetterSchedules:
(a) the respective businesses of Company and the Company Subsidiaries It shall be conducted only conduct its business in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiarypractice;
(b) Company It shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify any shares of its outstanding capital stock or declare, set aside or pay any dividend or other distribution payable in cash, stock, property or otherwise (other than a reverse stock split by Euroseas with the prior consent of Cove, which consent shall not be unreasonably withheld or propertydelayed), (ii) spin-off any assets or businesses, (iii) engage in any transaction for the purpose of effecting a recapitalization, or redeem (iv) engage in any transaction or otherwise acquire any shares series of its capital stock or shares of the capital stock of related transactions which has a similar effect to any of the Company Subsidiariesforegoing;
(c) neither Company nor any of the Company Subsidiaries It shall (i) authorize for issuancenot issue, issue sell, pledge or sell dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, of its capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock or amend or modify the terms and conditions of any of the foregoing (whether through except, in the issuance case of Euroseas, it may issue shares and warrants as contemplated in connection with the Private Placement Transaction);
(d) It shall not (i) redeem, purchase, acquire or granting of options, warrants, commitments, subscriptions, rights offer to purchase or otherwise)acquire any shares of its capital stock, except for (a) unissued Shares reserved for issuance upon other than as required by the exercise governing terms of Employee Stock Optionssuch securities, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquiretake or fail to take any action which action or failure to take action would cause it or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares) to recognize gain or loss for Tax purposes as a result of the consummation of the Merger, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course case of business and consistent with past practices; Cove, make any acquisition of any material assets or businesses, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course case of business and consistent with past practices; Cove, sell any material assets or businesses, (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course case of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) Cove, enter into any contract, agreement, commitment or arrangement with respect to do any of the foregoing; or (vi) in the case of Kevin Peterson, he or she shall not resign as a director or officer of ▇▇▇▇ ▇▇▇▇▇ ▇▇e Effective Time;
(de) Company It shall use reasonable efforts to preserve intact the its business organization of Company and the Company Subsidiariesgoodwill, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those and business relationships with suppliers, distributors, customers, and others having business relationships with it it, and not engage in any action, directly or indirectly, with the Company Subsidiariesintent to impact adversely the transactions contemplated by this Agreement;
(ef) neither Company nor any It shall confer on a regular basis with one or more representatives of the Company Subsidiaries shall make any change in other to report on material operational matters and the compensation payable or to become payable to any general status of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000ongoing operations; and
(fg) neither Company nor any of It shall file with the Company Subsidiaries shall SEC all forms, statements, reports and documents (iincluding all exhibits, amendments and supplements thereto) knowingly take or allow required to be taken any action which would jeopardize filed by it pursuant to the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the CodeExchange Act.
Appears in 1 contract
Sources: Merger Agreement (Euroseas Ltd.)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From the date of this Agreement The Company covenants and agrees that, prior to the Effective Time, unless Parent WiFiMed shall otherwise agree in writing, writing or as otherwise expressly contemplated or permitted by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of the Company shall be conducted in the ordinary course, on an arm's length basis and in accordance in all material respects with all applicable laws, rules and regulations and past custom and practice; the Company shall maintain its facilities in good operating condition, ordinary wear and tear excepted; and the Company Subsidiaries shall be conducted only in use commercially reasonable efforts to preserve intact its business organization and goodwill, keep available the ordinary services of its officers and usual course of employees as a group and maintain satisfactory relationships with suppliers, distributors, customers and others having business and consistent relationships with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiaryit;
(b) except as provided under the Loan Agreement by and between WiFiMed and the Company dated May 26, 2007, the Company shall not not, directly or indirectly, do or permit to occur any of the following: (i) sell issue, sell, pledge, dispose of or pledge encumber (A) any additional Equity Interests of, or agree any options, warrants, conversion privileges or rights of any kind to sell acquire any Equity Interests, or pledge any stock owned by it in (B) any of its assets, except in the Company Subsidiariesordinary course of business; (ii) amend or propose to amend its Certificate Articles of Incorporation or By-LawsBylaws; or (iii) split, combine or reclassify any shares of its outstanding capital stock Equity Interests, or declare, set aside or pay any dividend or of other distribution payable in cash, stock or property, or redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practiceswith; (iv) assumeredeem, guarantee, endorse purchase or otherwise become liable acquire or responsible (whether directly, contingently or otherwise) for offer to acquire any securities of the obligations of any other person other than a Company Subsidiary in the ordinary course of business and consistent with past practicesCompany; (v) make acquire (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any loanscorporation, advances partnership, joint venture or capital contributions to, other business organization or investments in, any other person, other than to Company Subsidiaries and other than in the ordinary course of business and consistent with past practicesdivision or material assets thereof; (vi) authorize incur any indebtedness for borrowed money or issue any debt securities except the borrowing of working capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business; or (viii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Company shall use reasonable efforts to preserve intact the business organization of Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiaries;
(e) neither Company nor any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice; (vii) make any investments other than short-term United States Treasury obligations or short-term certificates of deposit of a commercial bank or trust company; or (viii) enter into or propose to enter into, (ii) as may be required under applicable Law or the terms of modify or propose to modify, any existing Plan or agreement, and (iii) the granting of retention bonuses arrangement or understanding with respect to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the matters set forth in this Section 5.1(b);
(c) the Company Subsidiaries shall not, directly or indirectly, enter into or modify any contract, agreement or understanding, written or oral, that involves consideration or performance of the Company of a value exceeding $25,000 or a term exceeding one year;
(d) except as required by law, rule or regulation, or except for employees (other than officers or directors) base salary adjustment, which adjustment shall not exceed 8% per annum individually or $25,000 in the aggregate, the Company shall not (i) knowingly take enter into or allow to be taken modify any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposesemployment, severance or similar agreements or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, any officers or directors or consultants; or (ii) knowingly take any action with respect to the grant of any bonuses, salary increases, severance or termination pay or with respect to any increase of benefits payable in effect on the date hereof, except pursuant to existing agreements; the Company shall not adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, trust, fund or group arrangement for the benefit or welfare of any employees or any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or arrangements for the benefit or welfare of any director; and
(e) the Company (i) shall not take any action which would render, or which reasonably may be expected to render, any representation or warranty made by it in this Agreement untrue at, or at any time prior to, the Effective Time; and (ii) shall notify WiFiMed of any emergency or other change in the normal course of its business or in the operation of its properties and of any governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated) if such emergency, change, complaint, investigation or hearing would jeopardize qualification reasonably be expected to be material, alone or in the aggregate, to the business, operations or financial condition of the Company or to the Company's, WiFiMed's or the Merger as a reorganization within Sub's ability to consummate the meaning of section 368(a) of the Codetransactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER4.1. Conduct of Business of the Company. From the date of this Agreement to the Effective TimeDate, unless Parent Purchaser shall otherwise agree in writing, writing or as otherwise contemplated expressly permitted by other provisions of this Agreement, or any Exhibit hereto, or the Company Disclosure Letterincluding this Section 4.1:
(a) The business of the respective businesses of Company will be conducted only in, and the Company Subsidiaries shall be conducted only in not take any action except in, the ordinary course, on an arms-length basis and usual course of business in accordance, in all material respects, with all applicable laws, rules and consistent with regulation and past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) The Company shall not will not, directly or indirectly, (i) sell amend or pledge propose to amend its Charter or agree to sell or pledge any stock owned by it in any of the Company SubsidiariesBylaws; (ii) amend issue or sell any of its Certificate of Incorporation equity securities, Voting Debt, securities convertible into or By-Lawsexchangeable for its equity securities, warrants, options or other rights to acquire its equity securities, or any bonds or other securities; or (iii) redeem, purchase, acquire or offer to acquire, directly or indirectly, any shares of capital stock of the Company or other securities of the Company; (iv) split, combine or reclassify any outstanding shares of its outstanding capital stock of the Company, or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or redeem property or otherwise acquire any with respect to shares of its capital stock or shares of the capital stock of any of the Company Subsidiaries;
(c) neither Company nor any of the Company Subsidiaries shall (i) authorize for issuance, issue or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise)Company, except for (a) unissued Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares to be issued pursuant to the Warrant Agreement Extraordinary Distribution permitted by Section 1.4 and (c) the Employee Shares; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets its regular semi-annual dividend in excess of $5,000,000 June 2000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume or prepay any indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Company Subsidiary in the ordinary course of business and an amount consistent with past practices; (v) make borrow any loans, advances amount or capital contributions to, incur or investments in, become subject to any other personmaterial liability, except liabilities (other than to Company Subsidiaries and other than borrowings) incurred in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess sell, assign, transfer, mortgage, pledge or subject to or permit to be subject to any lien or other encumbrance any of the amount currently budgeted thereforits assets, except liens and encumbrances for current property taxes not yet due and payable; (vii) permit cancel any insurance policy naming Company material debt or claims or waive any Company Subsidiary rights of material value, except as a beneficiary set forth in Schedule 4.1(b); (viii) acquire (by merger, exchange, consolidation, acquisition of stock or a loss payee to be cancelled assets or terminated otherwise) any corporation, partnership, joint venture or other business organization or division or material assets; (ix) other than as set forth on Schedule 3.10, make any capital expenditures or commitments therefor in an aggregate amount for all such capital expenditures in excess of $10,000 or enter into any lease; (x) modify its policy relating to the ordinary course payment of businessaccounts payable or the collection of accounts receivable, it being agreed that the Company will pay its accounts payable as they become due; or (viiixi) enter into or propose to enter into, or modify or propose to modify, any contract, material agreement, commitment or any agreement, arrangement or understanding with respect to any of the foregoingmatters set forth in this Section 4.1(b);
(c) Except as set forth in Schedule 4.1(c), the Company will not, directly or indirectly, enter into or modify any employment, severance or similar agreements or arrangements with, or grant any bonuses, wage, salary or compensation increases, or severance or termination pay to, or promote, any director, officer, employee, group of employees or consultant or hire any employee, except as contemplated by the Company's existing collective bargaining agreement, and except that the wages and salaries of non-union employees may be adjusted on a basis consistent with prior practices;
(d) The Company shall will not adopt or amend any bonus, profit sharing, stock option, pension, retirement, deferred compensation or other employee benefit plan, trust, fund, contract or arrangement for the benefit or welfare of any employees;
(e) The Company will use reasonable efforts to cause its current insurance policies not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies providing coverage substantially equal to the coverage under the cancelled, terminated or lapsed policies are in full force and effect;
(f) The Company will not enter into any settlement or similar agreement with respect to, or take any other significant action with respect to the conduct of, any action, suit, proceeding, order or investigation without prior consultation with Purchaser;
(g) The Company will use all reasonable efforts to preserve intact the in all material respects its business organization as a whole and the goodwill of the Company and the Company Subsidiaries, to keep available the services of its and their present officers and key employeesemployees as a group and preserve intact material agreements, and to preserve the goodwill of those having business relationships with it and the Company Subsidiarieswill confer on a regular and frequent basis with representatives of Purchaser, as reasonably requested by Purchaser, to report on operational matters and the general status of ongoing operations;
(eh) neither With respect to properties leased by the Company, the Company nor will not renew, exercise an option to extend, cancel or surrender any lease of real property or allow any such lease to lapse, without prior consultation with Purchaser; and 37
(i) The Company will not agree or commit to do any of the Company Subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; or (ii) knowingly take any action that would jeopardize qualification of the Merger as a reorganization within the meaning of section 368(a) of the Codeforegoing.
Appears in 1 contract
Sources: Merger Agreement (Swiss Chalet Inc)
Conduct of Business Pending the Merger. Section 6.1 CONDUCT OF BUSINESS BY COMPANY PENDING THE MERGER. From LSC agrees on its own behalf and on behalf of its subsidiaries that, except as may be agreed to by the Parties hereto or may be permitted by this Agreement, during the period from the date of this Agreement to and continuing until the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise contemplated by this Agreement, or any Exhibit hereto, or the Company Disclosure Letter:
(a) the respective businesses of Company LSC and the Company Subsidiaries its subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and there shall be no material changes in the conduct of the operations of Company or any Company Subsidiary;
(b) Company LSC and its subsidiaries shall not (i) sell or pledge or agree to sell or pledge any stock owned by it in any of the Company Subsidiariesits subsidiaries; (ii) amend its Certificate Articles of Incorporation or By-LawsBylaws; or (iii) split, combine combine, or reclassify any shares of its outstanding capital stock or declare, set aside aside, or pay any dividend or other distribution payable in cash, stock or propertystock, or redeem property in respect of its capital stock, or directly or indirectly redeem, purchase, or otherwise acquire any shares of its capital stock or other securities or shares of the capital stock or other securities of any of the Company Subsidiariesits subsidiaries;
(c) neither Company nor any of the Company Subsidiaries LSC and its subsidiaries shall not (i) authorize for issuance, issue issue, sell, pledge, dispose of, encumber, deliver, or sell agree or commit to issue, sell, pledge, or deliver any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class or exchangeable into shares of stock of any class or any Voting Debt (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase purchase, or otherwise), except for (a) unissued that LSC may issue Shares reserved for issuance upon the exercise of Employee Stock Options, (b) Shares required to be issued pursuant upon exercise of existing stock options, warrants, or similar plans, or under other contractual commitments previously made, which options, warrants, plans, or commitments have been disclosed in writing to HBOA in the Warrant Agreement and (c) the Employee SharesLSC Schedule; (ii) acquire, dispose of, transfer, lease, license, mortgage, pledge pledge, or encumber any fixed or other substantial assets in excess of $5,000,000 in any one or a series of related transactions other than in the ordinary course of business and consistent with past practices; (iii) incur, assume assume, or prepay any indebtedness material indebtedness, liability, or obligation or any other material liabilities or issue any debt securities other than in the ordinary course of business and consistent with past practices; (iv) assume, guarantee, endorse endorse, or otherwise become liable or responsible (whether directly, contingently contingently, or otherwise) for the obligations of any other person (other than a Company Subsidiary subsidiary) in a material amount other than in the ordinary course of business and consistent with past practices; (v) make any material loans, advances advances, or capital contributions to, or investments in, any other person, other than to Company Subsidiaries and subsidiaries, other than in the ordinary course of business and consistent with past practices; (vi) authorize capital expenditures substantially in excess of the amount currently budgeted therefor; (vii) permit any fail to maintain adequate insurance policy naming Company or any Company Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of businessconsistent with past practices for their businesses and properties; or (viiivii) enter into any contract, agreement, commitment commitment, or arrangement with respect to any of the foregoing;
; (d) Company LSC shall use its reasonable efforts efforts, consistent with prudent business practice, to preserve intact the business organization of Company LSC and the Company Subsidiariesits subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and the Company Subsidiariestheir respective subsidiaries and LSC shall use its reasonable efforts to reduce expenses where applicable;
(e) neither Company nor any of the Company Subsidiaries LSC and its subsidiaries shall make any change in the compensation payable or to become payable to any of its officers, directors or employees, enter into or amend any employment, severance, termination or other similar agreement, adopt any new Plan or amend in any material respect any existing Plan, or make any loans to any of its officers, directors or employees or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on consummation of the Merger or otherwise, other than (i) in the ordinary course of business and consistent with past practice, (ii) as may be required under applicable Law or the terms of any existing Plan or agreement, and (iii) the granting of retention bonuses to certain officers and employees in an aggregate amount not to exceed $2,000,000; and
(f) neither Company nor any of the Company Subsidiaries shall (i) knowingly take or allow to be taken or fail to take any action which would jeopardize the treatment of Parent's acquisition of Company as a pooling of interests for accounting purposes; act or (ii) knowingly take any action that omission would jeopardize qualification of the Merger as a reorganization "reorganization" within the meaning of section Section 368(a) of the Code; and
(f) LSC and its subsidiaries shall use reasonable efforts to prevent any representation or warranty of LSC herein from becoming untrue or incorrect in any material respect.
Appears in 1 contract
Sources: Merger Agreement (Hboa Holdings Inc)